The hard road is the best road - modern industrial management - column

Nation's Business, April, 1990 by Robert Slass

The Hard Road Is The Best Road

Profiles of American entrepreneurs from the first half of this century are portraits worth repainting. More concerned with making beans than counting them, they preferred the whir of machinery to the boring hum of the front office. They were tinkerers, shirt-sleeve individuals who depended on sheer will and muscle to shape steel. On the marketing side, they directed that same determination into the successful selling of their products. Through it all, they made the hard decisions, chose the tough routes, and never looked back.

I was weaned on stories of famed engineers such as Charles Kettering, whose research led to commercially successful breakthroughs, including ethyl gasoline and the electronic ignition for automobiles. I was always impressed with the dogged determination and the "can-do" attitude that he and all those early giants displayed. Those of us who strive each day to carve out an existence through manufacturing have surely drawn upon such inspiration at critical junctures in our companies' lives.

Such a time emerged about five years ago for Rotor Clip Co., where I am president and CEO. We had been holding our position as a low-cost, quality supplier of retaining rings, the metal-stamped fasteners used in the automotive and other assembly-line industries. It would have been easy to maintain our traditional production and selling techniques, but business was clearly changing, and the implications of such change could not be ignored.

The area that needed the most updating was quality control. By this time, Japanese manufacturers' success with such techniques as statistical process control - or SPC - was well-documented. SPC is a statistical approach to monitoring a process with the use of graphs so that subtle changes can be detected and adjustments can be made before an unsatisfactory part is produced. This is in contrast to the former concept of quality control, which relied on inspection of parts after they were produced - when it was too late to make any meaningful adjustment to the process.

I asked myself, should I make the investment in time, training, and equipment to enhance our quality-assurance operation, or should I leave well enough alone? Even more than the dollar investment, could I realistically expect my employees to wholly embrace such change?

I decided to take the hard road; I instituted statistical analysis and quality controls. Fortunately, the benefits have been enormous. Today, Rotor Clip has one of the most modern in-process quality-assurance programs of any manufacturer in the retaining-ring industry.

Supervisors, managers, and employees have responded positively, joining together in a continuous effort to make this program work. To date, Rotor Clip's quality-assurance program has received a General Motors "Mark of Excellence" flag and plaque for our outstanding performance in the "Targets for Excellence" survey conducted for three days at our plant last year. We are one of only about 100 GM suppliers to receive this distinction.

We also hold three Ford Motor Co. Q1 awards (named for Ford's "Quality is Job 1" program) and a "Quality Excellence" award from Chrysler Corp.

Another critical concern was the disposition of profits. Planning for the long term requires investment in equipment, personnel, and facilities, and that means heavy outlays of cash. Before making such an investment, I asked myself if it would pay off, or would it be better to play it safe and not plan too far ahead?

Again I thought the hard road - investing both personnel and dollars in the company's long-term future - offered the greater hope of success. Several years ago, I updated our engineering department by installing the latest CAD/CAM equipment for each of our engineers. It was a heavy investment for us at that time, but the benefits have more than paid for the initial outlay. Now, we can respond to the tooling needs of our customers more quickly and produce dies and punches more accurately than ever before.

Later this year, we will officially open our new 44,000-square-foot addition, which was financed from a percentage of Rotor Clip's annual profits. Work on the building has caused me more sleepless nights than I care to recall, but the new space will increase our production capacity and enable us to perfect the processes we now use to make retaining rings. We will also be fully prepared to handle our customers' future requirements. In this context, I view the decision to invest profits in this manner as a sound one.

Like my industrial predecessors, I am an "old-line" capitalist interested in the making and selling of a product. I believe in constant improvement and a shirt-sleeve approach to the business components of manufacturing. Some people may argue that such thinking is outmoded, but I believe those qualities that were thought to be old and out-of-date are now the new and sought-after. We must rekindle this spirit if we are to remain competitive in global manufacturing.

We must choose the hard road.