Leaders Look Inside For The Future

After three years of naming the IW 50 Best Manufacturing Companies based on market and manufacturing metrics, IndustryWeek decided to dig a little deeper into the leading minds of those companies that rose to the top.

To do so, we asked executives at some of the 50 companies to craft an essay in one of five areas that IndustryWeek deemed important to the future of manufacturing: infrastructure, globalization, supply chain, leadership and sustainability.

Our goal was to find out how these companies have survived and thrived despite the difficulties that plagued most companies the past five years.

For example, the topic and practice of sustainable manufacturing ensures businesses will be in existence in the future -- and that the footprints the companies leave on the earth are not intrusive. Many of the top companies are working to reduce CO² emissions, to add more recyclable content to their products and to reduce their energy consumption.

Indeed, Winnebago's annual report states, "The company must pursue conduct in a manner that is socially responsible and that commands respect for its integrity and for its positive contributions to society."

Additionally, the Forest City, Iowa-based manufacturer's Winnebago Industries Foundation provides assistance to organizations that contribute to the well-being of the company's surrounding communities.

In terms of infrastructure, the 21st century delivers many challenges to manufacturers -- challenges that have never before been addressed because the challenges never existed. The way companies do business today is real-time. Companies need to upgrade their IT systems. Companies are asking about transportation issues -- can the existing roads and ports handle globalized economies? Is the energy grid reliable?

Add to that what Ecolab considers its most important infrastructure asset -- employees.

The St. Paul, Minn.-based manufacturer realizes that many companies base the success of infrastructure on state-of-the-art facilities or business processes and systems. But in order to make those elements work well, employees need to be engaged and appreciated.

With 22,000 employees, Ecolab is prepared to meet the service needs of its customers.

As for the supply chain, that seems to be on everyone's agenda. Is it lean enough? Is it robust enough? What happens if a link in the chain breaks? No matter how good you are, you are only as strong as your weakest link -- thus the importance of keeping supply-chain issues on the front burners.

18 industries are represented in the IW 50 Best Manufacturing Companies list for 2005.Apparel 3 Beverages 2 Chemicals 6 Communications Equipment 1 Computers & Other Electronic Products 4 Fabricated Metal Products 1 Food 3 Furniture & Fixtures 1 Leather Products 1 Machinery 3 Motor Vehicle Parts 1 Motor Vehicles 4 Petroleum & Coal Products 9 Pharmaceuticals 1 Primary Metals 1 Publishing & Printing 7 Railcars, Ships, & Other Trans. Equip. 1 Wood Products 1 For Dell, the company that epitomizes a lean supply chain structured around its customers, the primary focus with suppliers is continuity of supply. The company also analyzes operational performance on an hourly basis and aligns its supply chain, manufacturing and logistics operations to meet customers' needs.

Deluxe Corp., the Minnesota-based paper check manufacturer, also bases its supply-chain success on inventory levels.

Adapting to market changes -- fewer and fewer paper checks are being used to pay bills -- Deluxe converted the structure of its supply chain from consumption/replenishment to demand planning.

Looking into leadership, strong leaders are good -- but strong leaders that can adapt to change while remaining consistent within their leadership style are world class.

Whether it is a family business that has seen only one surname on the CEOs door or a corporation that has hosted dozens of c-level executives, leadership is what makes or breaks a manufacturer. Indeed, poor leadership has put many a manufacturer out of business.

According to Procter & Gamble, the best leaders follow a consistent gameplan for facilitating successful change within their organizations.

The Cincinnati-based company's game plan includes a clear vision, the right infrastructure, engaging the organization and concentrating on consumer interests.

To round out the topics for our soothsayers, we asked about globalization. This topic can hardly be ignored considering our economy is truly a global economy that no longer knows borders and boundaries.

Regardless of company headquarters, every manufacturer is touched by globalization. Whether it is a part from China or outsourced services from India, companies can no longer function in a bubble.

With this in mind, Valassis CEO Al Schultz takes on what globalization means for the United States -- even rhetorically asking Alan Greenspan, "How will the U.S. economy survive after all of our middle-income jobs have been outsourced to Asia and we no longer manufacture much of anything?"

Not a naysayer, Shultz suggests education is the key to leveling the playing field.

While not all 50 companies participated in the project, we did receive valuable content from those that did.

We hope that you will find inspiration as well as insight in the following essays. And who knows, maybe next year your leaders will be asked to commit to paper what your company sees for the future.

Essay Sections

Follow The Leader: How companies are led translates into how well they perform.
Questioning Globalization: Competition on a global scale is squeezing manufacturers dry.
Securing A Stellar Supply Chain: Only as strong as its weakest link, the supply chain can make or break manufacturers.
Analyzing Infrastructure: Support behind infrastructure is where the focus should lie.
Sustaining The Future: How companies manage resources today determines what is to come tomorrow.
A Look Inside The IW 50
The formula for naming the IW 50 Best Manufacturing Companies was based on six categories: profit margin, sales turnover, inventory turns, revenue growth, return on assets and return on equity. While each company on the IW 50 list is a stellar performer, there are companies that rise above. See more on the IW 50 methodology here. Below you find the Top 10 performers in each category. You can also view the IW 500 list (where the top 50 originated) and its methodology. Double-Digit Performance (%)