"The 100 Best Companies to Work For"

Robert Levering and Milton Moskowicz

Fortune

January 24, 2005, pp. 72-90

This yearly list (with accompanying short descriptions) is always good for some contemplation of one's own company. Here are the top 50 from this year's list:

1. Weegmans Food Markets (grocery)
2. W.L. Gore (GORE-TEX fabric)
3. Republic Bancorp (finance)
4. Genentech (biotech)
5. Xilinx (programmable chips)
6. J.M. Smucker (jam and jelly)
7. S.C. Johnson & Son (consumer products)
8. Griffin Hospital (healthcare)
9. Alston & Bird (legal services)
10. Vision Service Plan (eye-care insurance)
11. Starbucks (coffee)
12. Quicken Loans (mortgage)
13. Adobe Systems (software)
14. CDW (computer and electronics seller)
15. Container Store (organizer products)
16. SAS Institute (software)
17. Qualcomm (digital wireless communications)
18. Robert W. Baird (financial services)
19. QuikTrip (gasoline and convenience stores)
20. HomeBanc Mortgage (mortgage)
21. David Weekly Homes (homebuilder)
22. TDIndustries (heating, air conditioning, plumbing and electrical)
23. Valero Energy (oil and gasoline)
24. Network Appliance (hardware-software storage provider)
25. JM Family Enterprises (Toyota distributor)
26. American Century Investment (financial services)
27. Cisco Systems (networking systems)
28. American Cast Iron Pipe (iron and steel products)
29. Stew Leonard's (grocery)
30. Whole Foods Market (natural foods grocery)
31. Baptist Health South Florida (healthcare)
32. Arnold & Porter (legal services)
33. Amgen (biotech)
34. American Fidelity Assurance (insurance and financial services)
35. Goldman Sachs (financial services)
36. Bronson Healthcare Group (healthcare)
37. American Express (credit and financial services)
38. Timberland (apparel)
39. Pella (windows and doors)
40. National Instruments (measurement hardware and software)
41. Plante & Moran (accounting)
42. Alcon Laboratories (eyecare products)
43. Symantec (software)
44. SRA International (IT)
45. REI (recreational equipment)
46. Kimley-Horn & Associates (civil engineering and land planning)
47. Perkins Cole (legal services)
48. Memorial Health (healthcare)
49. Sterling Bank (financial services)
50. Synovus (financial services)

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"Building Deep Supplier Relationships"

Jeffrey Liker and Thomas Choi

Harvard Business Review

December 2004, pp. 104-113

A recent survey of suppliers to US automobile industry manufacturers found that Toyota and Honda were the most preferred companies to work with. Nissan was third, while Chrysler, Ford, and GM were way behind in fourth, fifth, and sixth places. Suppliers especially appreciated that Toyota and Honda were better communicators, more trustworthy, and more concerned about supplier profitability than the other manufacturers were. Most vendors have stated that Toyota and Honda are simultaneously their best and their toughest customers.

The authors of this article identify six specific steps that both Toyota and Honda have used to build great supplier relationships: All six steps are used together as a system, and the authors arrange them in a hierarchical order, since some of the steps support others. The steps are:

1. Understand how your suppliers work
   • Learn about your suppliers' businesses
   • Go and see how your suppliers work
   • Respect suppliers' capabilities
   • Commit to co-prosperity of both the supplier and your own organization
2. Turn supplier rivalry into opportunity
   • Source each component from two or three vendors
   • Create production philosophies and systems that are compatible between the two organizations
   • Transfer knowledge and maintain control by setting up joint ventures with existing suppliers
3. Supervise your suppliers
   • Core suppliers should be sent "report cards" on a monthly basis
   • Immediate and constant feedback should be provided to suppliers
   • Senior managers should be involved in solving problems
4. Develop suppliers' technical capabilities
   • Work with your suppliers to build their problem-solving skills
   • Develop a common technical language
   • Hone suppliers' innovation capabilities by use of guest engineer programs; this and other methods will help suppliers innovate in ways that will be of help to you in turn
5. Share information intensively but selectively
   • Set specific times, places, and agendas to meet for information sharing
   • Use highly specific formats to share information
   • Insist on accurate data collection
   • Share information in a systematic and structured manner
6. Conduct joint improvement activities
   • Exchange best practices with suppliers
   • Engage in kaizen projects at the home facilities of suppliers
   • Create supplier study groups to learn about the customer production system and other matters

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"Building a Successful Balanced Scorecard Program"

Peter Brewer, Stan Davis, and Tom Albright

Cost Management

January/February 2005, pp. 28-37

This article is divided into four parts:

• A discussion of how the Balanced Scorecard approach can help overcome the usual limitations of traditional control systems
• An eleven-step implementation methodology to help organizations more effectively convert their Balanced Scorecard approach to a strategically-driven set of measures
  1. Define financial goals
  2. Define the customer
  3. Define processes
  4. Define asset inputs
  5. Identify relationships between financial goals and customer value propositions
  6. Identify relationships between customer value propositions and processes that deliver value
  7. Identify relationships between processes that deliver the customer value proposition and assets used in the processes
  8. Select financial measures
  9. Select customer measures
  10. Select internal business process measures
  11. Select learning and growth measures
• An illustration of the above model using a financial institution as the example
• A discussion of considerations to keep in mind when evaluating manager performance using the Balanced Scorecard approach.

