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Melj0312r

  1. 1. 2/15/12 3:12 PM MANUFACTURING LEADERSHIP people that it’s your obliga- believe I know everything.” tion to disagree. I still don’t JOURNAL D I A L O G U E “We say to our Organization The Adaptive ........................ ........................ ........................ ........................ ........................ Director of Operations, McLaren Automotive —Alan Foster TW E N TY D O LLA RS EXECUTIVE Rockwell Automation’s Keith D. Nosbusch and John A. Bernaden explain The University of Wisconsin’s Rajan Suri argues that reduc- ing lead times trumps the advantages of Lean and cost-based methods. A collaborative, flexible structure is the key to rapid change, say Jeff Lawrence and Nadir Ahmad of Cambridge Leadership Associates. DEVELOPING AN ADAPTIVE CULTURE how smart manufacturing can spark industry-related employment. IT’S ABOUT TIME—TO ADAPT Quick Response Manufacturing: B E T T E R F U T U RE / M A RC H 2 0 1 2 / THE MULTIPLIER EFFECT FO R A B O LD I D E A S RB@03_Cover_v4.indd 1......................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................... MARCH 2012 M A N U FA C T U R I N G E X E C U T I V E L E A D E R S H I P J O U R N A L VO LU M E 3 , N U M B E R 2
  2. 2. 2/15/12 10:17 AM By Rajan Suri, Emeritus Professor and Founding Director, Center for Does your manufacturing company have the collaborative organi- zational structure, flexible technology, and system-wide empower- British automotive company McLaren is heading for the fast lane Members of the Manufacturing Executive Leadership Council For makers of custom and low-volume products, Lean and tradi- Adaptive Organization Quick Response Manufacturing, University of Wisconsin-Madison tional cost-based improvement methods may not be the best fit. of the world’s luxury car market. Its new purpose-built produc- discuss the organizational, cultural, and leadership qualities tion facility, with Alan Foster in charge, is based on a forward- thinking operational philosophy of simplicity and flexibility. Th i s I s s u e ’ s Th e m e By Jeff Lawrence, Principal, and Nadir Ahmad, Consultant, Cambridge Leadership Associates 20 /McLaren’s Flexible Factory ment to adapt successfully to rapid change? Edited by Jeff Moad, Executive Editor, MELJ 8 /Developing an Adaptive By Paul Tate, Executive Editor, MELJ Culture: The Time Is Now 2 8 /A Passion for Agility 1 2 /It’s About Time that enable adaptability. r o u n dta b l e d i a lo g u e o pi n i o n The @RB03_ME_TOC_v3.indd 1................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................
  3. 3. M A RC H 2012 VO LU M E 3, NUMBER 2 MANUFACTURING EXECUTIVE BOLD IDEAS FOR A BETTER FUTURE LEADERSHIP JOURNAL 8 3 4 /Resistance Is Futile 4 /e d i to r ’ s l e t te r By Mark Symonds, President and CEO, Plex Systems The Urgency of Adaptation Here’s a look at some of the changes that By David R. Brousell, Vice President & Editorial may be headed your way, and five ways that Director, MELJ manufacturers can prepare themselves for the onslaught. 6/Best of the Blogs 44 Extracts from among the best blogs on the 4 1 /c a s e s t u dy global Manufacturing Executive Website Strategies for an Adaptive Culture (www.manufacturing-executive.com) By Sanjay Singh, Head of Global Strategy, Manufacturing, HCL Technologies 57/Board of Governors India’s HCL Technologies has deployed Meet the members of the Manufacturing a five-point strategy that will enable Leadership Council’s board manufacturers to build more adaptive global organizations. 28 60/o pi n i o n Four IT Forces 44 /Creating Agility, Resistance, That Will Change the and Innovation Through Right- Way Manufacturers Work Time Business Intelligence By Pierfrancesco Manenti, Head, Europe, By Craig Hartman, Senior Executive Director, Middle East and Africa, IDC Manufacturing and Michael Killian, Senior Business Advisor, Insights Cisco Systems 48 In a world where millions of connected 62/Community Voices devices are creating vast amounts of data, Excerpts from some of the hottest discus- manufacturers need to develop strategies sions on the global Manufacturing Executive that can turn this data into meaningful infor- Website mation to help drive faster decision-making and create sustainable differentiation. 64/The Council 48 /The Multiplier Effect: There Meet some of your fellow members on the Are More Manufacturing-Relat- 34 Manufacturing Leadership Council Cover: Veer, opposite: Veer/solarseven ed Jobs Than You Think By Keith D. Nosbusch, Chairman and CEO, › Join the conversations at and John A. Bernaden, Director of Corporate www.manufacturing-executive.com. Communications, Rockwell Automation And read the latest blogs by your peers and Manufacturing Executive The embrace of smart manufacturing tech- editors. nologies will turn conventional wisdom about indirect jobs creation on its head and change the image of the industry itself. 12 MANUFACTURING EXECUTIVE LEADERSHIP JOURNAL is published six times a year by Thomas Publishing Company, LLC. 5 Penn Plaza, New York, NY 10001. J.E. Andrade, Chmn. of the Board; C.T. Holst-Knudsen, Pres.; R.J. Anderson, V.P., Planning; M. Peipert, V.P., Finance; I.J. Molofsky, V.P., Human Resources. Executive Office: 5 Penn Plaza, New York, NY 10001. Tel: 212-695-0500. 6 issues, $150; single copy, $20. ©2012 by Thomas Publishing Company. All rights reserved. MA, Managing Automation, Manufacturing Executive are registered trademarks of Thomas Publishing Company.@RB03_ME_TOC_v3.indd 2 2/16/12 9:31 AM
