Paul Wilbur is CEO of ASC Inc. in Southgate, Mich.
I also learned the not-so-well-known 4 M's of manufacturing: manpower, machinery, materials and methods. Let's talk about those.
Well, the first three are easy. The value of tapping into the ingenuity of our people is ingrained in our industry, as is the importance of not falling behind in technology and supply-chain management.
But only in recent years have I come to understand fully the power of the fourth M: methods, which is how you lay out your plant and process and how much of the other three M's you use or don't use for any given project.
Forget about health care costs, rising oil and steel prices and all the rest. I'm convinced that a fresh look at methods is the key to sustained competitiveness for an industry reduced almost to madness right now.
Not much change
With all we have been through in recent years, all of us in this industry like to think there is no way we still could be slaves to convention. But is that true?
Today, Dell Inc. can ship essentially built-to-order PCs within days. Apple Computer Inc. can come out with new versions of its iPod faster than you can say "music revolution," and even the yogurt industry can reinvent itself with quick-to-market new products such as squeezable Yoplait Go-GURT.
Is the auto industry keeping up?
I don't think so. And I think a big part of the problem is we're forgetting about - or at least not being creative enough with - that fourth M.
Maybe we should go back to the future a bit, back to before we seemed to think that automation (machinery) wasn't just a good thing but the cure for all the industry's ills, and a bit later when we thought that nirvana lay in ever-lower supplier component costs (materials).
Today, some would say, the whole industry seems to have rushed to the side of the ship labeled "health care fix" (manpower).
Maybe we should go back to before the days when - dare I say it? - nationally syndicated plant-productivity surveys, as valuable as they are for benchmarking apples-to-apples-type projects, weren't, ironically, sometimes diverting the auto industry from much-needed product innovation.
Remember, in the early days of this industry, some decent productivity levels were achieved and a lot of exciting products were built using what today would be considered low-tech methods.
China (not to mention South Korea) is that way today. Sure, labor is cheap over there, but it won't stay cheap forever. And I am a lot more afraid of innovative Chinese products flooding our shores than I am of merely inexpensive ones.
Microniche is the norm
Does the American auto industry really need expensive robots, high-tech conveyers and all the rest for every product program, especially when the average sales per vehicle nameplate are only about 50,000 units a year? If ever there were a statistic that shouts out that a whole new paradigm is needed in this industry, that's it.
The era of the million-unit-a-year Chevrolet Impala or Ford Galaxie is long gone. Fifty-thousand units used to be considered a microniche; going forward, it's going to be considered mass production.
The ASC way
At ASC, we build all 42 major subassemblies for the Chevy SSR in a UAW plant that has just six robots. We use old-fashioned laser-guided carts operating with 12-volt batteries for work-in-process inventory, as opposed to big, costly conveyor systems.
That strategic use of automation enabled us to help General Motors bring a halo vehicle to life and helped GM fill otherwise underutilized capacity. And it helped GM sell an extra 22,000 full-sized pickups in the 2004 model year, according to an independent study by Foresight Research Inc. in Rochester, Mich.
Who knows? In the future, new/old methods such as those may be the only way our industry is going to be competitive in a world of 50,000-unit nameplates coupled with tough new Chinese competition.
One thing's for sure: Being conventional right now is absolutely the craziest thing we can do.