May 7, 2009
This is going to sound strange, but a recession like this sometimes feels like a breath of fresh air. If a company can operate through a downturn like this relatively unscathed, that's really something. If a company's inefficient, it shutters its doors. Sometimes bad things happen to good companies, but often, the hand of the free market makes all those annoying things about business--political infighting and other wasteful practices--stop, because companies that continue that silliness close their doors.
A downturn like this takes no prisoners--and it doesn't put up with political bull, either.
The best shops I've visited over the past year, as this recession has taken hold, have little bull. Instead, they have a company culture focused on doing a better job. A downturn like this touches all companies, no matter how good they are. Just look at Toyota. But the best companies out there seem to be sustaining by focusing on two things:
1. Diversity. A broad customer base from different industries makes a more stable whole, a fact that has come to light for many contract shops tied closely to one industry, such as automotive.
Diversification is now seen as something vital for stability, and even the politicians are taking note. As George Jackson, president of the Detroit Economic Growth Corp., reported in today's Detroit Free Press, Rep. Carolyn Cheeks Kilpatrick, D-Mich., will recognize W Industries, which has survived and thrived in the struggling Motor City by diversifying outside automotive, adding aerospace, defense, and many other industries to its customer mix.
2. Lean thinking. This phrase has almost become a cliché in recent years, but I've seen some incredibly efficient operations--both OEMs and contract manufacturers--that have taken the philosophy very, very seriously, and thrive because of it.
After visiting Power Curbers Inc., a manufacturer of curb-making equipment just north of Charlotte, I realized how transformational a central tenet of lean thinking--giving people the power to change their situation--can really be. If an employee"s back hurts after lifting a part all day, managers want to know about it. Not only is that unsafe (which, as managers explained, is the most important concern), it"s inefficient as well. The company, with the help of consultants from BMA Inc., has come up with an innovative, though wonderfully simple, system that gives employees the power to make a difference.
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