  4. 4. MANUFACTURING EXECUTIVE LEADERSHIP JOURNAL ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... ............. ............................. ........................................... ........................................... ........................................... Editor’s Letter / David R. Brousell The Urgency of Adaptation PRESIDENT ........................................... HEATHER L. HOLST-KNUDSEN ........................................... ........................................... ........................................... I ........................................... ........................................... ........................................... +1 212-290-8724 hholstknudsen@thomaspublishing.com VICE PRESIDENT & N THINKING ABOUT THE MEANING OF ADAPTATION, CHARLES EDITORIAL DIRECTOR Darwin, the English naturalist whose 1859 book On the Origin of Species promulgat- DAVID R. BROUSELL +1 212-629-1510 ed the theory of natural selection, naturally comes to mind. “It is not the strongest of dbrousell@thomaspublishing.com the species that survives, nor the most intelligent. It is the one that is most adaptable to ........................... ........................... change,” Darwin reportedly said. This law of nature, if you will, has been at the center of Editorial thinking in manufacturing for many years, but it has come into sharp relief recently as market EXECUTIVE EDITOR PAUL TATE forces such as globalization, an aging workforce, changing customer demographics and expec- +44 (0) 7973 510-458 ptate@thomaspublishing.com tations, and new, pervasive technologies alter the industrial landscape. When you speak to turing at many levels. In “It’s About Time,” EXECUTIVE EDITOR JEFF MOAD manufacturing executives these days, there University of Wisconsin-Madison Emeritus +1 510-531-3456 is an urgency and immediacy in their voices Professor Rajan Suri discusses what the prin- jmoad@thomaspublishing.com about change, and change from many angles. ciples of Quick Response Manufacturing can MANAGING EDITOR JAY E. BLICKSTEIN The language of change used by executives do to reduce lead times and trim costs. In our +1 212-629-1540 today underscores how critical finding new Dialogue interview, Executive Editor Paul jblickstein@thomaspublishing.com ........................... ........................... ways of doing things has become. Whether Tate talks with Alan Foster of British auto- Columnist they speak about “flexibility,” agility,” “resil- maker McLaren about the company’s new PIERFRANCESCO MANENTI iency,” or simply greater “speed,” the message “flexible” production facility for its latest lux- IDC Manufacturing Insights is the same —manufacturing has to adapt. ury sports car. Milan, Italy ........................... ........................... This issue of the Journal is devoted to ex- In addition to the package of articles in Design & Production ploring the idea of adaptation in manufac- this issue on the theme of adaptability, we DESIGN DIRECTOR are publishing what we think is a ground- BEST & CO. robert@rbestdesign.com breaking article on the manufacturing em- ployment picture, an issue whose urgency is PRODUCTION DIRECTOR REGGIE RIOS second to none. In “The Multiplier Effect: +1 212-629-1520 There Are More Manufacturing-Related rrios@thomaspublishing.com Jobs Than You Think,” Rockwell Automa- CROSS-MEDIA PRODUCTION tion Chairman and CEO Keith D. Nosbusch SPECIALIST PHILLIP GALLOF and Director of Corporate Communica- +1 212-629-1503 pgallof@thomaspublishing.com tions John A. Bernaden argue that the em- brace of smart manufacturing techniques WEB DESIGNER PAUL POLICARPIO can create millions of new indirect jobs sup- +1 212-629-1511 ppolicarpio@thomaspublishing.com porting manufacturing and, in the process, change the image of the industry itself. Continue the discussion about adaptabili- ty at www.manufacturing-executive.com. M  W W W. M A N U FA C T U R I N G - E X E C U T I V E . C O M ME Global Leadership Community@RB03_EdLetter_v6.indd 1 2/15/12 10:23 AM
  5. 5. “It is not the strongest who survive but those who are most adaptable.” CHARLES DARWIN TAKE YOUR LEADERSHIP SKILLS TO A GAME-CHANGING LEVEL Succeeding in our rapidly shifting manufacturing landscape requires the ability to adapt your strategy, your organization, and your people with speed and agility. The Manufacturing Leadership Council’s Adaptive Leadership Program offers you the knowledge necessary to make it happen. Open exclusively to Platinum-level Members of the Council, the program is offered in cooperation with Cambridge Leadership Associates (CLA) – an international leadership development practice founded in 2003 by Harvard University faculty Ron Heifetz and Marty Linsky. CLA is known worldwide for helping executives and top teams perform at their peak, to drive results in constantly changing environments. Sign up for the Council’s Adaptive Leadership Program and discover why companies such as Microsoft, Cisco Systems, Eli Lilly, IBM, Johnson & Johnson, Merck, Pfizer, and Shell Oil have made Adaptive Leadership part of their competitive advantage. To learn more, please contact a Council representative at (212) 629-2164 or 888-280-6794, or access our “On Demand” Adaptive Leadership Webinar at manufacturingleadershipcouncil.com/programs Helping to Define and Shape a Better Future for Manufacturers Worldwide Manufacturing Leadership Council, 5 Penn Plaza, 8th Floor, New York, NY 10001• 212-629-2164 or 888-280-6794CLA_March2012.indd 1 2/13/12 5:13 PM
