Industrial Excellence Award

Transcrição

Christoph Loch, Ludo Van der Heyden,
Luk Van Wassenhove, Arnd Huchzermeier,
Cedric Escalle
Industrial Excellence
Management Quality in Manufacturing
February 24, 2003
Springer
Berlin Heidelberg New York
Hong Kong London
Milan Paris Tokyo
Contents
Part I Introduction
1
Industrial Excellence Revisited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.1 In Search of Industrial Excellence: Linking Total Quality
Management with Management Quality . . . . . . . . . . . . . . . . . . . .
1.2 Four Basic Industrial Processes . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.2.1 The Supply Chain Process . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.2.2 New Process Development . . . . . . . . . . . . . . . . . . . . . . . . . .
1.2.3 The Product Development Process . . . . . . . . . . . . . . . . . . .
1.2.4 The Strategy Formulation and Deployment Process . . .
1.3 Operationalizing Management Quality . . . . . . . . . . . . . . . . . . . . .
1.3.1 Fundamentals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.3.2 Enablers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.3.3 The General Framework . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.3.4 Best-Factory Tours and Awards . . . . . . . . . . . . . . . . . . . . . .
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Part II The Four Basic Processes
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Visteon Charleville-Mézières Plant: Mastering Production . . . . . .
2.1 Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2.2 Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2.3 Supplier and Customer Integration . . . . . . . . . . . . . . . . . . . . . . . . .
2.3.1 Suppliers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2.3.2 Customers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2.3.3 Forecasting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2.4 Production . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2.5 Quality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2.6 New Product Development/Process Improvements . . . . . . . . .
2.7 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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Faurecia’s Neuburg Plant: Customer Integration Excellence . . . . .
3.1 Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.2 Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.3 Quality Control and Trouble Shooting . . . . . . . . . . . . . . . . . . . . . .
3.3.1 Cooperation Between Faurecia and Audi . . . . . . . . . . . . .
3.3.2 Defect Rate and Error Handling . . . . . . . . . . . . . . . . . . . . .
3.3.3 Internal Quality Measures . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.4 Production . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.4.1 The Paper-less Picking Area . . . . . . . . . . . . . . . . . . . . . . . . .
3.4.2 The Assembly Area . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.4.3 Inventory Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.5 New Product Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.5.1 Small Projects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.5.2 Large Development Programs Process . . . . . . . . . . . . . . .
3.5.3 Local Development Organization . . . . . . . . . . . . . . . . . . . .
3.6 Supplier Integration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.7 Moving Forward . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.8 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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Alstom Transport Equipment Electronic Systems (EES):
Supplier Integration Excellence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.1 Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.2 A New Beginning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.3 Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.3.1 Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.3.2 Make or Buy Objective . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.4 Production Area . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.6 Servicing Over 30 Years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.7 Supplier Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.7.1 The Alstom and Gespac Partnership . . . . . . . . . . . . . . . . .
4.7.2 The Alstom and Ardelec Technologies Partnership . . . .
4.8 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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Schwan-STABILO Heroldsberg – Technikum: Process
Development Based on People . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.1 Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.2 Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.3 Fractal Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.3.1 Production . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.3.2 Quality Control and Assurance . . . . . . . . . . . . . . . . . . . . . .
5.4 Product and Process Development . . . . . . . . . . . . . . . . . . . . . . . . .
5.4.1 Product Changes and Process Improvement . . . . . . . . . .
5.4.2 New Product Development . . . . . . . . . . . . . . . . . . . . . . . . .
5.5 People . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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5.6 Customer Integration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.8 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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Fresenius Medical Care Deutschland GmbH: New Product
Development Excellence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6.1 Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6.2 Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6.2.1 Industry and Competitive Strategy . . . . . . . . . . . . . . . . . .
6.2.2 Strategy Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6.3.1 Customer Integration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6.3.2 Technology Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6.3.3 Combination of Basic Research and Product
Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6.3.4 Product Modularity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6.3.5 NPD Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6.4 Production . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6.4.1 Production Planning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6.4.2 Quality Assurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6.7 The Future . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6.8 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The Solvay Automotive Group’s Laval Plant: Excellence in
Strategy Formulation and Deployment . . . . . . . . . . . . . . . . . . . . . . . .
7.1 Background: Becoming a Major Plastics Supplier to
Automotive Companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7.2 Strategy: Competing in the Automobile Industry . . . . . . . . . . . .
7.2.1 The Plastics Automotive Supplier Industry . . . . . . . . . . .
7.2.2 SAG’s Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7.4 Production . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7.5 Deploying Strategy: Delegating Quality and Improvement
to Laval’s Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7.6 Organizing Work Cells for Participation, Improvement, and
Flexibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7.7 Quality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7.8 Product and Process Development . . . . . . . . . . . . . . . . . . . . . . . . .
7.9 A Communication Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7.10 Measuring Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7.11 Looking Ahead . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7.12 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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Contents
Part III Management Quality
8
Johnson Controls’ Bochum Plant: People at the Center . . . . . . . . . .
8.1 Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8.2 Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8.3 Production . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8.3.1 Forecasting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8.3.2 Quality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8.5 Product Introduction: Integration with NPD . . . . . . . . . . . . . . . .
8.6 Process Development and Improvement . . . . . . . . . . . . . . . . . . . .
8.6.1 A History of Continuous Improvement . . . . . . . . . . . . . .
8.6.2 Kaizen Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8.7 Culture/Human Resources Policies . . . . . . . . . . . . . . . . . . . . . . . .
8.8 Moving Forward . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8.9 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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Procter & Gamble Crailsheim: The Management Quality
Heptathlete . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9.1 Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9.2 Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9.3 Supplier Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9.5 Production . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9.6 Quality Assurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9.8 Process Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9.9 Employee Development and Delegation . . . . . . . . . . . . . . . . . . . .
