European manufacturers have many techniques at their disposal to weather tough economic times, but focusing on a few key leadership principles will be the most rewarding of all.
The world’s economy faces its biggest crisis since the Great Depression. Manufacturers of everything from jet planes to mobile phones are sputtering, cutting production and shrinking workforces. There is no quick fix, but there is a long-term solution.
At times like this, strong leaders see opportunity triumphing over problems. In the words of Volkswagen CEO Martin Winterkorn, “The best days of the automobile are yet to come.” A logical response to that is, “Well, they couldn’t get any worse than they are now!” But Winterkorn’s brave optimism, which he proclaimed at the Geneva International Motor Show in March following a year in which VW profits rose 15.4% amid the global turmoil, embodies a leadership spirit that could apply to manufacturing as a whole.
With production down, now is the time to embrace new processes and technologies that will usher manufacturers closer to the elusive low-cost state of agility in which they can constantly recalibrate production according to the world’s ever-shifting market, geopolitical, and ecological realities.
But what’s needed to make this happen is a fresh look at what constitutes leadership in manufacturing. Manufacturing Executive believes there are five key characteristics that every executive in manufacturing needs. They are:
1 Innovate, and then innovate again.
Ideas are the lifeblood of a company. There’s no replacement for innovative individuals and the product advancement they engender. VW, for instance, is budgeting more than €8 billion a year “for development expenditures and investments in new models and environmental technologies,” says Winterkorn, who adds that electric cars and their green potential rank high on the company’s to-do list.
But how do manufacturers ensure that ideas will materialize? How do they transfer brilliance from the brain of the engineer to the brawn of the plant and the receptive arms of the market? And once there, how do they make sure that a sophisticated design and manufacturing process adjusts to realities such as market acceptance, parts availability, and design imperfections? How do they facilitate what management guru Piers Ibbotson in his book The Illusion of Leadership: Directing Creativity in Business and the Arts calls “ensemble behaviour,” in which employees figure out how to share ideas that lead to effective, creative action?
The answer lies, in large measure, in an integrated technological process that can also help extract value from existing assets and cut costs from operations. As engineers convert ideas into products, they typically use product lifecycle management (PLM) software, including sophisticated 3D CAD design programs as well as manufacturing simulation and intelligent databases that store production information in a granular and easy-to-access way.
While PLM offerings from the likes of Dassault Systèmes, Siemens, PTC, and Oracle have advanced, many manufacturers still lag in their ability to tie PLM into the rest of the organisation. Yet this integration is vital to the “continuous improvement” process. The best-laid product design can go awry: Tolerances can fail in actual production or end user deployment; a required part can become unavailable; or a customer can change specifications.
In many manufacturers’ processes, it can take days, weeks, or months for those changes to filter back to design. That means faulty product schematics continue to feed the manufacturing floor. The errors ripple throughout the organisation, as customers potentially receive flawed goods, suppliers can feed the wrong parts, and inventory can build.