  6. 6. MANUFACTURINGEXECUTIVE LEADERSHIP JOURNAL .................................. ................................. .................................. .................................. .................................. .......................................... .................................. .......................................... .......................................... .......................................... Best of the Blogs .......................................... .......................................... .......................................... .......................................... ..................... ..................... ........................................... ........................................... .......................................... The following extracts are taken from among the best blogs on the global Manufac- turing Executive Leadership Community Website. You can join in, read more, and respond with your own point of view at www.manufacturing-executive.com. N E X T G E N E RAT I O N L E A D E R S H I P A N D C U LT U R E that understands why and how to edges of their applications. They Manufacturing embrace change—never flinching are busy adding things like mo- Leadership: Will from the challenges ahead and al- bility, social networking, “big Adaptability Rule ways thinking differently. Manu- data”-capable analytics, and The Future? facturing Executive feels that role-based user interfaces to their Extract: Are today’s adaptive leadership approaches enterprise application suites. The manufacturing leaders are so critical to the future of man- implication from the vendors is as adaptable as their ufacturing that we have launched a that there’s not much need to in- factories and supply special course for Manufacturing novate on the core business func- chains? Not yet, per- Leadership Council Members. tionality of these applications, Paul Tate haps. But they need to Find out more by listening to our that customer requirements at be. Adaptive leadership goes far free introductory Webinar, “Lead- the core are static, and that those beyond operational issues. It en- ing Adaptive Change in Manufac- requirements have largely been compasses broader but increasing- turing,” via the Manufacturing met. But the stories I hear from ly essential leadership qualities for Executive Website, www.manu- manufacturers paint a different building an open and flexible vi- facturing-executive.com. picture. Manufacturers are still sion of the future; the personal Paul Tate is Executive Editor of Manu- keenly interested in the core func- facturing Executive. skills to inspire people to think dif- Read the full blog: http://www.manufac- tionality of their enterprise soft- ferently about problems and obsta- turing-executive.com/community/leader- ware. They want applications that, ship_dialogues/next_generation_lead- cles; and the professional ambition ership_and_culture/blog//// out of the box, support the busi- to drive extensive cultural change manufacturing-leadership-will-adaptability- ness processes that are essential rule-the-future across borders, functions, and gen- and unique to their business and erations. There is no “business as THE ADAPTIVE ORGANIZATION their vertical industry. And they usual” anymore. That’s the last ref- Innovation at the Core want applications with core func- uge of the unenlightened and the Extract: For several tionality that keeps up with what, uninformed. The manufacturing years now, I’ve no- in many vertical industries, is a very world and the manufacturing ticed a disconnect of dynamic set of requirements. world’s customers have moved on. sorts between manu- Think about it. As pharmaceutical Exceptional leadership in the de- facturers and the manufacturers embrace concepts Jeff Moad cades ahead will be characterized companies that pro- like continuous manufacturing, by manufacturing leaders who vide the ERP and other software and as automotive OEMs attempt have learned to adapt and thrive in suites on which most businesses to move toward mass customiza- challenging times. People with a run. Increasingly, the software tion, the way they do everything clarity of vision who can create a vendors like to talk about the in- from sourcing materials to plan- mindset across their organizations novations they are bringing to the ning production is changing dra-  W W W. M A N U FA C T U R I N G - E X E C U T I V E . C O M ME Global Leadership Community@RB03_Blogs_v2.indd 6 2/13/12 4:11 PM