9.9.1 Employee Development and Delegation in the
Materials Operations Department . . . . . . . . . . . . . . . . . . .
9.9.2 A View from a Process Engineer . . . . . . . . . . . . . . . . . . . . .
9.9.3 Operations Manager of Alldays Panty Liner . . . . . . . . . .
9.9.4 Motivation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9.10 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10 SEW Usocome: Consistent Management Quality in Operations . .
10.1 Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10.2 Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10.3 Perfambiance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10.4 Production . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10.4.1 Production Forecasting . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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10.8 Process Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 186
10.8.1 Working Knowledge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 188
10.9 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 191
Part IV Plants in the New Millennium
11 Empirical Validation of the Management Quality Model . . . . . . . .
11.1 Process Improvement Rates and Volume Growth . . . . . . . . . . . .
11.2 How Management Quality Boosts Improvement Rates . . . . . . .
11.3 Management Quality as an Interlocking System of Practices . .
12 Manufacturing at the Beginning of the 21st Century: a New
Mindset . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
12.1 Excellence Now: What Manufacturing Organizations can
Learn . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
12.2 How to Use INSEAD’s IEA Questionnaire to Progress: The
SEW Bruchsal Usocome Example . . . . . . . . . . . . . . . . . . . . . . . . . .
12.3 The Shifting Frontier of Excellence in the 21st Century: a
New Mindset . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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Part V Appendices
A
The Industrial Excellence Award (IEA) . . . . . . . . . . . . . . . . . . . . . . . . 215
B
The Questionnaire . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 221
C
Data and Measures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 231
C.1 The Sample . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 231
C.2 Measures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 232
D
About the Authors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 237
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 241
Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 245
1
Industrial Excellence Revisited
What is industrial excellence? This question has generated enormous activity over the past century, fuelled especially by the changing business landscape arising out of the industrial revolution. Industrialization is concerned
with the emergence of explicit (as opposed to artisanal) ways of producing
goods. Setting up an explicit process for making cars has allowed repeatability and scale, as best testified by the evolution of the automobile industry,
from garage job shops at the beginning of the century to the extensive global
automobile enterprises we know today. Similar transformations have happened in other industries, including equipment manufacturing, pharmaceuticals, electronics, and – more recently – housing construction and services.
McDonalds, Pizza Hut, Carrefour, Wal-Mart, Benetton, Gap, and Zara are
vivid corporate illustrations of this phenomenon.
Industrialization is often regarded as a “mature” or “pre-modern” concept. But is it really? We found it intriguing to revisit the state of industrial
excellence at the end of the twentieth century – one that has seen so much
progress in this regard. To conduct an adequate survey of the existing state
of affairs would necessitate a detailed description of leading industrial practices. We soon concluded that we also needed a precise framework or “lens”
to guide our evaluation of the industrial sites we were about to visit.
These thoughts prompted us to initiate two Industrial Excellence Awards
(IEAs). A first competition was initiated in France in 1995. Our “Top Usine”
award was offered in collaboration with the French industrial magazine
L’Usine Nouvelle, that provided the essential publicity for the competition as
well as recognition and exposure for the winning factories. Since 1997 we
have been offering the same award to German plants and industrial units
with the title of “Die Beste Fabrik”, in partnership with the German economic weekly WirtschaftsWoche. Participating firms fill in a questionnaire
which is detailed in Appendix B. Answers containing supporting corporate
documents are then analyzed. A small number of candidates are selected for
an on-site audit comprised of an INSEAD faculty team, one or two members
from WHU, and several representatives of our two media partners. Win-
4
1 Industrial Excellence Revisited
ners and runners-up are selected by a jury comprised of INSEAD and WHU
faculty members and our media partners. Decisions are based on the documents provided by the corporate contenders as well as notes from the site
visits.
Eight years of the award programme have provided us with a rich source
of knowledge concerning the state of excellence among industrial firms in
France and Germany. This book aims to render a representative picture of
industrial excellence as identified by the IEA. Indeed, most chapters are descriptions of the practices of a recent winner of the award. Other chapters
complement this “picture gallery” with general comments offered in introduction or in conclusion. First, however, let us make explicit the questions
that motivated us when visiting these firms:
• What does an excellent factory look like? How is it managed? And how
is such a factory experienced by its employees?
• What are the “pillars” of industrial excellence? What should the industrial manager particularly pay attention to? Is it technology, people, process, or product, or a combination of these? And what, then, is their mutual relationship?
• What about the deployment of practices like SPC, JIT, or TQM that have
received so much press over the last few decades? What place do such
approaches hold in a broader picture of industrial excellence?
• What about supply chain and new product development activities, which
are receiving increasing attention in both the professional world as well
as in the operations management literature?
These were the questions we formulated when devising the questionnaire
shown in Appendix B, with the aim of contributing to the ongoing journey
towards industrial excellence.
Our contribution comes in two parts. First, we present our “stories”–
factual evidence of the state of industrial excellence in some of our winning
plants. The book’s second contribution consists of providing a framework
for understanding and analyzing industrial excellence. Our major conceptual observation is to overlay the classical industrial process view with a second, distinct dimension characterizing the quality with which the industrial
process is managed. Simply put: process excellence requires managerial excellence. They are the two pillars of industrial excellence.
The result is a more elaborate framework of industrial excellence incorporating both the industrial process and the management that governs its
performance and its evolution. A more complete and accurate picture of the
factors responsible for industrial excellence emerges which formalizes some
of the “conventional wisdom” surrounding industrial excellence: it is not the
processes alone nor the people that manage them, it is the fact that both factors are at play – beautifully designed processes managed in a superb way.
