Gaming the System: How One Manufacturing Company…

Gaming the System: How One Manufacturing Company…

Apr 19, 2017

“Gaming the System: How One Manufacturing Company Saved Itself With Radical Transparency And Created A Slew Of Blue-Collar Millionaires” By Peter Carbonara, Forbes There are three basic conditions if you want to work for Jack Stack, and they go for everybody from senior executives down to the people who clean his company’s bathrooms. The first is you have to learn how to read and understand the company’s financials, the second is you really have to believe there is no “I” in “team,” and the third is you have to get into the habit of asking, “What could go wrong, and what are we going to do when it does?” Stack, 68, is the CEO and cofounder of SRC Holdings, a Springfield, Missouri, company owned entirely by its 1,600 employees. Since its launch in 1983, SRC’s main business has been remanufacturing engines and other components for trucks, tractors and other heavy equipment, which means taking worn gear and returning it to like-new condition. It’s a tough, highly cyclical business. “If GDP is less than 2%, we’re flat,” Stack says. “If it’s above that, we’re on fire.” Last year, SRC booked $16 million in profits on $532 million in sales to customers like General Motors, John Deere and Navistar. Over the years, SRC has evolved into a highly entrepreneurial miniconglomerate that has launched more than 60 companies in industries ranging from banking to medical devices to furniture. It has also developed an unusual culture–a humane, Midwestern blend of quantitative management, radical transparency and practical paranoia–that has made it the flagship of what’s known as the open-book-management movement. SRC, a place where sports metaphors rule, calls its distinctive brand of open book “the Great Game of Business.” A small but passionate cult of business owners has grown up around two big ideas, which Stack has promoted in two books, The Great Game of Business and A Stake in the Outcome: One idea is that you can boost performance by making a game of tracking and improving key metrics. The other is that if you want employees to care about their jobs as if they were owners, you should make them owners. There are many reasons SRC has...

What Does ‘American Made’ Mean to You?

What Does ‘American Made’ Mean to You?

Apr 18, 2017

By Mark Shortt, Design-2-Part Magazine The words ‘Made in the USA’ are becoming increasingly relevant for reasons ranging from pride in workmanship to protection of corporate and national security interests. Here’s a look at some of the forces that are driving companies to keep their manufacturing close at hand. It’s a pretty dynamic landscape for American manufacturers today, much of it being spurred by enabling technologies, economic uncertainties, and agile business strategies that can quickly adapt to changes in market forces and customer demands. There’s also a new administration in place that figures to alter the landscape in significant ways. Amid all the new developments, it’s useful to hear what people in the thick of the action think. With that in mind, D2P reached out to manufacturing leaders—executives, entrepreneurs, and advocates—to hear their insights on the current state of U.S. manufacturing, as well as a number of issues relevant to the industry. What’s the State of American Manufacturing Today? Scott Paul, president of the Alliance for American Manufacturing (AAM), gives it a passing grade, saying that “it’s doing okay, broadly speaking,” but faces significant challenges. While the automotive sector has been a real bright spot, leading the economic rebound from the Great Recession, there have been ongoing challenges with respect to global competition, he said in an interview. “In particular, firms that are in direct competition with China have, I think, very mixed experiences with that. And unfortunately, that imbalance has helped to dampen the potential job gains that we’ve so far realized. “Obviously, the political environment has changed quite a bit, and many people in manufacturing see a lot of opportunity for changes in public policy that would help grow manufacturing in this country,” he continued. “A few see some risks to progress, as well. And, underneath all of this is the fact that technological progress, innovation, and management practices continue to evolve. And I think that will inform the future of manufacturing as well.” What Does ‘Made in the USA’ Mean to You? Paul believes that when a label reads ‘Made in the USA,’ every bit of the product should be made in the USA, other than if there’s a minimal exception....

The long, rough ride ahead for ‘Made in America’

The long, rough ride ahead for ‘Made in America’

