APICS - TPA - July 1997

July 1997 • Volume 7 • Number 7

The Path To World-Class Manufacturing

A note from the Book Review Editor:

We all should remember Richard J. Schonberger. More than a decade ago, he served as an oracle to explain the enduring character of Japanese manufacturing in "Japanese Manufacturing Techniques: Nine Hidden Lessons In Simplicity." Following this work, was another milestone: "World Class Manufacturing: The Lessons of Simplicity Applied." Both books served to, at once, demystify Japanese manufacturing and lend perspective to the then-elusive concept, "world-class manufacturing."

In the '90s, it is very likely that one could hold a reasonably interesting conversation with most people stopped at random on the issues related to world-class manufacturing. However, one senses a hesitancy over firm suggestions on strategy and tactics to achieve "world-class" status. How ironic that the "simplicity" Schonberger spoke of more than 10 years ago is today reflected in more seeming complexity and an uncertainty of not only how to achieve world-class manufacturing status, but even more important: once achieved, how to sustain it.

World Class Manufacturing: The Next Decade — Building Power, Strength, and Value
By Richard J. Schonberger
The Free Press, 1996.
ISBN 0-684-82303-9
APICS Stock No. 03441
$27 Members; $30 Non-Members

By James D. Reeds, CFPIM, CIRM, C.P.M., CPCM

Richard J. Schonberger is an acknowledged, world-traveling guru of things manufacturing. In "World Class Manufacturing: The Next Decade," he attempts to move the reader toward an appreciation of the more effective performance measures as practiced by so-called world-class manufacturers. Schonberger attributes true world-class manufacturing to the adoption of 16 principles:

Team up with customers.
Capture/use customer competitive, best-practice information
Continual, rapid improvement in what customers want
Frontliners involved in change and strategic planning
Cut to the best components, operations, suppliers
Cut flow time and distance, start-up/changeover times
Operate close to customers' rate of use or demand
Continually train everybody for their new roles
Expand variety of rewards, recognition and pay
Continually reduce variation and mishaps
Frontline teams record and own process data at workplace
Control root causes to cut internal transaction and reporting
Align performance measures with customer wants
Improve present capacity before new equipment and automation
Seek simple, flexible, movable, low-cost equipment in multiples
Promote/market/sell every improvement

The essential question is: If such principles are identified and understood, how is it that only a handful of truly world-class companies exist? What's holding back the rest? Schonberger suggests that the culprit lies in a reliance on traditional, financially- oriented measures of organizational performance. Far more effective, he argues, are measures which: (1) are dedicated to the viewpoint of the customer; (2) encourage maximum inventory turns; (3) foster the total involvement of all employees; (4) institute an information system that is timely and modeled on the attainment and use of "best practices." He sees the 16 Principles as exemplars of effective management of the prototypical manufacturing enterprise of the years to come. Not surprisingly, he terms this view "Management by Principles," rather than less effective management approaches such as "Management by Edict," "Management by Procedures," and "Management by Policies."

Schonberger allows that the progress of most firms toward "Management by Principles" will be evolutionary. To this end, he provides the reader with the 16 Principles matrixed against steps which evolve from "early learning" toward "maturity," or attainment of world-class manufacturing status.

Allowing that this evolution will take time, Schonberger suggests the perspective of a 10-year plan. A decade to allow world-class achievement may seem daunting to those executives who relish short-term results but, as the successful firms cited in "World Class Manufacturing: The Next Decade" show, this time frame is just about right.

With only occasional lapses into jargon, Schonberger's book provides manufacturing enterprises aspiring to world-class manufacturing status with a "catflap" through the door of continuous improvement that is not offered by contemporary business performance measures or thinking. "World Class Manufacturing: The Next Decade" is an investment which provides a firm with a set of principles and stories of best practices to sustain them on their journey to world-class status.

James Reeds, CFPIM, CIRM, C.P.M., CPCM, is the president of Learning Solutions International, an international operations education provider in Davis, Calif., as well as an adjunct associate professor at Golden State University. Reeds is a member of both the Solano Chapter of APICS and the New South Wales Chapter of APICS (Australia).

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