Beyond this dual causality of industrial excellence, we have attempted, in
keeping with industrial tradition and the requirements of our questionnaire,
1.1 In Search of Industrial Excellence
5
to further specify what we mean by “process” and “management quality”.
We identify four fundamental processes and seven managerial characteristics that, for us, underpin the factors yielding industrial excellence.
This, then, is essence of the book’s contribution: a representative description of leading industrial practices coupled with a framework for presenting
and understanding excellence of this kind. The framework is based on the
dual notions of industrial processes and management quality; our argument
is based on descriptions of industrial excellence. Before commencing a preliminary explanation of our framework, we briefly review the huge literature
relevant to our topic.
1.1 In Search of Industrial Excellence: Linking Total Quality
Management with Management Quality
Industrial excellence often evokes images of people rigidly tied to their machines, putting in time at the expense of their personal lives, much like the
central character portrayed by Charlie Chaplin in the film Modern Times (a
must for any student of industrial excellence). Eight years of Industrial Excellence Awards have left us with a totally different image; an image capturing a rich and diverse range of operators and managers jointly tackling and
conquering industrial challenges for the benefit of the world around them,
in a way that gives meaning to their work and their lives.
Our IEAs provide overwhelming evidence for the primary role played
by the quality of management – the primary focus inevitably being the manager of the industrial unit. There is no question that the ability of a plant
manager to articulate a clear direction, communicate this vision, and impress
upon all collaborators a collective responsibility for the unit’s sustained performance, is a key characteristic portrayed by the managers of our awardwinning units. Over these eight years our conviction has been strengthened
that – more than competitors, more than technologies or government regulators – the key threat potentially facing any industrial unit is a change in its
leadership. Paradoxically, the tree of industrial excellence takes root at the
top.
This recognition of the key role of the plant’s management does not imply
that these senior managers are necessarily recognized corporate “superstars”
– though, in our eyes, they should be. These individuals indeed project the
characteristics of management at its best: an understanding of the upcoming
challenges facing their industrial unit, a humble view of their own role and
of the limited capacity of any single person to change things on his or her
own. These leaders are deeply imbued with the necessity to continuously
recognize and respect the critical contributions made by their colleagues in
the management team on the one hand, and by all operators across the industrial unit on the other. In sum, we reached the view that the quality of an
industrial unit is determined, more than by any other factor, by the quality
6
of the management of the unit understood in its broadest and most collective
sense. To the physical dimension that binds the operators along an assembly
or transformation line, one needs to add a managerial bond that links them
all, operators and managers alike.
This conclusion is hardly startling in one sense. Does not the widelytouted Total Quality Management (TQM) movement make the same claim?
After all, continuous improvement practices based on operator training, the
use of statistical methods, and a focus on customer quality, point in the same
direction. The TQM movement has spurred three continental contests – the
Deming Prize in Asia, the Malcolm Baldrige National Quality Award in the
United States, and the European Quality Award (awarded by the European
Foundation for Quality Management). All three promote TQM as the key
to industrial competitiveness, upgrading its implementation to a national
imperative!
In this book, we go beyond TQM and probe for the managerial and organizational levers that provide an improved map of the journey to industrial
excellence. Let us not forget that the 1992 Baldrige Award winner, the Wallace Company, single-mindedly pursued TQM into bankruptcy two years
later (Hill 1993, p. 75). TQM by itself cannot ensure industrial success. The
formula is more complex, as is evident from the approach guiding the European Quality Award.
The success or failure of TQM, its proponents say, hinges largely on intangible factors including management commitment, corporate culture and
climate, the level of administrative skills, and “learning” within the organization (Powell 1995, pp. 15–16). Unfortunately, to an executive deciding
whether to invest in a costly and time-consuming TQM program, such observations provide an insufficient guide. What is an “appropriate” culture?
Can one measure when a culture is sufficient to warrant the introduction of
TQM, and, if so, how can one measure the contribution TQM might make to
the culture of the firm?
To explain these discrepancies of outcome and offer more operational directions for improvement, several lines of argument have emerged. The most
prominent, surely, is the “Business Process Reengineering” (BPR) school
(Hammer and Champy 1993), which many saw as a direct competitor of
TQM. BPR shifts the emphasis to more “radical” methods of change applied
to the (re-)design of a unit’s industrial processes. Rather than concentrating on incremental and bottom-up improvements to existing processes, as
recommended in the TQM scheme, BPR targets the entire organization for
a complete redesign of its critical processes. According to Hammer (1996,
pp. 81–82):
“TQM is, at its heart, a problem-solving regimen [that] isolate[s] the
particular problems [. . . ] Re-engineering no longer seeks to enhance
individual process stages, but reconsiders anew how they might best
be put together.”
1.1 In Search of Industrial Excellence
7
Notwithstanding the differences in their approach, TQM and BPR are
fundamentally similar in concentrating on process improvement and redesign (Cole 1994). They are increasingly viewed as complementary rather
than incompatible, being aimed at different levers of change. As is the case
with TQM, the evidence supporting the BPR school is largely anecdotal.
Hard evidence that either process improvement school – pursued on its own
– has consistently enhanced industrial performance is scant (Powell 1995).
Resources
Activities
Dynamic
Capability
Development
Fig. 1.1. From resource-based view of the firm towards dynamic capabilities
Other parts of the strategy literature also have salience for our purpose.
