Lessons from the ‘made in Switzerland’ study: What makes a world-class manufacturer?

Many executives are currently striving to develop world-class manufacturing operations to ensure that they remain competitive in increasingly global markets. To do this, they are adopting a range of practices, from organisational changes such as empowerment and teamwork to the use of techniques such as pull production. Their goal is to substantially improve performance: faster cycle times, reduced manufacturing costs and greater customer satisfaction.The question of how far companies have moved towards world-class manufacturing is at the heart of the ‘Made in Switzerland’ project, a major benchmarking study of Swiss manufacturing practice and performance. The study was carried out in 1995 by IMD faculty and researchers working with consultants from IBM Switzerland. It is part of the internationally-based ‘Made in Europe’ project comprising similar studies in the UK, Germany, The Netherlands and Finland.The central hypothesis of the studies is that the adoption of best practice leads to high performance. The objective is to establish a benchmarking database for participating manufacturers around the world. The studies, which are highly structured, examine six areas of manufacturing practice and performance in detail and assess the relationship between them at individual plants. The areas covered in the study are quality, organisation and culture, concurrent engineering, logistics, lean production and manufacturing systems.Plants in each country are grouped according to their position on the practice and performance indices and then studied in order to pinpoint the issues and challenges facing the manufacturers within that group. Less than three per cent of the 800 plants currently on the ‘Made in Europe’ database are considered ‘world-class’. Yet for manufacturers striving to reach this level of performance, this small minority can provide some valuable insights for the way ahead.This article discusses many of the issues raised by the analysis described above, with particular reference to the ‘Made in Switzerland’ study. In the first section, it looks at the key lessons arising from the Swiss study and what insights these can provide for manufacturers, not only in the Swiss market, but across Europe. In the second section, it looks at how the study can be used for benchmarking and provides manufacturers with some general recommendations to help them focus their improvements and move closer to becoming world-class.