C-Suite Leadership News - November 18, 2015

Manufacturing C-Suite Leadership News

Volume I, Issue 6

November 18, 2015

Intellectuals solve problems, geniuses prevent them.

Albert Einstein

Building a Global Manufacturing Business

California CEO magazine recently suggested that as more and more American business owners consider expanding into the growing global marketplace, there are many things to consider. With demand for U.S. manufactured goods increasing steadily around the world, particularly in China and Europe, there has also been an increase in the number of American businesses looking to take advantage of the opportunity to satisfy that demand.

Companies must develop a new global mentality. This mentality that allows everyone from the CEO to product designers to marketing managers and logistics planners to put strategies in place to manufacture and sell products to a variety of consumers in different international markets.

Some manufacturers may find it easy to begin international distribution to Canada and Mexico because of the long established trade ties each has with the United States. Nevertheless, business owners should consider the competition in those markets as well as how their products may best be used depending on whether the market is commercial customers or general consumers.

Those companies that are ISO certified often enjoy a competitive advantage over those companies that are not certified. ISO certification means that companies have successfully met internationally recognized benchmarks for quality standards, which often clears the path for CE and other certifications which may be required for selling products in certain countries. Package design must take into consideration specific design preferences, international weight units, and labeling requirements that foreign markets may mandate before a product can be made available for purchase.

Driving Lean Manufacturing from Auto Parts to Medical Devices

Micah Maidenberg reported for Plastics News that after years of making auto parts, John Sapiente experienced the lessons of Japanese-style lean production as automatic, like a prayer a monk has been repeating since his novitiate days: Drive out costs. Produce high quality. Keep getting better. Otherwise, the customer moves on. The U.S. auto industry adopted such principles after Toyota Motor Corp. and other Japanese companies invaded the market more than 30 years ago with vehicles that were better and cheaper than domestic manufacturers.

Sapiente noted a similar dynamic is playing out in the $40 billion medical manufacturing sector. Only this time it is the Affordable Care Act that's transforming the industry. "The whole process has got to drive waste out of the system because of the health care law," says Sapiente, who owns Elgin Die Mold Co. - an injection molder that supplies such customers as Fiat Chrysler and Ford - and Trident Manufacturing Inc., a medical-device maker. "It's a big cultural shift."

He is trying to get ahead of the curve by putting Japanese principles into practice at Trident, a company he acquired five years ago and moved from Rockford, IL., to a facility it shares with Elgin in Pingree Grove, a small town about 50 miles west of Chicago. He once walked through Trident's space and realized 10 employees were using scissors to cut 18-inch surgery sutures in half as part of an order for a client. Simply buying the sutures at 9 inches would have cost a fortune, so he spent $5,000 on a wire-cutting machine that could make the cuts faster and more precisely but with less labor input.

Lean Manufacturing CEOs

Plant Magazine recently shared that lean manufacturing succeeds best with the CEO and senior management onside. Toronto business writer Jacob Stoller demonstrates how pivotal the chief executive's involvement can be in the new book, "The Lean CEO, Leading the Way to World-Class Excellence" (McGraw Hill).

Stoller interviewed 28, mostly US corporate leaders, to discuss their companies' lean journeys. What is most striking about their stories is how they shifted away from traditional hierarchical and/or autocratic management, standard cost accounting, and production in large batches.

Lean is all about eliminating waste; to do so everyone must pull together to continuously improve processes. It only happens when people on the plant floor and those working in the front office are believers. These CEOs recognize the people closest to the work are not mere units of production; they know what is going on; they know where the problems are and will most likely be the ones who provide solutions. They also recognize the importance of eliminating silos, changing the corporate culture, and aligning what is going on in the plant aligned to the company's strategic direction.

Stoller provides many examples of impressive outcomes. The details of their journeys, challenges, successes, and failures will be useful to anyone embarking in a lean transformation. But the key take away is the importance of lean's philosophical underpinnings. The CEOs demonstrate a workforce that believes is the foundation of a sustainable lean culture, but that belief must also come from the top.

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C-Suite Leadership News - November 18, 2015

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