One approach called the “resource-based view of the firm” goes back to
Penrose (1959) and has been further developed by authors like Wernerfelt
(1984), Rumelt (1984), and Powell (1995, 1996), among others. This approach concentrates on how to best exploit the firm’s resources so as to enhance efficiency and reveal “optimal product-market activities” (Wernerfelt
1984, pp. 171–172). Wernerfelt defines a resource as “anything that could be
thought of as a strength (or weakness) of the firm”. The fundamental idea
is that the firm has at its disposal a finite stock of resources (R&D, process
knowledge, HR, etc.) that form the basis of its performance. These resources
are deployed in the firm across a set of activities which generate its basic
revenue flows.
The recognition that a firm’s resources take time to build, whereas its
activities can be changed relatively quickly (Dierickx and Cool 1989), thus
highlights the need for the management to pay due attention to the dynamics of resource development. Indeed, the underlying source of a firm’s performance is not to be found in its activities – which directly generate profits
but are easily imitable – but in its underlying resources which are much more
difficult to acquire. The key to performance, according to this school of strategy thought, is the way resource endowments are built up (or down) over
time, something that is referred to as a firm’s “dynamic capability building”
(Teece et al. 1992). (See also Fig. 1.1.)
The resource-based view acknowledges the usefulness of TQM and reengineering school techniques as being part of a firm’s resource stock. Its
main limitation is that its criteria for success are too abstract for the industrial
manager and do not provide a clear guide for action. From a conceptual
8
viewpoint, the resource-based view leaves too much for the manager “to fill
in”.
Our framework aims at bridging this gap. On a more conceptual level,
we also diverge from the sharp distinction between resources and activities,
instead relying on the more operational notion of “industrial process.” This
avoids the huge “grey area” surrounding questions of definition like when
a process becomes a resource and when it remains an activity. We find the
process notion a better concept for strategic thinking: it is clear for all to see
and must be seen in conjunction with the quality of the management that
is applied to it. When managed successfully, processes can over time become real “core competencies” for the corporation. Our final comment on
the resource-based view is that it is precisely through excellent process management applied to core processes that dynamic capabilities are built. Industrial processes and their management are, for us, the keys to organizational
competence and performance.
A more externally-oriented strategic approach builds on the extensive industrial organization literature of economics. Its most modern proponent is
Michael Porter who therein found sources for his theory of sustainable competitive advantage – of which industrial excellence is a crucial aspect. It is
remarkable that Porter’s approach, which had a quite different origin, converges to the same conceptual conclusion: competitive advantage rests on
the preservation of unique “assets” within the firm that cannot be easily imitated by its rivals. Also referred to as “differentiation”, uniqueness is embodied in a wide variety of forms including brand image, technology, product
and process features, customer service and the like (Porter 1980, p. 37).
In a subsequent article appropriately titled “What is strategy?”, Porter
(1996) makes a statement more directly relevant for those interested in industrial practices. According to Porter, the fashionable search for quality and
process improvement will, at best, yield “operational effectiveness”, or what
economists might refer to as “economic efficiency”, that is, finding the most
economic way to use valuable and limited resources. Benchmarking activities are ways to ensure that the industrial unit is on the “efficiency frontier”.
Porter dismisses operational effectiveness as only a first step, albeit a necessary one, which, at best, allows the industrial unit to operate on a par with
other market competitors.
Porter’s major point is that this “benchmarking with the market” should
not be confused with wider considerations of strategy aimed at preserving
differentiation of the firm’s activities from those of its competitors. He argues
that the exclusive focus on operational effectiveness is actually homogenizing firms, driving down profit margins as firms copy each others’ production methods (or “best practices”) and engage in brutal price competition.
Porter’s prescription for differentiation lies in choosing a clear strategy for
pursuing differentiation and then sticking to it. The creation of consistency
in activities and, beyond that, of mutual reinforcement among all facets of
a company’s operations, is paramount for Porter. Uniqueness requires all
1.2 Four Basic Industrial Processes
9
of the firm’s multiple activities to become “aligned” and self-reinforcing.
Therein lies the heart of differentiation. This book takes the same view, with
one major caveat: we disagree with Porter when he states that operational
effectiveness is at best an equalizer, not a differentiator. We present clear
evidence – through example and statistical data – that Management Quality
represents a system of interlocking parts. Such a system is not easily imitable
and can thus be a firm’s source of competitive advantage.
In a sense, Porter’s view of strategy is faithful to the great tradition of one
of the fathers of manufacturing strategy, Wickham Skinner, who so forcefully
argued for the value of “focus” in operations (Skinner 1969, 1974). A clear
direction understood and pursued by all and the substitution of costly tradeoffs imposed by an overly broad corporate agenda for a focused operational
agenda allows the realistic and sustained pursuit of performance. Skinner
considered these to be the fundamentals of industrial excellence. Porter can
be viewed as having extended them to include a clear choice about a set of
complementary and self-reinforcing activities.
The work on “lean thinking” by James Womack and Daniel Jones – derived from a careful study of leading practices in the automobile industry
– can also be considered a further characterization of the “focus” concept
(Womack and Jones 1996). Going beyond the need for a clear value proposition as argued by Skinner, Womack and Jones introduce concepts such as
waste elimination, flow management, “pull” methods of manufacturing, and
the pursuit of perfection in operations as being fundamental to industrial
excellence. At the cost of some conceptual elegance, theirs is indeed more
operational and prescriptive than competing strategic frameworks. Womack and Jones do not limit themselves to ex-post references to well-known
success stories. In contrast, they provide the industrial manager with recommendations of an operational nature that help in the formulation of an action
agenda aimed at excellence.
In this book, like Skinner and Womack and Jones before us, we take up
the quest for a clear and operational characterization of industrial excellence.