Apr 17, 2017

By Nick Carey, Reuters Mini motorcycle and go-kart maker Monster Moto made a big bet on U.S. manufacturing by moving assembly to this Louisiana town in 2016 from China. But it will be a long ride before it can stamp its products “Made in USA.” The loss of nearly one out four U.S. factories in the last two decades means parts for its bike frames and engines must be purchased in China, where the manufacturing supply chain moved years ago. “There’s just no way to source parts in America right now,” said Monster Moto Chief Executive Alex Keechle during a tour of the company’s assembly plant. “But by planting the flag here, we believe suppliers will follow.” Monster Moto’s experience is an example of the obstacles American companies face as they, along with President Donald Trump, try to rebuild American manufacturing. U.S. automakers and their suppliers, for example, have already invested billions in plants abroad and would face an expensive and time-consuming transition to buy thousands of American-made parts if President Trump’s proposed “border tax” on imported goods were to become law. When companies reshore assembly to U.S. soil – in Monster Moto’s case that took two years to find a location and negotiate support from local and state officials – they are betting their demand will create a local supply chain that currently does not exist. For now, finding U.S.-based suppliers “remains one of the top challenges across our supplier base,” said Cindi Marsiglio, Wal-Mart Stores Inc’s (WMT.N) vice president for U.S. manufacturing and sourcing. Wal-Mart partnered with Monster Moto and several other U.S. companies in a drive to increase spending on American-made goods by $250 billion by 2023 in response to consumer demand for American-made goods. Their experience has shown Americans’ patriotic shopping habits have limits, namely when it comes to price. Take Monster Moto’s bikes, which sell for between $249 to $749. Keechle, the CEO, says he can’t raise those prices for fear his price sensitive prospective customers will turn to less expensive rivals made in China. “Consumers won’t give you a free pass just because you put ‘Made in USA’ on the box,” Keechle says. “You have to remain price...

US manufacturing expanded in March

US manufacturing expanded in March

Apr 6, 2017

By Vicki Needham, The Hill U.S. manufacturing expanded in March for the the seventh straight month, although at a slower pace than in February, a new survey shows. The Institute for Supply Management (ISM) said Monday that their latest index fell slightly to 57.2 last month from 57.7 the previous month, which was the highest level in more than two years. Any reading above 50 is a sign of growth. New orders and production continued to expand, but more slowly, in March, while hiring and new export orders grew faster, ISM reported. New orders were at 64.5 in March, a drop from 65.1 in February, while production posted a 57.6 in March down from 62.9 in February. Employment hit 58.9 in March, an increase from February’s 54.2 percent — the sixth consecutive month of growth and the highest reading since June 2011.  The new orders index hit 59 in March, up 4 points from February’s 55, the 13th straight month of growth and the best showing since November 2013. Manufacturing added 28,000 jobs in February, the most in a year and the third straight month of growth in the sector, according to Labor Department figures. The next government jobs report is set for release on Friday. Manufacturers are expressing record levels of optimism because of the Trump administration’s plans to cut regulations they argue have weighed on their businesses. Comments from respondents ranged from “business is strong and looking up” in the furniture industry to “looking relatively flat currently, and the view for calendar year 2017 looks to be flat as well” for transportation equipment firms. ...

Has Tesla Found a Better Way to Test and Validate Vehicles?

Has Tesla Found a Better Way to Test and Validate Vehicles?

Mar 24, 2017

By Charles Murray, DesignNews Electric carmaker might shorten the beta test phase of its forthcoming Tesla Model 3 vehicle. A recent statement by Tesla Inc. CEO Elon Musk has auto insiders wondering if the electric car maker has found a better way to test and validate vehicles, or if it is embarking on a risky new course. In the statement made on an exclusive investor-only call last week, Musk reportedly suggested that the beta test phase of the company’s moderately-priced Model 3 EV is being shortened, and that its “early release candidates” are already being built on production tooling. According to various electric car websites, such as Elektrek, Tesla engineers used sophisticated design-for-manufacturability analytics, enabling them to limit the number of pre-production iterations of the vehicle. The result is that the quality of the so-called “release candidates” is higher than it was for the company’s earlier products, the Model S and Model X, reports said. “The most plausible interpretation of this statement about release candidates is that (Musk) has opted to short-cut development testing of prototype vehicles,” noted Sam Abuelsamid, senior reach analyst for Navigant Research , in an e-mail to Design News. “In all likelihood, he is assuming that they can get by with more simulation testing and less testing of physical prototypes.” If that is indeed Musk’s plan, it would be a departure from the way automobiles have traditionally been tested, validated and manufactured. In common practice, beta testing involves months and tens of thousands of testing miles on vehicles built on pre-production tooling. In the case of the Model 3 (photo, left), that phase may have been short-circuited, but it’s difficult to know definitively because Musk often uses different terms than other automakers when describing the process. Tesla did not respond to an e-mail from Design News asking for clarification. Automotive experts said the industry will watch carefully to see if the Silicon Valley carmaker’s software-centric approach is successful, but many were skeptical. “Everybody is trying to accelerate the process of launch,” noted David Cole, chairman emeritus of the Center for Automotive Research . “But if you say you’re going to skip part of the normal process in validating your tooling,...