5.12.2008

Using Lean to Avoid Outsourcing

A lot of companies issue news releases saying how they are going to become better by implementing lean strategies. I recently ran across one such release that seemed a bit different.

Usually this type of news release says the company is trying to reduce costs, improve profits, gain a competitive edge, etc. But the latest news release from D’Addario & Company, a New York maker of music instrument accessories such as guitar strings and woodwind reeds, offers a slightly different justification.

D'Addario is undergoing the company-wide overhaul to avert outsourcing, stay competitive, and remain manufacturing in the U.S. for another 100 years… While many U.S. firms are staying profitable by outsourcing their manufacturing, D'Addario is using a Japanese system to keep manufacturing in the U.S. D'Addario CEO James D'Addario said, "Our Italian culture taught us the art of making strings for musical instruments. America taught us that even when you're on top you must strive for improvement and we want to keep improving, in the U.S., which has been good to us and has been our manufacturing home for 100 years."

Accepting the release at face value, I must say it’s nice to hear a company say its goal is to avert outsourcing.

D’Addario is working with consulting group PRIMEX and, the release says, “received a seven figure grant and job protection from New York State. According to New York State's Empire State Development Corp., ‘D'Addario’s commitment to Long Island in the face of other offers [will] preserve 700 jobs.’"

Also, D’Addario publicly stated some of its goals for the new strategy.


What to Expect at the End of Phase One by End of 2008:
* 25% Productivity improvements.
* 50% Reduction in FG (Finished Goods awaiting sales: from 50MM to 25MM) and WIP.
* 30% Less space utilization.
* 60% Quality improvement.
* 50% Reduction in cycle time.

Setting goals of this type is not unusual; including them in a news release is.

I wish them luck. We’ll see where they are at the end of the year.

2 comments:

customer care representative said...

Wow. another strategy to be added, to have a good outsourcing. though every company that specializes in outsourcing has their own different strategy to how to do it right, but what you have written is worth a try.

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