  7. 7. Best Blogs / HotTopics matically. They need their enter- with dirt floors. In China, where small changes or disruptions at prise software to support those whole communities are being the far end of the supply chain changes. torn down, reconfigured, and re- (end-user, retailer) to multiply as Jeff Moad is Executive Editor of Manu- built, I have come across facilities they move up through the chain facturing Executive. that look like they are in a war to become major fluctuations Read the full blog: http://www.manufac- turing-executive.com/community/leader- zone, with neighboring walls torn for suppliers. “We have found ship_dialogues/the_adaptive_organization/ blog/2012/01/12/innovation-at-the-core down or streets that end and start that the more information we randomly. When you have a focus can share with our partners, the G lo b a l Va l u e C h a i n O p t i m i z at i o n on best price with highest quality more costs we are able to drive The Global View: Don’t and timely delivery, you then out of the system, so we both Judge Me by My Dirt have to decide what your priority gain,” says Scott Craig, director Floors is regarding the appearance of of replenishment for Hannaford Extract: In the 1980s, plants used by suppliers and con- Brothers regional supermarkets. on one of my first trips tractors. Although I know that There are many ways to employ to Asia as an engineer, quality and appearance are often this strategy to improve supply I was in Japan visiting aligned, and while I appreciate chain performance. Sharing Everette some of the plants the teachings and lessons of Lean your production schedule with Phillips that make Seiko manufacturing, I want to empha- trusted suppliers, for example, watch components. Part of my size that floor type does not al- allows them to better coordinate job was to help transfer precision ways correlate to quality of out- their own production to meet watch manufacturing equipment put—especially in Asia. your needs. Collaborating with and adapt it to new markets ori- Everette Phillips is CEO and president of distributors and customers to ented toward custom equipment Global Manufacturing Network. develop better forecasts is an- Read the full blog: http://www.manufacturing- for making calculators, electron- executive.com/community/leadership_dia- other example. This all sounds ic auto parts, and medical equip- logues/global_value_chain_optimization/ good in theory, but many com- blog/2012/01/18/the-global-view-dont-judge- ment. When we later went to visit me-by-my-dirt-floors panies have been reluctant to the machine shop in Tokyo, I was take steps in this direction be- expecting a surgically clean facili- G lo b a l Va l u e C h a i n O p t i m i z at i o n cause they don’t have the kind of ty not unlike some of the Seiko Data Sharing: working relationship with sup- Instruments facilities where I had It’s All About Trust pliers that allows them to feel been working. As we entered the Extract: It’s a basic te- comfortable sharing this de- building, I saw that the floors net of faith in supply tailed information about their were dirt. There were many CNC chain circles that data business. Until a sufficient level machines operating, each sitting can substitute for in- of trust and partnership is estab- on its own concrete pedestal. I ventory, and that the lished between a company and Mark had seen concrete floors, and Symonds best way to improve its suppliers, the benefits of data wooden floors in GM’s massive supply chain velocity, efficiency, sharing will remain out of reach. transmission plant in Michigan and performance is by sharing Mark Symonds is President and CEO as well as in New England manu- data throughout the supply of Plex Systems and a member of the Manufacturing Leadership Council. facturing centers built in convert- chain. As an example, providing Read the full blog: http://www.manufacturing- ed multistory mills. But this was suppliers with access to point- executive.com/community/leadership_dia- logues/global_value_chain_optimization/ the first facility where I had seen of-sale data is seen as the defini- blog/2011/12/16/data-sharing-it-s-all-about- dirt floors. Today, as I travel in tive cure for the so-called “bull- trust Asia, I still come across facilities whip effect”—the tendency for  www. manu factu r ing - e x ecuti v e . c o m ME Global Leadership Community@RB03_Blogs_v2.indd 7 2/14/12 9:29 AM
  8. 8. MANUFACTURING EXECUTIVE LEADERSHIP JOURNAL .......................................... .......................................... .......................................... .......................................... .......................................... .......................................... .......................................... .......................................... ..................... ..................... ........................................... ........................................... .......................................... Opinion / Jeff Lawrence / Nadir Ahmad Developing an Adaptive Culture: The Time Is Now Does your manufacturing company have the collaborative organizational structure, flexible technology, and system-wide empowerment to adapt successfully to rapid change? .......................................... .......................................... .......................................... .......................................... .......................................... .......................................... .......................................... ..........................................  W W W. M A N U FA C T U R I N G - E X E C U T I V E . C O M ME Global Leadership Community@RB03_CLA_v6.indd 8 2/16/12 9:23 AM