As stated before, our characterization rests on the dual notions of process and
management quality.
We start our characterization with a discussion of four processes that we
view as fundamental to industrial performance. Thereafter, we will present
our definition of the “management quality” that needs to be applied for these
processes to achieve excellence.
This section examines the content of industrial excellence: What is it that an
industrial firm needs to do well in order to perform at an excellent level in a
sustainable manner?
10
Operations
strategy formulation
and deployment
New product development
Process development
Resource technology
Knowledge management
Supply chain
Supplier integration
Manufacturing
Customer integration
Fig. 1.2. The four fundamental processes of the industrial unit
Our answer consists of four sub-parts, each pertaining to a business process fundamental to industrial excellence. The originality of our contribution
lies in identifying industrial excellence in clear process terms, as opposed
to the traditional performance metrics of cost, service, speed, quality, and
flexibility, which are then seen as the consequences of process management
choices. Before elaborating, we first define the four process pillars of industrial excellence (see Fig. 1.2).
1. The supply chain process encompasses the physical supply activities of
goods and services, from the delivery of material and information inputs
to the industrial unit, to their transformation inside the unit, and their
delivery to the client using existing distribution channel activities.
2. The process development process refers to those activities aimed at the improvement of the industrial unit’s processes and activities, whether they
pertain to the supply chain, to product development, or to other tasks of
the organization, including strategy formulation and deployment.
3. The product development process consists of activities concerned with the
improvement of the firm’s current portfolio of products and services as
well as with the development of the industrial unit’s next generation of
products and services. This process is concerned with ensuring the company’s future product and service portfolio.
4. The strategy process is concerned with the formulation and deployment
of the strategy chosen by the industrial unit in a way that engages the
entire unit (and its current and future suppliers and clients) and sets clear
goals for it.
11
1.2.1 The Supply Chain Process
This process is concerned with the execution of current business: receiving
material inputs (supplies), converting them into products and services, delivering them, capitalizing on the flow of information, and managing the
physical side of “value creation”.
Excellent managers have the ability to design and manage physical production as an entire system, from procurement to customer integration. Such
individuals aim for the optimization of the overall system, including its constituent parts and their interrelationships (reaching all the way to the customer), rather than concentrating on individual aspects of industrial operations. In the language of the BPR school, such managers aim to “tear
down walls” between supply, procurement, internal operations, and “downstream” operations in a commendable effort to engender cooperation in the
pursuit of mutual long-term interest (Hammer 1996, pp. 168–190). Marking a sharp break with past short-term adversarial relationships, these closer
industrial ties allow corporations to enhance the quality of their operations
and services while simultaneously cutting costs. Suppliers are enticed to
participate in this never-ending search for quality and continuous improvement by the prospect of longer-term contracts and enduring business relationships. Furthermore, information on company and supplier performance
must be shared throughout the industrial system. This includes feedback
from customers via the distribution network and evaluation of suppliers in
the procurement network, quality controls, benchmarking, and supplier and
customer input on potential improvements of the industrial unit’s processes.
Indeed, the sharing of this information allows downstream clients to better
manage the impact on their own activities of problems arising upstream in
the supply chain.
This shift to a more horizontal view of industrial activities is further fostered by the growing focus of many corporations on their core competencies.
This reduced industrial scope is realized through the outsourcing to supply
partners of a number of activities previously handled inside the firm. The
imperative to incorporate the best and often most technologically-advanced
components in their products has forced companies to increasingly scan the
market for superior supply capabilities and thus elevated supply chain issues in the mind of managers. The globalization of supplier networks has
also added tremendous cost pressure and has resulted in further disintegration of traditionally integrated companies (Trent and Monczha 1999). Few
are the firms today that are not active in the supply chain “game.”
Finally, we wish to stress the need for the supply chain to include a clear
interface with the customer. “Customer integration” has become the final
link in the supply chain. In our view insufficient attention has been paid to
the way the supply chain interacts with the customer. The “Intel Inside”
campaign is a reminder that the supply chain reaches all the way to the
customer’s mind. Over time, a plant’s performance does influence the cus-
12
tomer’s final purchase decision and satisfaction. Critical, then, is the correct
definition of the customer, especially in the industrial context where the immediate client tends to differ from the final customer and what he or she
seeks (Kim and Mauborgne 1997). Customer integration may indeed be a
firm’s differentiator and the cause for an industrial unit’s performance. An
overly internal focus may lead a firm to pay insufficient attention to customer
requirements, even to the point of ignoring the customer experience. These
issues, too, must be part of the supply chain debate inside an industrial unit.
1.2.2 New Process Development
Herein lies one of the great contributions of Japanese manufacturers over
recent decades: the view that process improvement and development is key
to industrial competitiveness. This was well described in the MIT study of
the automobile industry, entitled “The Machine That Changed the World”
(Womack et al. 1990).
Products and services are only the outputs of ongoing business processes
or “ways of doing things.” Competitiveness must thus be rooted in a superior ability to run these business processes. Furthermore, “best practices”
diffuse over time, making process improvement an ongoing competitive requirement. Pushing this argument to its conclusion, sustainable competitiveness must, then, be rooted in a superior ability to improve one’s processes faster and better than one’s competitors. This view is articulated in
“Dynamic Manufacturing: Creating the Learning Organization” by Hayes
et al. (1988) and in the widely-read “The Fifth Discipline” by Senge (1990).
This emphasis on learning has been fuelled by the IT revolution. The remarkable development of information technologies has promoted the view
that information should flow freely throughout the organization and become
available to all. This associates process development closely with information and knowledge systems, which have both gained in prominence over
the last decade. We recognize this important development by including process development as a separate process in our excellence framework.
