US companies come out fighting against foreign competition

After years of a rather dismal showing in several sectors, many businesses in the United States are starting to fight back against foreign competition. The new competitiveness is seen in two ways: An increasing number of companies are automating their factories and, more important, installing computers to coordinate each step of the process.

Looking beyond the fancy machinery, US companies are starting to overhaul their management and employee practices as well.

These trends, evident at this week's Advanced Manufacturing Systems Exposition and Conference here, win applause among many manufacturing authorities.

US companies ``finally see a way that they can take hold of their business and use manufacturing as a competitive weapon,'' says Peter Graham, manufacturing applications manager for Digital Equipment Corporation, one of the exposition's exhibitors.

Many manufacturers are starting to take action.

``Strategic planning just absolutely is a necessity now,'' says Grant Hollett, executive vice-president with Cherry Electrical Products Corporation.

A year ago, the Waukegan, Ill., maker of switches and other electronic products introduced a just-in-time process in two areas of its factory. The idea is to get parts from suppliers just in time as they are needed by the manufacturer. ``It met my expectations and then some,'' Mr. Hollett says now. Just-in-time cut the lead time needed to make a product from 30 hours to 45 minutes, reduced factory floor space by a third, saved the company $250,000 a year, and allowed 10 percent of the work force to be transferred to other areas.

Imperial Eastman, a Chicago maker of valves, fittings, and other products, has also seen a tremendous improvement in lead time from automating and integrating its manufacturing process.

``We're able now to react to customer needs within days rather than months,'' says Shel Greenberg, Imperial Eastman's engineering director. ``We've had actual situations where we've received an order for a part today -- a part we've never made before -- and had it produced and shipped at the end of that day.''

The most impressive exhibit at this week's Chicago show is a working mini-factory -- producing parts by integrating computers, robots, and other machines. Thirteen companies -- including IBM and Cincinnati-Milacron -- joined forces to produce the quarter-acre exhibit, the first of its kind. The idea is to show companies that the technology for the so-called ``factory of the future'' has already arrived.

Inevitably, problems have cropped up as companies move to automate their factories. There have been difficulties with the technology, including the integration of machines and processes under the new methods. Some companies that have experienced these problems are even slowing down their move toward automation. But the biggest problem, according to manufacturers and others, is retraining employees and managers to work with the new technology.

``That's probably one of the most important secondary effects of using technology -- it changes the way you manage your company,'' says Digital's Mr. Graham.

``The main problems we had were people problems,'' says Cherry's Hollett. ``Things weren't where they always used to be. Some people just had trouble with that.'' One of the most difficult challenges was getting workers to accept bonus payments on a team rather than individual basis, he adds.

These organizational and managerial changes are more important than the push simply to automate the factory, says John Ettlie, senior researcher at the Industrial Technology Institute, a nonprofit contract research organization in Ann Arbor, Mich. ``We're not going to be able to solve our problems with technology alone.''

``The thinking I had in the '60s was: `Gee, these people [foreign competitors] are catching up with us. In the '70s, it was apparent they were passing us,'' says Taylan Altan, a widely traveled director of an engineering research center at Ohio State University. ``But something happened in this country at the end of the '70s.''

It's still too early to tell how well US manufacturers are doing. If they fail, many manufacturing authorities believe the US will lose its manufacturing base.

``I think we're at the point of survival,'' says Jim Burns, partner in charge of manufacturing consulting for Arthur Andersen & Co. ``There's still a long way to go, but it will move very fast.''

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