  9. 9. T HE URGENT NEED FOR MANUFACTURERS TO BECOME more adaptive in their organizations has been thrust front-and-cen- ter onto the world stage in recent months. There’s a lot at stake. At .................... .................... the World Economic Forum in Davos, Switzerland, earlier this year, .................... .................... .................... .................... .................... the Boston Consulting Group Strategy Institute released the results of a special study that found adaptive organizations significantly o utperform industry peers in terms of economic and financial gains. In January, Fast Company magazine ran an The Challenge of Adaptation article, “This Is Generation Flux,” stressing For a manufacturing enterprise, the chal- the importance of individual adaptability to lenge of adaptation is particularly acute. Jeff Lawrence is thrive in today’s challenging job market. Manufacturing has traditionally been a principal at Even President Obama, in his latest State capital-intensive, making it more difficult Cambridge Lead- of the Union address, spoke about the im- for companies to alter course quickly than ership Associates (CLA), an interna- portance of adaptation and the trajectory organizations in, for example, the finan- tional leadership the U.S. auto industry has followed over the cial-services sector. However, the qualities development last three years. that are necessary for adaptive capacity are practice based in During the recent recession, some ob- more cultural than material. Therefore, in New York. servers advocated that certain automakers theory, any manufacturing organization should be left to whatever fate the market can prepare itself and its people with the dictated. Such a course of action would skills that are necessary. have put a million jobs at stake. Since then, Adaptation is often difficult because it re- not only has the U.S. retained those million quires organizations to constantly assess jobs, but 160,000 more jobs have been creat- what, of all the things they are doing, is con- ed. Meanwhile, Chrysler has grown faster in tributing most to their success. What values Nadir Ahmad is a the U.S. than any other major car company, and practices are so core to who they are, and consultant at Cam- and General Motors is the world’s number- are so much of their essence, that they must be bridge Leadership one automaker. How did workers and auto- brought forward for the future? Correspond- Associates. makers in a seemingly intractable stalemate ingly, what values and practices that have adapt in such a way to settle their differenc- helped them achieve past success, but are no es? And what enabled the entire U.S. auto ..................................... ..................................... ..................................... industry to evolve in this manner to create ..................................... ..................................... ..................................... ...................................... ...................................... such a drastic turnaround? All the indicators point to the need Organizations, as well as groups for companies working in the increas- of people, are more resilient and ingly dynamic manufacturing industry to responsive when they can access Illustration: Veer/Pedro learn how to quickly sense and respond to the entire breadth of collective change, and to develop a greater ability to anticipate the changes now required for fu- capacity. ture success.  W W W. M A N U FA C T U R I N G - E X E C U T I V E . C O M ME Global Leadership Community@RB03_CLA_v6.indd 9 2/15/12 10:29 AM
  10. 10. MANUFACTURING EXECUTIVE LEADERSHIP JOURNAL ing about the strengths and resources that .......................................... .......................................... .......................................... exist across the enterprise. Organizations, as .......................................... .......................................... .......................................... .......................................... .......................................... ..................... ..................... well as groups of people, are more resilient ........................................... ........................................... .......................................... and responsive when they can access the entire longer viable, must now be left behind? breadth of collective capacity. In less adaptive The U.S. auto industry is a vivid example. organizations, the awareness and connections For years, the industry ignored the warning are nonexistent or unknown. So, the question signals that the world was looking for a dif- to reflect on for your organization is whether ferent value proposition than big, gas-guz- people can or cannot make these connections. zling cars. The market has now returned af- At the individual level, to what extent are ter the recession, but has been transformed people rewarded for collaboration versus indi- by more fuel-efficient technologies and en- vidual distinction? At the organization level, vironmentally aware global consumers. to what extent do people act from the perspec- Similarly, many of the big pharmaceuticals tive, and for the betterment, of the whole orga- nization, as opposed to worrying about pro- .............................................. ............................................. ............................................. ............................................. ............................................. .............................................. tecting their individual silos? ............................................. .............................................. 