1.2.3 The Product Development Process
In the last decade, much attention has been paid to the importance of product development for the economic health of the industrial unit (Wheelwright
and Clark 1992, 1995). Any industrial framework today must explicitly integrate this fundamental aspect. The mission of product development is to
create the means to generate future business; it does so through the design
of new products and services or through upgrades of current products and
services.
In a competitive market, firms are required to regularly develop new
products or upgrade existing ones. Distinguishing their own products from
those offered by competitors is a necessity. Yet product parameters cannot
13
be planned in isolation from the industrial processes. It is well understood
that product and manufacturing process design are, in fact, one system that
must be designed as a whole: product design influences manufacturing performance, and the manufacturing system influences the product design’s
functionality (Nevins and Whitney 1989). For example, product variety and
product costs, design quality and costs all require trade-offs between what is
ideally desirable and what is economically justifiable. Given rising – but also
more volatile – consumer expectations, striking the right balance between
time-to-market, price, and quality in products and services has become a
critical challenge to managers (Ulrich and Eppinger 2000). The speed and effectiveness with which the product development process is managed is thus
critical to the unit’s performance; indeed, it is from this that new responses to
customer desires and challenges emerge. The product development process
has come to the forefront of the industrial landscape.
1.2.4 The Strategy Formulation and Deployment Process
We have already referred to the view advocated by Porter (1996) that all activities of an industrial unit must contribute to the pursuit of a clearly formulated and shared goal for the unit. The formulation and deployment of
a clear and distinct strategy thus represents a process of critical importance:
the process by which targets and goals are set as well as criteria for success.
This process should engage both management and workers by setting priorities in the pursuit of a common collaborative agenda. It then involves
the systematic evaluation of progress in this pursuit and the formulation of
corrective actions should goals prove elusive or not well-formulated.
One too easily assumes that the process of defining a goal and checking
progress towards it is simply a matter of “strategic leadership” and synonymous with having a leader for the industrial unit of appropriate “strategic”
vision. This, in our opinion, is too simple a view as we will illustrate. The
leader works in a context which he/she influences, even shapes, but only to
some extent. While leadership succession is indeed important, every leader
typically is chosen as the outcome of a decision process (e.g., Collins and Porras 2000, pp. 170–173). Before a leader appears on the scene, many processes
are in place, poised to contribute to that leader’s success, and vice versa. Possibly the most important leadership action is the design and execution of the
process by which business strategy is formulated, information gathered and
analyzed, and goals and progress measured, communicated, and evaluated.
It is this “process view of strategic leadership” that is presented here: the
view that competitiveness is rooted in business processes more than in the
innate qualities of any particular individual who happens to assume, for a
period of time, the ultimate responsibility for the performance of an industrial unit. If this were not the case, the fortunes of industrial units would go
up and down with their leaders. This may be the case, but one should then
talk about leadership excellence, not industrial excellence. Subscribing to the
14
view that a leader is only as good as his support team, we will examine how
leadership teams systematically interact with each other so as to formulate
strategy and deploy it throughout an industrial unit.
Our strategic framework thus lines up with the “process” side of the strategy literature and is more neutral on the actual content of the pursued strategy. In other words, regardless of the details of their precise strategic plan,
excellent industrial managers share a few characteristics in the way they formulate and deploy strategy. First, they ensure a strategy is formulated whose
pieces work together so that the company moves forward in a coherent direction. This requires that the various business processes “fit” together and that
options that would not make sense for the entire system are eliminated, at
least until the sub-processes that might create obstacles to success are made
to evolve in the right manner. Second, the “fit” has to be clear to the actors of
the various processes. This means that top management has to (1) communicate its strategy effectively, from middle managers to operators on the factory
floor, and (2) be open to input from these individuals regarding the problems
that may arise in the pursuit of the chosen strategy. Excellent managers do
not merely dictate what must be done, they clearly articulate company goals
and the motivation behind them while allowing for adequate flexibility in
implementation (Porter 1996).
Having positioned a strong process orientation as one of the two pillars of
our basic framework, we now turn to our second pillar, which concerns the
management quality that needs to be applied to these key processes if they
are jointly to excel.
1.3 Operationalizing Management Quality
Repeated observation of the leadership of some of the best industrial units in
France and Germany has led us to formulate a model of management quality
that formalizes the best managerial practices observed. The model proposed
thus has the validity of being grounded in repeated observation and also
in common sense. Other models of management quality (e.g., Powell 1995,
Ittner and Larcker 1997, Miller and Roth 1994) share features with our model,
but none is as precise and complete in its operational description.
1.3.1 Fundamentals
The first three aspects of management quality are well known and are typically regarded as the essence of “good management”. At this level, our contribution might be that we single out “integration”, at the same level as the
other two, namely “direction setting” and “delegation” (see Fig. 1.3).
15
Direction
setting
Integration
Delegation
Measurement
Communication
Participation
Employee development
Fig. 1.3. Components of management quality
Direction setting. Management starts with clear direction- (or goal-) setting.
Short of a clear direction, actions can be at best partial and at worst confusing, communication remaining incomplete and ambiguous. Though
direction-setting alone is not synonymous with management quality, it
certainly is its first necessary condition. At the plant level, directionsetting is facilitated by a clear focus, as well argued by Skinner (1974).
No one set a better example of direction-setting than President John F.
Kennedy when he challenged his fellow Americans to send a man to the
moon, or than Winston Churchill, when, as Prime Minister, he committed his British compatriots to resist the enemy during World War II. These
examples underline the necessity for direction-setting: to be clear, motivating, and operational. By “operational” we mean that upon hearing
the direction set, each individual concerned will start thinking of ways
to contribute to the announced goal.
