|
August 1997, Volume 3, No. 8 21st Century Manufacturing: What You'll Need to Know to Survive |
By Michele SchermerhornMany business leaders today bemoan the results, or lack of results, achieved from their business initiatives of the 1990s as reported by Harvard Business Review, Business Week and The Wall Street Journal. The silver bullets have tarnished around their casings. Rather than blame the initiatives or the people implementing them, American management should abandon its fascination with simplistic solutions to ever-increasingly complex business and world issues. Today, the need for dramatically different solutions is critical. As Albert Einstein said, problems will never be resolved from the same consciousness which created them. Business leaders are still clinging to a now-ancient view of business originally formulated early in this century by Frederick Taylor. Very simply described, Taylor's work focused upon breaking work operations down into their smallest components, organizing these activities for mass production and uneducated workers, and setting performance standards against time increments. This process may have been effective when the world moved slower, the workers were less educated, the demand for goods was high and the consumer was undemanding, but it doesn't work now. The world has changed, dramatically. Today, consumers demand quality, reliability, cost, service and a multitude of other requirements in their products and services. America has lost its competitive edge to Pacific Rim countries. Unlike their American counterpart, the Pacific Rim countries don't approach quality, reengineering or any other strategic initiative as a program but rather as a way of business life. One of the largest Japanese electronics companies evaluates its managers 50% on how well they've maintained the business and 50% on how well they have improved the business. The successful companies in the 21st Century will provide mass customization at the quality level and cost demanded by ever-changing customer needs. They will reinvent themselves and their processes on the fly. Leaders will forever relinquish their need to control a business and begin to shepherd the interactions which must occur between the people of their organization to meet the increased demands from their customers. The manufacturing company of the 21st Century will need
to possess three critical skills: product and service
customization, company memory, and dynamic customer
interfaces. Let's look at each component in more depth. At this Toyota plant, a minivan and sedan will be produced on the same line, at the same time; approximately every third vehicle will be a minivan. How can they do this? The new Sienna minivan was designed to be built on a modified Camry platform, and because of the height difference, the engineers designed special risers on the assembly line. This mass customization approach requires that customers interface regularly with the organization. At Toyota, this is accomplished through the extensive use of surveys, dealer interactions and customer focus groups. In the 21st Century, it will be critical that the customer and the manufacturing organization become partners in the delivery of the product or service, both responsible for its successful delivery. This will result in customer satisfaction and retention &endash; retention being the key issue. Frederick Reichheld, author of The Loyalty Effect, recently surveyed 100 companies in two dozen industries and found that retaining 5% more customers would increase a company's profits by 30%. However, customized products and services alone won't
succeed. Eventually, customization will become the price of
admission to the marketplace. More is needed... company
memory. Amazon (http://www.amazon.com), a virtual bookstore on the Internet, is one such company. If a customer is looking for a particular book, they can use a search engine which allows access to 5 million book titles, by author, by title, or by subject. Each time the customer finds a selection they wish to purchase, they add it to their shopping basket, a holding area for the order. Once the customer is ready to place the order, company memory takes over. Amazon maintains the customer's billing information and only asks for a confirmation. They also maintain a list of addresses where the customer has sent books in the past and asks for a verification of the shipping address for this order. At the time of order verification, they give the book availability information and allow the customer to choose to hold the order until all books are available or not. In addition, they will notify the customer when books by their favorite authors or subject areas are released. This is company memory at its best. The customer feels valued and is not hassled in spending money with the organization. Of course, the Internet is not the only method for accomplishing customer memory. Within the 21st Century manufacturing firm, all customer
information must be available to every customer-interfacing
employee at the time of interaction with the customer. Even
if this is simply a card system with customer specifications
and preferences, it will be critical. Every customer wants
to feel valued. Remembering their name, their preferences
and personal information, like their birthdays, helps
accomplish this and retain them as life-long customers. In
addition to this, building a dynamic customer interface is
the third critical element. Many companies today have this very system. Dell Computer
(http://www.dell.com),
Amazon
(http://www.amazon.com)
and MidWest Micro
(http://www.mwmicro.com)
lead the way in this dynamic customer interface system. At
any moment, of any day, any customer can verify their order
status, peruse the company's catalog of products, play with
custom configurations of the company's products for their
own specific needs, and order that configuration. With
companies like this established in the marketplace, how long
will it be before your customers are no longer satisfied
with a 24-48 hour turn-around on their questions by your
business? Starting today, even lacking computer technology, find ways to bring your customers together with your design people, build company memory available to all employees about every customer, and build dynamic access routes to your business for your customers convenience. This will keep you in the 21st Century manufacturing game.
|
|
Intelligent Manufacturing Resources: Contents of Current Issue | Intelligent Manufacturing Home Page Subscriber Access Index of Past Issues | Free Access Index of Past Issues Search | Subscriptions | Reprints | Links E-mail to the Editorial Department of Intelligent Manufacturing: Lionheart Site Resources: Lionheart's Home Page | What's New | Site Index | Newsroom | Contact Software Surveys | Online Sponsors | Visitor Survey Other Publications: APICS The Performance Advantage BDO Seidman, LLP Comprehensive Guide to Manufacturing Software Operations Research/Management Science Today | Intelligent Systems Report Subject Areas: Manufacturing & Resource Planning Operations Research and Management Science | Intelligent Systems | Lionheart's Publishing Services Copyright © 2020 by Lionheart Publishing, Inc. All rights reserved. Lionheart Publishing, Inc. 2555 Cumberland Parkway, Suite 299, Atlanta, GA 30339 USA Phone: +44 23 8110 3411 | e-mail: | URL: http://lionhrtpub.com |