2. Elephants on the Table: There’s an age- The qualities necessary for adaptive old cliché about unresolved family issues: capacity are more cultural than the family gets together, Uncle Charlie gets drunk, but nobody talks about Uncle material. In theory, any manufacturing Charlie’s drinking because it’s too difficult group can prepare itself and its and painful. That’s what’s called an “el- ephant in the room.” Imagine that those people with the necessary skills. elephants are standing on your conference or meeting-room table, and ask yourself, do companies could not wean themselves from the important, difficult conversations ever their tried-and-trusted formula for block- get from inside people’s heads or around buster success. Advances in the production the coffee machine to the meeting room it- of generic drugs began to cut deeply into self ? Are there structures, incentives, and/ their profits, and the world began to ques- or support for people to speak the “un- tion whether it was morally tolerable to have speakable”? Does your team take those products that could make people healthy but on in meetings, or is there a “meeting after not make them readily available at prices that the meeting” syndrome where the real stuff were closer to the cost of making them, rather only gets discussed and decided afterward? than the cost of inventing them. 3. Institutional Reflection and Continu- So, after helping hundreds of organi- ous Learning: As the world changes around zations like these adapt, we believe that an us, what we do, and how we do it, has to adaptive organization requires the presence change, too. Change is hard, so it is impor- of five core qualities to succeed. As you read tant to understand what needs to change this, rate your own company culture on the and why, and to ensure that we have cho- presence—or absence —of each element. sen the right changes. This is particularly 1. Shared Responsibility: Adaptive cultures important where an organization is trying are able to respond to changes in complex to make some significant changes—even if ways. Doing this requires a deep understand- they seem minor at the time—in how they  W W W. M A N U FA C T U R I N G - E X E C U T I V E . C O M ME Global Leadership Community@RB03_CLA_v6.indd 10 2/15/12 10:29 AM
  11. 11. operate, how they come together, how they take on problems, or how they deal with their key constituents. Does the organiza- tion dedicate its support, and individual and collective time, for reflecting on experi- ence and learning from others? To what ex- tent does the organization commit time and space and skill to getting a true perspective What has worked up to now won’t on its own work? necessarily take the company forward 4. Sensitivity to Authority: Organizations with a high sensitivity to authority depend in the future. The world changes, and entirely on that authority for direction, pro- in order to thrive, individuals have to tection, and order. In a way, that describes evaluate what is working and what isn’t. all organizations. Adaptive organizations .......................................................... .......................................................... .......................................................... .......................................................... .......................................................... .......................................................... also rely on individuals within the company .......................................................... .......................................................... to interrupt unproductive patterns, name elephants, and create new ways of work- there to learn and grow, or do they assume ing. But the authority figure rarely has all they should put their head down and do ex- the answers, nor always understands the actly what they did in their last assignment? competing commitments or the view from As you reflect on the rating you gave your the trenches necessary to solve the prob- organization, what are the stories that came lem. Creating an environment where both to your mind? What is your assessment saying authority and leadership co-exist in the about your organization or team? Do individ- service of progress is what makes organi- uals and teams in your organization succeed zations more adaptable. To what extent are because of the culture—or in spite of it? What people in the organization valued for their would it take to move the adaptability ratings own judgment, rather than their capac- of the organization to a higher level? ity for divining the preference of the boss? Make no mistake, the rate of change in That is, which question do people tend to the manufacturing world will only get faster. ask when they are uncertain: “What would The key to thriving in that ever-changing my boss do now?” or “What’s best for the world will be to build adaptive organizations organization now?” that can learn their way toward a more pro- 5. Customized Professional Development: ductive future. M What has worked for the organization and .......................................... .......................................... .......................................... .......................................... the individual up to now won’t necessar- .......................................... ily take the company forward in the future. Leading Adaptive Change in Manufacturing The world changes, and in order to thrive, Learn how to adapt and thrive in challenging times individuals and organizations