Delegation. It is equally clear that management essentially consists of organizing work for others. In short, management entails substantial delegation. One regularly hears of “poor managers” trying to do too much
themselves, perhaps driven by the conviction (maybe rightly) that their
contribution is of higher quality than that of their collaborators. Today,
factories employ more complex, capital-intensive technologies than in
the past. They must respond more quickly to changes in globally competitive markets with employees that may be more difficult to lead than
before. So it is not simply work that needs to be delegated, it is the traditional top-down, command-and-control structure that needs to be reviewed, literally from top to bottom. Senior executives are increasingly
learning to delegate decisions to functional departments and teams that
16
have more direct and detailed knowledge of manufacturing or service
processes. This trend toward decentralization of decision-making is also
referred to as “employee empowerment” (Powell 1995, Ittner and Larcker 1997).
Integration. The complement of delegation is integration. The more decision-making is decentralized, the more one must regularly re-align all
to the common goal. This is the case both within the firm and in relations with suppliers. Horizontal integration ties the firm into the supply chain, aligning it not only with its suppliers but also with its customers. These links are considered vital to achieve fast response times,
high quality, and competitive costs. Vertical integration refers in this
book to the strategy deployment process, requiring the formulation of
consistent sub-goals for each organizational sub-unit as well as prioritization and the assignment of responsibility. Finally, temporal integration of the firm – the near-simultaneous execution of research, marketing,
design, and manufacturing problem-solving – further reduces time-tomarket and enhances manufacturability (Wheelwright and Clark 1992;
see Hendricks and Singhal 1997, Datar et al. 1997 on the advantages
of being early to market). These integration linkages rely on both open
information (to see all effects of individual decisions) and aligned incentives (to pursue the global rather than the local goal).
1.3.2 Enablers
Direction setting, delegation, and integration are supported by four enabling
managerial practices if they are to function well.
Communication. First, directions and goals need to be communicated frequently and to all employees in order to become a shared reality within
the industrial unit. Delegation and integration similarly require excellent communications. Effective communications establish an open culture and equip employees with the information necessary to make decisions consistent with the goals of the firm, and foster alignment and
integration.
Measurement. Second, measurement, both qualitative and quantitative, allows managers to keep track of performance as well as its drivers (for
the study of causality). If the processes are not well-measured, no
amount of progress can be validated with sufficient certainty which
makes direction-setting a sterile exercise.
Employee participation. Third, a proper attitude of participation in the activities of the industrial unit is paramount to achieving success. Employees need to be motivated to make contributions to the unit that transcend
their job descriptions. To foster such behavior, team-based forms of cooperation as well as non-financial and teamwork performance measures
are frequently employed (Ittner and Larcker 1997). For example, one
17
plant manager told us: “We have employees who responsibly and competently manage a large budget of, say, €50,000 in their local sports club
at home. But when they arrive to change in our locker rooms in the morning, they literally check out their brains together with their clothes. The
managerial and organizational challenge is to get all employees to use
their intelligence here as well; the payoff would be huge.”
Employee development. Fourth, too often employees are eager to contribute
to the goals set by the management but lack the proper know-how to do
so. Employee development is an essential tool to foster employee participation and to contribute to decision-making. This includes continuous
training as well as the management of career paths that offer opportunities for personal development and career advancement. Employee development is shown at the bottom of Fig. 1.3 not because it is “lowest in the
hierarchy”, but because it is the absolutely fundamental pillar for management quality. Delegation of ever-more-complex decisions can only be
successful if employees are given the chance to acquire new knowledge
and develop new skills and confidence through such development challenges. This may be ultimately seen as a matter of fairness: can it be fair
to ask employees to participate in the firm’s destiny and make best personal efforts that go far beyond standard job descriptions, if they are not
given the chance to advance themselves and their careers?
The above definition confirms and repeats many common views of management quality, but it does so in a framework that seeks completeness. Each
characteristic is easily seen to enhance management quality by itself; it does
so even more in presence of the other characteristics. Better communication clarifies the chosen direction, motivates employees, and results in increased employee participation. On the contrary, the absence of communications could just as easily be conceived as leading to unsatisfactory unit
performance. The “enablers” can be seen as the glue necessary to “make the
fundamentals stick”.
Another comment to make in support of our definition of management
quality is that it applies across a very broad spectrum of organizational units
and sub-units. The definition applies to a firm, a plant, a work group, and
a project team. A faculty member working with a group of students can
benefit from the framework. As stated earlier, the absence of any one of
the characteristics can easily be thought to lead to sub-optimal learning by
the class. Similarly, to achieve optimal results, no TQM or BPR effort can
succeed unless it applies the effort with a due level of “management quality”,
as defined above. Again, a checklist of “quality attributes” is easily generated
from our list.
We have thus outlined the key of our industrial excellence framework:
management quality applied to the processes that drive the performance of
an industrial unit. Our framework of industrial excellence can be seen as an
18
extension of the TQM and BPR schools in a manner that integrates management quality with process excellence.
1.3.3 The General Framework
The four processes – supply chain, process development, product development, and strategy – overlap and support one another. So do the attributes
defining management quality (see Fig. 1.4 for a graphic representation of
both process view and quality of management). Coherence and synergy can
thus be found within each of our two broad categories. But deeper coherence
can also be found between our two broad categories in that it is management
quality that is needed to reach excellence in each of the fundamental processes and also in the industrial unit itself. In other words, management
quality “oils” the performance excellence of the individual processes, and
also of the entire unit.
