Apple has found itself, surprisingly since it isn’t a manufacturer, at the top of Industry Week’s 50 Best Manufacturers list. Kevin Meyer writing on the ,a href=”http://www.evolvingexcellence.com/blog/2012/07/industryweek-apple-is-not-a-manufacturer.html”>Evolving Excellence blog, takes both IW and Apple to task.
I’ve found this to be a situation in publishing that most of the journalists who cover manufacturing, automation and controls really have no idea what they are talking about. The exception being Walt Boyes (well, I’m implying that I am one, too, since I spent a lot of years actually working–and trying to make a profit–in manufacturing). So they get ideas, but can only cover what people tell them.
Criteria for IW’s manufacturing list is solely financial with some notes by me in parenthesis: inventory turns (good), profit margin (problematic, should probably be some sort of contribution margin), asset turns, return on assets (good), return on equity (maybe too broad in some cases) and revenue growth (a measure of manufacturing or of business performance?).
I’d suggest that the list should begin with the question, is the company a manufacturing company. Apple certainly is not. Its profit margin and return on equity are not due to manufacturing, but to its product design and marketing. Since it invests little in manufacturing (preferring to outsource that function) it has little invested. Therefore return on manufacturing assets had better be very good.
I’m in Germany currently for an update on Beckhoff Automation (disclaimer, Beckhoff paid for me to be here, along with two other editors and a representative of an automation Website). Tomorrow, we’ll receive a tour of the factory in Verl. I will be very surprised if it is not like every other German manufacturing facility that I’ve visited–clean and well run.
American plants are also by and large adopting the latest Lean thinking and running clean and efficient plants. This even goes for system integrators. One important aspect of this new thinking is respect for people (and letting the have some power over the process). Maverick Technologies executives including CEO Paul Galeski pointed out numerous times the company culture to empower employees to solve problems on the spot unless there’s a reason to escalate.
There are plenty of manufacturers doing good work. Sorry, but Apple isn’t one of them.