World Class Manufacturing

The major premise of the certification program in Integrated Resource Management (CIRM) states: "The needs of companies today recognize that World Class Manufacturing companies' most valuable asset is educated workers and as such must be a part of the continuous process of operational improvement." CIRM's further mission is to "define and disseminate the body of knowl­edge that an individual must master in order to function as a professional in effectively managing resources to maintain and enhance the competitiveness of operations within an enterprise." Therefore, in conjunction with world-class manufacturing, APICS, through CIRM, promotes the effective management and integration of an organization's resources to produce and deliver competitive products or services in a world-class environment.

The purpose of this presentation is to hit head on the challenges that United States industry is facing in a world market. If business is war, then the spoils go to the victor. We can and will win. Specific techniques will be discussed which a company must be expected to overcome in their search for excellence. Special emphasis is placed on an on-line, totally integrated business system which is a necessity for being able to compete worldwide. In the summary, a checklist is given of items that need to be incorporated into companies' strategies for becoming a world-class competitor. Methods for their implementation will also be related.

An Integrated Business System

It is extremely important to note that if the U.S. is to become more competitive, then the concept of continuous improvement is imperative. If we trace the evolution of systems, one can determine where we have been, where we are now, and where we must go.

During the early stages of computerization, our concern focused upon the need to improve the clerical position of inventory and production control. This was a paper-pushing function and was pretty much thought of as a dead-end job—a nice place to retire. During this period of time, if a company's profit margin shrunk, one simply raised the selling price and the margin increased.

When the second phase kicked in, we began to understand the real benefits of computerization. As we say today, the connectibil-ity of the software modules helped to improve the communication process. All of a sudden, we were able to integrate the major functions of the manufacturing function as well as interface with accounting. This, then, became a true manufacturing system.

With total computerization, this phase allowed us to integrate all the business functions completely. Now Marketing/Sales, Accounting/Finance, Engineering, and Manufacturing would be integrated and help each other by utilizing current data in order to make decisions.

The next phase and, in many cases, the current phase, is one of refinement. This simply means that we start an aggressive pro­gram of improvement and integration. As an example, EDI and bar coding have almost become a requirement for operations in many businesses. But, in my travels, I find many companies still not using these tools. Other areas, such as tooling and preventive maintenance programs, statistical quality control, supplier certification, and more, are still not effectively integrated with the basic systems.

Software Selection

In order to become world-class, the proper software and hardware should be selected to assure a company that they possess the tools for total integration. Connectivity is the term most used today. This is opposed to fragmentation, which I have found is most prevalent in many companies. APICS' CIRM program is dedi­cated toward improving the integration of a company's main functions.

Many companies are reluctant to change the way they operate; this is the we-have-always-done-it-that-way syndrome. There­fore, resistance to change is one of the most important and difficult obstacles to overcome. The elements of planned change will, in effect, assure the necessary changes, if planned properly.

There are basically six strategies for change. In a war, one has to be very flexible and change quickly to each new skirmish, situation, or condition. This is equally true in the effort to become a world-class company.

First of all, one must utilize scientific knowledge. This means using the latest tools—systems, computers, software, and tech­niques.

Second, by using teams, a company is able to rally all the human resources in order to discuss issues, ideas, and concepts. Team members represent each of the company's functions. After dis­cussing and disagreeing, they finally collaborate on the best approach for solving the problem or approaching the situation.

The third strategy for change is using influence. This involves the company president and his staff. Sometimes, change must be made by edict.

New systems is the fourth strategy. This gives one the framework on which to structure the new system. Each function is responsible for successfully implementing a world-class system.

The fifth strategy is the ability to work within a healthy organi­zation. In order to motivate an organization to move forward and grow, it is important that the company is on firm footing. This means the company must be adopting a continuous improvement philosophy. Improvement means that many of the strengths are strengthened, and the weaknesses overcome. This provides the company with the tenacity to compete worldwide in various environments.

Finally, resistance to change must be overcome. Too many companies are reluctant to spend money on education. They are stuck in a time warp. In my experiences, there is a direct correlation between the amount of education obtained and the degree of success. In other words, the more education, the greater the company's level of success. .

In summary, a company can only be successful by integrating all elements of their company into a closed-loop business system. APICS' CIRM Program demonstrates this concept repeatedly.