The framework, basing a process view of industrial excellence on a foundation consisting of management quality, is the conceptual contribution of
the book as illustrated in the chapters to follow where nine selected industrial units are described from this dual perspective. This was the perspective that guided us when formulating the IEA questionnaire that became our
principal instrument in our search for and validation of industrial excellence.
1.3.4 Best-Factory Tours and Awards
The 10-page IEA questionnaire is broken down into four segments, corresponding to the four basic business processes (Appendix B). Across each
process we probe for the extent to which the seven dimensions of management quality are applied. Respondents are managers of industrial units in
France and Germany which put themselves forward as candidates for our
IEAs. Together with their management teams they fill out the questionnaire.
As attested by a number of plant managers, this exercise is a learning activity
in itself, providing the team with a useful and novel analysis of the workings
of their industrial operations. (See Chap. 12 for the story of one company
that has resolutely adopted our questionnaire for its own benchmarking and
progress activities.)
The submitted questionnaires are then graded by our faculty team and
the top scorers are selected for intensive one-day follow-up visits. It is the
approximately one hundred factory visits accomplished over the last eight
years that have provided us with the opportunity for learning grounded in
industrial excellence. Each year, the selected winners and their operations
are described in feature articles in L’Usine Nouvelle and WirtschaftsWoche, respectively. These winners have also provided the empirical content for this
book.
The basic business processes
19
Operations
strategy formulation
and deployment
Process development
Resource technology
Supplier integr.
Knowledge management
Supply chain
Manufacturing
Customer integr.
Management quality
Employee development
CummuniParticipation
Measurecation
ment
Integration
Delegation
Direction
setting
Fig. 1.4. Management quality applied to the four basic business processes
The nine chapters that follow consist of detailed case studies of a sample
of past IEA winners. Each was selected for this book with a view to illuminating how industrial excellence is achieved and each also illustrates an
aspect of our excellence framework. So each chapter serves a dual purpose.
Before beginning a detailed examination of these industrial units, we preview the major aspects illustrated by each case. The first six chapters illustrate and explore the process view of industrial excellence, whereas the last
three focus more on management quality (see Table 1.1 for a summary view
of how the chapters illustrate our framework).
We start the plant tours with an illustration of excellence in supply chain
management. The Visteon plant (Chap. 2) in the French Ardennes illustrates
20
Table 1.1. The plan of the book
Part
I Introduction
II The four basic processes
Chapter
All are introduced
All are introduced
2 Visteon
Manufacturing
3 Faurecia
Customer integration
Supplier integration
Process development, technology
management
Strategy deployment
Direction, communication, measurement, participation
Direction
6 Fresenius Medical Care
7 Solvay Laval
8 Johnson Controls Manufacturing
9 Procter & Gamble Strategy deployCrailsheim
ment, manufacturing
10 SEW Usocome
Strategy deployment, manufacturing, customer
integration
IV Plants in the
new millennium
11 Empirical validation
12 Our summary
view and future
outlook on industrial excellence
V Appendices
Management
quality dimensions
1 Introduction
4 Alstom
5 SchwanSTABILO
III Management
quality
Basic business processes
A The Industrial
Excellence Award
B The questionnaire
C Data and measures
All processes
analysed
Integration
Participation, delegation
Direction, measurement
Direction, delegation, participation,
communication
Direction, people
development, participation, integration, communication
All dimensions
All dimensions
All dimensions commented upon
21
the complexity of the manufacturing system prevalent in the automobile sector. Management strengths described include direction-setting, communication, measurement, and employee participation.
The Faurecia factory (Chap. 3) provides an excellent example of customer
integration, though new product development and production processes are
also noteworthy. The Alstom plant (Chap. 4) exemplifies integration in supplier management; its new product development and customer integration
activities appear as complementary strengths as well.
The Schwan-STABILO plant (Chap. 5) is a remarkable example of process
development and technology management. Plant management is very attentive to foster the participation of all employees in its goals and the unit
exemplifies delegation.
With Fresenius (Chap. 6), we turn to new product development (NPD),
earlier referred to as an essential weapon in determining the future competitiveness of the unit. Solvay’s Laval unit (Chap. 7) shows the long and difficult
road that must be travelled to reach world-class performance status. It also
shows that strategy formulation and deployment must be accompanied by
clear direction-setting, participation, communication, and delegation.
With Chaps. 8–10, we look more specifically at management quality. Johnson Controls (in Chap. 8) illustrates people management and development
and how such activities contribute to industrial success. The P&G industrial
unit (Chap. 9) offers evidence of all dimensions of management quality, as
defined in our framework. SEW’s plant in Hagenau (Chap. 10) demonstrates
the consistency that needs to be applied for industrial success, and that such
consistency does not come at the expense of performance or employee satisfaction but, in fact, can generate both economic and human rewards.
Chapter 11 shifts from “examples” to systematic data analysis. Based on
data from the 1997 IEA competition, we demonstrate that the application of
management quality across an industrial unit’s basic processes strongly predicts that unit’s performance, measured as growth. Moreover, the data show
that management quality represents a system of interlocking elements that
reinforce one another. Management quality, seen as a systemic feature, can
thus be seen as a core competence of an industrial unit, yielding competitive
advantage over time.
Our concluding chapter (Chap. 12) reviews the insights gained from these
“best factory explorations” and from the statistical patterns associated with
them. We conclude the book with some views on the trends in industrial
excellence that emerge from the examples described.
We hope that, at the end of this journey, the reader will feel better informed and equipped to understand the contours and shapes of industrial
excellence in the coming century. The journey is far from over.

Industrial Excellence Award

Transcrição

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