State chamber chief talks manufacturing; says quality and innovation key for success

Randy Zook is hopeful that job losses in Arkansas’ manufacturing sector will soon abate, but said there are too many complex factors to predict with certainty a timeframe for improvements in the sector.

Zook, president and CEO of the Arkansas Chamber of Commerce and Associated Industries of Arkansas, spoke Tuesday morning (Aug. 4) at the University of Arkansas at Fort Smith as part of the 2009 Challenge Seminar. Zook told The City Wire that recent national reports suggest business inventories are almost depleted.

“Manufacturers are going to gear up when the inventories see those lows. … So I’d say we’re close (to the end of the national recession),” Zook explained. “We’re certainly near the bottom, and I’m seeing more reason for optimism in many manufacturing sectors.”

On Monday, the Institute for Supply Management reported a continued increase in a national index that measures U.S. manufacturing activity. The July overall manufacturing index was 48.9%. A number above 50 indicates growth.

“The decline in manufacturing was slower in July when compared to June, as the more leading components of the PMI — the New Orders and Production Indexes — rose significantly above 50 percent, thus setting an expectation for future growth in the sector,” Norbert Ore, chair of the Institute for Supply Management Manufacturing Business Survey Committee, said in the statement.

Arkansas had an estimated 162,900 manufacturing jobs as of June 2009, down 10.9% from the 183,000 manufacturing jobs in July 2008. Manufacturing employment in the Fort Smith metro area has dipped 10.3% in the past 12 months. Fort Smith regional manufacturing jobs totaled an estimated 22,600 in June, down from 25,200 in June 2008.

QUALITY, INNOVATION
Zook’s role in the Tuesday seminar was to talk about the importance of continuous quality improvement to about 25 industry representatives from the Fort Smith and Northwest Arkansas areas. According to Zook’s presentation, quality and innovation are two key ways Arkansas manufacturers and businesses can set themselves apart from other players in the highly-competitive global market.

Zook said Pittsburg, Texas-based Pilgrim’s Pride — once the nation’s largest poultry processor before recently forced to file for bankruptcy reorganization — and General Motors are examples that companies of all sizes should remain focused on quality and innovation that is effective and efficient.

One example of staying focused on quality is to provide front-line employees a safe and convenient way to communicate their ideas on how to improve processes and/or products. Zook said supervisors may sometimes need to begin small quality improvement processes without the approval of the top bosses.

“When that (time and money savings) begins to happen, they (CEOs/bosses) will notice. And once you get them by the wallet, their hearts and minds will surely follow,” said Zook, who was for 20 years the president/CEO of Atlanta-based Atlantic Envelope Company that had 1,500 employees and seven manufacturing plants.

Zook cited Fort Smith-based Baldor Electric Co. as a national example of a company that has stayed focused on quality. He said Baldor’s quality programs are decades old, and the company talked about the importance of quality and value “long before this kind of thing was cool.”

A “virtuous circle” will follow a consistent and broad focus on quality and innovation, Zook said. He said the circle starts with improved quality which leads to more satisfied customers, increased sales, increased profits, more satisfied employees and coming back full circle to improved quality.