have to › Find out more about Manufacturing Executive’s special Leading Adaptive Change in Manufacturing program, exclusively designed for Manufacturing Leadership evaluate what is working and what isn’t. If Council Members. something isn’t working, how do the peo- › Listen to the introductory Webinar with Cambridge Leadership Associates at http://www.manufacturing-executive.com/community/webinar_adaptive_leadership. ple in your organization become aware of › Book your place on the 2012 Leading Adaptive Change in Manufacturing program. it, and prepare to do something different? › Call 888-280-6794 or send e-mail to executiveteam@manufacturingleadership- When someone is given a new assignment, council.com. can they be assured they have been placed  www. ma n u fact u r i n g - e x e c u ti v e . com ME Global Leadership Community@RB03_CLA_v6.indd 11 2/16/12 9:24 AM
  12. 12. MANUFACTURINGEXECUTIVE LEADERSHIP JOURNAL .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... It’s About Time ............................ ............................ ............................ ............................ ............................ ............................ ............................ ............................ By Rajan Suri@RB03_Suri_v4.indd 1 2/16/12 9:48 AM
  13. 13. For makers of custom and low-volume products, Lean and traditional cost-based improvement methods may not be the best fit. Instead, an approach that optimizes agility and dramatically reduces lead times across the enterprise is the way to go.@RB03_Suri_v4.indd 2 2/16/12 9:48 AM
  14. 14. MANUFACTURINGEXECUTIVE LEADERSHIP JOURNAL .......................................... .......................................... .......................................... .......................................... .......................................... .......................................... .......................................... .......................................... ..................... ..................... T ........................................... ........................................... .......................................... rue or false: U.S. manufacturing jobs will continue to be lost to China and other lower-cost countries because we simply can’t compete with their labor costs. False. Typically, only 7% of the final price of your made-in-the-USA product is due to direct labor. So, what accounts for the remaining 93%? Your organization. Or more precisely, the organi- .................... .................... zation of your entire en- .................... .................... .................... .................... .................... terprise and your supply chain. For certain ume or custom manufacturing. types of companies and markets, an agile The Center for Quick Response Manu- organization that responds quickly to or- facturing, along with more than 200 part- ders, changes, and other events will not only ner companies, has developed during the satisfy customers with short lead times but past 15 years an alternative strategy for also take a huge chunk out of the remaining reducing lead times and costs, particularly 93% of costs. The result is both quick re- for manufacturers of low-volume and cus- Rajan Suri is sponse to customer demand and the ability tom products. Using the principles of what Emeritus Professor to compete with any factory, making prod- we call Quick Response Manufacturing and Founding Di- ucts anywhere in the world. (QRM), our partner companies have re- rector of the Center for Quick Response For low-volume or custom-engineered duced lead times by more than 80%. At the Manufacturing at products, neither traditional management same time, they have realized cost reduc- the University of methods nor the newer Lean approaches tions of 15%-25%, outweighing the labor- Wisconsin-Madi- provide the best cost-reduction strategy. Tra- cost advantages of low-wage countries. son. His latest book on QRM is It’s About ditional, cost-based methods optimize for Time (Productivity economies of scale. But these methods also Thinking Beyond Lean and Six Sigma Press, ). result in long lead times in the supply chain T and factory. These lead times result in added he core tools in Lean such as takt costs of planning, forecasting, expediting, time and level scheduling are de- work-in-process, and finished-goods inven- signed to eliminate variability in Previous spread, Veer/ Orly tories; lost sales; obsolescence; and more. operations. Six Sigma also targets reduction Similarly, because Lean methods were of variability. While this sounds good, the designed for high-volume, repetitive trouble with these approaches—and why we manufacturing environments, many Lean need to think beyond them—is that manage- tools break down when applied to low-vol- ment literature has not clarified the issue of ............................................... ............................................... ............................................... ............................................... ............................................... ............................................... ............................................... Traditional, cost-based methods optimize for economies of scale. But these methods also result in long lead times in the supply chain and factory.@RB03_Suri_v4.indd 3 2/9/12 1:57 PM

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