Let's Fix It! : Overcoming the Crisis in Manufacturing

by Richard J. Schonberger

• ISBN13: 9780743215510
• ISBN10: 0743215516
• Format: Hardcover
• Copyright: 2001-12-04
• Publisher: Free Press

Summary

No company is built to last, argues world-renowned manufacturing guru Richard J. Schonberger. After sixteen years of prosperity, he shows, nearly 75 percent of the world's most admired manufacturing companies have slipped badly from their peaks in 1995. In this devastating indictment of current manufacturing practices, Schonberger submits a four-part revolutionary plan to solve the manufacturing crisis for good. From his statistically reliable database of 500 top global manufacturers, Schonberger finds that by the critical worldwide standard of lean production -- shedding inventories -- General Motors, General Electric, Toyota, and other world leaders have stopped improving. He presents powerful evidence that in recent years record profits have covered up waste and weakness. Clearly a lack of will to renew and recover from the natural tendency toward regression and erosion, it is more than a matter of garden-variety complacency -- devastating as that is in this new era of global hypercompetition. Schonberger asserts that the inclination of industry leaders to engage in stock hyping to gain a quick fix from the dot-com explosion has distracted attention from "the basics" of world-class excellence. Among other villains contributing to the crisis, Schonberger contends, are newly hired managers with no trial-by-fire experience; bad equipment, systems, and job design; and retention of unprofitable customers and anachronistic command-and-control managerial hierarchies. What to do? Just as he introduced the legendary "just-in-time" framework to the West in the 1980s, Schonberger prescribes strong medicine to cure our current malaise. Find your blind spots, he says. Roll confusing, time-sapping initiatives into a master program that is immune from "the flavor of the month." Put lean into heavy-handed control systems. Develop products and standardize processes at "home base" for ease of migrating volume production anywhere in the world. Timely and essential, Let's Fix It! will be warmly welcomed by the legions of Schonberger readers and every manufacturing manager who believes passionately in continuous improvement.

Author Biography

Richard J. Schonberger is a world-renowned authority on production and manufacturing and author of the bestsellers Japanese Manufacturing Techniques and World Class Manufacturing. His most recent book, World Class Manufacturing: The Next Decade, won the 1998 Shingo Prize for research in manufacturing. He is president of the advisory services firm Schonberger & Associates, Inc., in Bellevue, Washington.

Table of Contents

Preface	vii
Complacency	1	(13)
Renewal	14	(13)
Competitiveness	27	(20)
Programs and Their Half-lives	47	(16)
Success	63	(21)
Performance Management: The Human Side	84	(14)
Performance Management: Control Without Controls	98	(16)
Focused Form and Structure	114	(15)
Focus Within	129	(19)
Strategy of Global Proportions	148	(21)
Continuous Improvement Up-to-Date	169	(16)
Manufacturing's Burdens--and Responses	185	(18)
Systems: Some Come with an ``E''	203	(14)
Appendix 1: The Strong and the Weak	217	(4)
Appendix 2: WCP International Benchmarking Study Participants and Global Benchmarking Partners	221	(14)
Appendix 3: Two Elements of the World Class by Principles (WCP) International Benchmarking Project	235	(34)
Notes	269	(16)
Index	285

Excerpts

Chapter One: Complacency The law of entropy has it that all things tend to run down. Only by importing negentropy -- applied information can we stave off this fate. Beavers possess the know-how (information) to keep water from swiftly taking its entropic course -- downhill. Man continually innovates and uses the resulting information to make water climb uphill, keeping crops irrigated and toilets flushing on the uppermost floors of skyscrapers.Nations and companies run down, too. Their declines follow from not innovating, not applying new information to combat entropy. In social systems such failings often take the form of complacency.Through much of the twentieth century the United States was the world's manufacturing colossus. By the 1970s decline was apparent and the coverstory topic of any number of business publications. Telling research shows that the downslide actually began in the 1950s. Later, by applying new ideas (some borrowed, others homegrown), U.S. industry renewed itself and regained its global industrial supremacy. The United Kingdom, then continental Europe, followed suit.The same patterns of ascendancy and decline -- and the need for renewal -- take place in every country and region. We've seen it in Japan, with its own extended period of economic malaise. Japan had sloughed off the devastation of World War II to emerge dominant in world markets for automobiles, machine tools, and a cornucopia of consumer electronics. The principal driving force was innovations in industrial management that originated mainly in the Toyota family of companies. The Toyota system -- just-in-time and related concepts of rooting out wastes and delays-was fully developed by 1970. Those innovations pumped the Japanese economy for another two decades as other companies installed their own versions of Toyota concepts. By the nineties, however, the competitive engine had run out of gas (life-giving new knowledge).Manufacturers in other countries got a late start. Simplistic explanations of Japan's success (community of the rice fields, quality control circles) had diverted attention. Finally, in the early 1980s, Toyota's get-lean success formula was out in the open. What happened next is remarkable: Western industry (mainly in the United States, at first) avidly learned and applied-and then began to innovate itself. By the late 1980s the United States had taken the baton. It became the globe's fount of new ideas on how to manage a manufacturing enterprise.Chapter 2 summarizes the most important Japanese innovations, pre-1980s, and the equally notable contributions of the West, late 1980s and 1990s. The body of this chapter probes the complacency problem, especially for manufacturing companies. Main topics are the rising importance of good management, how to size up competitive strength, and why manufacturing leaders fade. MANAGEMENT: THE DIFFERENTIATOR When it comes to countries, competitiveness may be measured by economic numbers such as gross domestic product. More to the point, for this books purpose, is competitiveness for a business-most specifically a manufacturer. Earnings and market share are inadequate. They tell where the company was, not where it is going. All too often a company has its best year ever and two or three years later is in a death spiral.Digital Equipment Corp. (DEC) comes to mind. In 1987 the company's common stock price hit its all-time high, and cocksure executives leased the QE II ocean liner for the three thousand-odd guests invited to its spare-no-expense DECWORLD extravaganza. Exhibit 1.1 shows, one year later, DEC's spectacular rise in earnings suddenly reversing itself and its common stock price failing as far and fast as it had risen. In 1998 DEC was gone, absorbed by Compaq Computer.Some companies luck out. They stumble upon a technology that gives an instant competitive edge, covering up what may be s