An Industry Week Leadership in Manufacturing article, Rethinking Management for the 21st Century, nicely penned by Jack Buffington, really resonated with me.  I hope you will have a similar reaction.

Buffington’s premise is that America’s industrial base was originally grounded upon the definition of “classical management”.  He defines that term as: “managers who devised strategies of creating business value through utilizing technological advances and matching them with an improved treatment of employees (better conditions and higher wages) to create real productivity improvements.” Some of the companies that he cites include the original Ford Motor Company, the renewal of Nucor in steel manufacturing, the productivity improvements of MillerCoors Brewing Company, and the success of Costco Wholesale in retail.  Buffington further notes that today’s approach to management thinking has gotten us sideways, more towards achieving results, quarter by quarter, through quick-hit financial engineering techniques.

For me, Buffington hit the nail squarely on the head.  When reading this article, I thought of some examples of contrasts.  In autos there is Ford, and then there is Chrysler, who has endured multiple episodes of management ownership and supply chain re-structuring, and is now attempting to once again renew itself.  In brewing, there is MillerCoors, and then there is ABInBev, which is now applying financial engineering to the supply chain and production operations of the former Anheuser Busch. In retail, there is Costco, and an unfortunate litany of now absent players such as Circuit City, most of which succumbed to a lost focus on the consumer, as well as financial engineering.  I’m sure Supply Chain Matters readers can add more examples as well.

Too often in the current era, in normal times, and now the after effects of financial crisis, such as where we’ve been over the past long months, it’s been the pressure of Wall Street that has neutered “classical management”.  This is the same Wall Street culture that brought with it the financial engineering of false credit that led to the potential meltdown of the entire global financial system.

Yes, it is indeed time for all of us in the U.S. to resolve to determine if “classical management’ and a foundation of an economy that is anchored in productivity excellence in manufacturing will be the norm or the exception.

 A thank you and shout out to Jack Buffington for reminding all of us of what we all need to think about.

 Bob Ferrari