Management: Manufacturing Matters

Sometimes manufacturing people read something from supposedly very smart and experienced people, and it just makes you wonder how companies ever survived at all.

Aw 219 G Mintchell01
You may have heard of Bob Lutz. He is a famous “car guy.” Product development, and especially big, gas-guzzling cars, embody his legacy. I remember vividly his whining about a year ago when the market and regulators were promoting fuel efficiency. He still wanted to build large cars with big engines.

He has written a book, and The Wall Street Journal offered him a forum to promote it. I saw it online at http://online.wsj.com. There are powerful insights, such as when he reveals management weaknesses at GM. Then there are stories that make manufacturing people cringe.

There is a type of manager who focuses on the minutiae and lets “the vision thing” slip. I’ve seen this phenomenon in many guises. In two terms on a school board, I saw the group focus on the big picture—hiring the right people, giving broad direction and feedback. Then the group changed and focus was on details such as where floor polish was purchased and whom the junior class advisor would be. Needless to say, overall direction of the school district floundered.

Scott Adams captured the supreme caricature of the “micro manager” in his “pointy-haired boss.” Lutz captures it in unfortunate reality. “One of my favorite anecdotes about the long post-war decline of General Motors came from a senior executive in the advertising agency that served Cadillac back in the 1950s and ‘60s. At the time, Jim Roche was head of the division. It was time to design the annual Cadillac Christmas card, and Mr. Roche instructed the agency to find something ‘heartland’—down-home American, an original work from a good artist.” Lutz continues his story with the tremendous amount of wasted executive time as Roche proceeded to design the card one piece at a time. No wonder GM floundered.

Manufacturing unimportant

Lutz really hit a raw nerve with me with this paragraph, “A car company, on the other hand, is one enormous, hugely complicated organism that has many moving parts, all closely interrelated and interdependent. Many of the company’s activities are day-to-day: running the plants to produce components and assemble cars, procuring supplier parts, moving the finished vehicles to the dealers, billing same and booking the revenue. The operations portion of the automobile business has been thoroughly optimized over many decades, doesn’t vary much from one automobile company to another, and can be managed with a focus on repetitive process. It is the “hard” part of the car business and requires little in the way of creativity, vision or imagination. Almost all car companies do this very well, and there is little or no competitive advantage to be gained by ‘trying even harder’ in procurement, manufacturing or wholesale.”

Try telling Toyota or Johnson & Johnson that manufacturing doesn’t matter. When manufacturing slips up, it can cost the company tremendously in lost profit and brand image. On the other hand, companies such as the former Toyota or Subaru or many others who operate in a Lean manner focusing on continuous improvement prove just how valuable manufacturing can be as a contributor to enterprise profits. I just toured an Audi plant and a Festo plant—each exemplifying a Lean culture and showing how manufacturing contributes to the enterprise. In this issue, I interviewed manufacturing executives from Phoenix Contact, Webasto and Beam Global Wine & Spirits who showed the value of manufacturing.

Lutz thought all the creativity and value was in product development and design. I never bought a Lutz-designed car. It was because the company’s manufacturing couldn’t execute.

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