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Words to Remember

Every manufacturing company today is trying to simultaneously meet several challenges.

Every manufacturing company today is trying to simultaneously meet several challenges. Cost, quality, delivery, and a host of other supporting objectives make life in the fast lane complicated in 2000 and beyond. In striking the delicate balance between these objectives, General Motors continues to try to reinvent itself, and the company has made some progress over the past five years. But there have also been some potholes. The removal of several key word labels from GM’s new manufacturing strategy is part of this process of striking a delicate balance between all the complex forces at work in the industry today and in the foreseeable future.

This disappearing act was officially announced two months ago. “Yellowstone is Dead,” said GM senior vice president, Donald Hackworth, in a January 31, 2000, Detroit Free Press article.

Yes, it is true, that there was a Wall Street Journal article (Robert Simison, February 22, 2000, p. B23) that said “vehicles now being designed will have to comply with new manufacturing principles. GM’s experimental ‘modular’ assembly plant in Latin America is expected to help develop a ‘plug-and-play’ capability . . . GM acknowledges it will have to reach an accommodation with unions.”

And there was a Detroit News article (February 15, 2000) that said “Modularity is alive and well at GM, no matter what they say,” which talked about the Ruesselsheim, Germany plant producing Adam Opel Ag cars using the “leanfield” approach which is another slogan for “complete modularity of parts and components.”

This war of words and disappearing act has distracted us from the fundamental issue once again for GM, the auto industry, and all manufacturing, generally. No matter how you want to order a car—on the Internet, built for you personally, or through midnight auto salvage—you are still buying or leasing a vehicle. This is a product industry, driven by product issues.

Toyota recently announced that the company is introducing 14 new products in 18 months and expects to pick up several hundreds of thousands of new sales from this blitz. Somebody’s market share is going to suffer from this onslaught; I will give you one guess as to which company’s market share has been in the news the most since the advent of the Saturn Corporation. (Not coincidently, it is the new Saturn L platform that is suffering in sales.)

New, better products with better service and new vehicle ownership ideas are what will make a difference at GM and at all the other car companies. One of the ideas floating around in the industry is the multiple-vehicle lease option. In Rochester, New York, this idea has great appeal. I’d like to have a safe, all-wheel drive vehicle to use from November to the middle of April in Rochester. We have had 91 inches of snow so far this season. I’d like to switch to a family car for long trips and I’d like a sporty convertible to drive down to the Finger Lakes wine tasting country on warm summer days and nights. Is there a dealer out there that will let me swap my car under a blanket lease every 6 months? What impact would that have on a car company?

There is no doubt in my mind that when Wick Skinner, the retired Harvard Business School professor, coined the phrase “focused factory” back in the 1960’s, he predicted what is happening in manufacturing today. “Mass customization” is what we called this last decade, and we have used and abused many, many other terms since then in order to demonstrate that at last we really do care how product is made and delivered. But you have to have a product upon which to focus your factory. The Internet sells product. That hasn’t changed the fact that you still have to make and deliver that product.

Grouping parts into modules and modules into platforms and platforms into concepts will always be the driver of this industry. Marketing has a critical role in every company. Even if there is no marketing department, as Tom Kinnear used to say, somebody has to do the marketing. One of the persistent challenges for any company is to get quality market and customer information from outside the company to the inside, unaltered, and in timely fashion.

Products, Markets and Customers. There I said it. These are the words that should never be forgotten by auto manufacturers.


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