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"How Delphi Went Lean"

R. David Nelson

Supply Chain Management Review

November/December 2004, pp. 32-37

Delphi Corporation was formed from the parts-making operations of General Motors in 1991. It was incorporated in 1998. Delphi Corporation's lean manufacturing initiative (Delphi Manufacturing System, modeled after the Toyota Production System) was introduced in 1996, and Delphi has been one of the most decorated Lean enterprises in the US. Its plants have won a total of 20 Shingo Prizes for Manufacturing Excellence through the year 2004, as well as numerous other awards from its customers.

In 2002, Delphi determined that it needed to improve its supply management organization. A set of nine integrated supply management strategies was developed:

1. Strategic sourcing
2. Supplier development
3. Systems infrastructure
4. People development
5. Supplier relationships
6. Cost management
7. New model launch
8. Quality improvement
9. Communication

This article discusses strategic sourcing, cost management, and supplier development.

Strategic Sourcing

Prior to 2002, Delphi had a global supply base of nearly 7,000 suppliers. This has been reduced to 4,000 current suppliers, and they expect further reductions to about 1,000 suppliers in the future. Delphi envisions that components with high value and complexity "ultimately will be sourced to about 100 strategic suppliers with whom we will have close and deep relationships." About 150 to 200 near-core suppliers will handle low value/high complexity items. Another 150 to 200 niche suppliers will provide unique products. Low value/low complexity products will be sourced using more conventional methods to about 400-500 suppliers.

Cost Management

Delphi has hired former Toyota and Honda purchasing managers. The focus is on "eliminating or reducing costs, not negotiating prices." In addition, Delphi has "put in place cost management leaders who work with Delphi buyers, lean supplier development managers, and suppliers in understanding processes. They document opportunities for eliminating waste in the supply chain."

Lean Supplier Development

Delphi currently has 57 supplier development engineers on staff. The lean supplier development process begins with a meeting between senior managers from Delphi and the top management of the supplier company. After leadership's approval, joint expectations are established regarding resources, benefit sharing, etc. Once the supplier development activities are initiated, suppliers often experience improvements such as productivity increases of 30-60 percent and first-time quality improvements of 10-45 percent.

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"The Role of Psychological Well-Being in Job Performance: A Fresh look at an Age-Old Quest"

Thomas Wright and Russell Cropanzano

Organizational Dynamics

33(4), pp. 338-351

Though many researchers have attempted to investigate the relationship between "happiness" and job performance, the results have not been impressive in supporting this link. The authors of this article argue that the reason for these findings primarily lies with the fact that employee "happiness" has traditionally been operationalized as "job satisfaction." "Happiness" is now starting to be conceptualized more broadly as psychological well-being (PWB) of employees. More precisely, the authors describe happiness/psychological well being as "a subjective and global judgment that one is experiencing a good deal of positive emotion and relatively little negative emotion." Using this definition, measures of psychological well being are consistently and positively related to a number of different job performance measures in the studies reviewed in this article.

The authors present three different possible approaches to building a workforce that is "happier"

• Select employees who are already "happy" (though the authors point out that this could make the other candidates even more depressed and unemployable!)
• Train employees to be happier through a number of cognitive restructuring stress-management techniques
• Through situational engineering, change the environment so that it is more conducive to psychological well-being

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Tools to Assist in Building Deep Supplier Relationships

John McNeil, GP Deltapoint
 

Liker and Choi highlight the value of intensifying the relationship with suppliers in their article. And Nelson provides a specific case study on Delphi in his article. GP Deltapoint has enjoyed success using a trio of tools to help in this kind of work.

Quality Function Deployment (QFD) provides an actionable link between customer needs and internal processes. This tool is often deployed to help you deepen the relationship with your own customers, but it works equally as well as an aid when working with suppliers. Your needs are translated into specific product and service capabilities at your supplier which can in turn be translated into internal process capabilities there. This numerical linking is similar to the "transfer function" concept in Design for Six Sigma (DFSS).

Value Stream Mapping is a method for highlighting waste in any value stream, but particularly between suppliers and their customers. VSM workshops that extend over two or three days can be enormous aids in uncovering issues, misunderstandings and sources of wasted time and effort. At the end of such workshops it is not unusual to have cut processing time by more than half and improved process throughput by more than 100%. Remember that processes involving paper and white collar work are just as susceptible to this kind of improvement as are product and parts flows.

Rapid Improvement Workshops are similar in function to Value Stream Mapping exercises. They are often called Kaizen improvement as mentioned in the last point of the Liker article. Both Kaizen and Value Stream Mapping drive waste out of systems but VSM relies more on the visualization of a process (and is somewhat akin to Brown-Paper exercises in that regard). In practice too, VSM follow-up and closure may occur over one to three months. Rapid Improvement typically incorporates analysis (that may have been conducted in advance of a workshop); almost to the degree that a Six Sigma project would incorporate. Also, in practice, a Rapid Improvement workshop drives heavily for actual change in a process in real time over three to five intense days.

No matter which tool you apply, the results will be less waste and improved value; measured from the standpoint of customers.

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