Creating Value for the Customer

You can’t cut your way to prosperity. We’ve heard that phrase often.

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Ex-CEOs who have tried that strategy litter the landscape. You can cut from a failing company to make it more attractive to a buyer, perhaps. But to succeed, you need to have laser-like focus on creating value for your customers.

The benefits of becoming a Lean Enterprise are so well documented that you’d think that everyone is doing it. When we started this magazine nine years ago, one of my colleagues said, “Oh, Lean, that’s so old. Nobody talks about that anymore.” That was an errant observation. In order to be Lean, a company must always be vigilant, always be focused on eliminating waste and always focused on doing things that add value—especially to the customer.

In the not-to-distant past, the company that “invented” Lean—Toyota—got into trouble with some adverse publicity, potential and actual safety incidents, and product recalls. A new CEO took the helm and started looking at cutting costs or circumventing the system, and the company deviated from its Lean vision. Top management must be ever vigilant so that the company does not stray from its course.

>> Wireless, Security, OEE and other topics were discused at The Automation Conference. Click here for coverage of the 2012 Automation Conference.

Many people are skeptical of Lean because too many managers have adopted it as a sort of fad du jour without the total commitment that it takes to be successful. As Dan Armock, vice president at Advanced Engineering & Development for GR Spring & Stamp, says in my article (see p. 30), Continuous improvement is a way of life here. It’s not a program. It’s not an initiative. It’s not a set of tools. It’s a way of life.

Manufacturing strength drives a strong economy, and Automation World readers are among the leaders who make it happen. It’s up to all of us to do all we can to focus on creating value for our customers—and, of course, talking the language of upper management so that they understand the value we also give to our own companies.

But what if you are working for a place that is mired in mediocrity? Management is either complacent or, worse, caught in that cost-cutter death spiral? What should you, an enterprising, energetic engineer or manager, see in your future? Jim Pinto has some advice. I told him: You started a successful company and made some money. Why don’t you share some of your experience and education? So last month and this month, Jim’s columns offer you some of his wisdom and encouragement.

Start a company
Small, entrepreneurial startups are the lifeblood of the economy. People see a need that isn’t being served. Or they see a better way to do something. They start a company. If the idea truly serves a customer need—well enough for customers to make a profit anyway—then a company begins to thrive. From there you can try to build it into a bigger company or sell it to a large company that has a hole in its portfolio. This can happen in manufacturing as easily as Silicon Valley. I’ve seen some good ones.

If you’d like some key words to mine for ideas for your next startup, let me pass a few along. In the two weeks before writing this column, I was at Rockwell Software’s RSTechEd, home for two days, then off to Achema—the world’s largest gathering of the chemical industry—in Frankfurt, Germany. Topics that were on people’s minds included information, metrics, communication and integration. If one of those forms a vector intersection with your skills and interests, follow Jim's advice and go start a company.

>> On the Road at RSTech Ed. Watch Gary Mintchell's preview of new products soon to be unveiled by Rockwell! Visit bit.ly/awvids084

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