Customer needs are forcing Delphi Corp. to take a closer look at its competitiveness.
The supplier's senior leadership must identify where it should invest globally and where the company can be most competitive. Key factors to study are: a company's operational processes, the competitiveness of the regions in which it does business, and the people it employs.
"These are the three things that must work to be a competitive manufacturer in today's auto industry," said Don Runkle, vice chairman of Delphi.
Delphi has improved its quality to less than six defective parts per million worldwide, Runkle said on Tuesday at the Management Briefing Seminars. It also is working with its suppliers to improve the efficiency of joint systems.
He said he also has seen significant productivity improvements with its strategic suppliers that Delphi has experienced in its manufacturing operations.
Delphi also is training employees to use a set problem-solving approach it calls Innovation and Continuous Improvement Methodologies. A basic problem-solving course is mandatory for all salaried Delphi employees. The company's goal is to train all its salaried staff and 15 percent of its hourly staff by mid-2005, Runkle said.
"Problem solving is central to lean and a company's ability to be competitive," Runkle said.
Delphi also is focused on where it operates.
In the United States, domestically-imposed government costs are damaging manufacturing competitiveness more than any foreign competitor and adding more than 22 percent to the cost of doing business here, Runkle said, citing a study released last year by the National Association of Manufacturers and the Manufacturers Alliance.
According to the reports, the costs - corporate tax rates, employee benefits, tort litigation, regulatory compliance and energy - make a combined total of an extra $5-an-hour in labor costs in the United States.
Runkle said these non-production costs are factors that offset a large part of U.S. manufacturers' productivity increases.
Said Runkle: "That's a really tough challenge to overcome."