IRVING, TEXAS —
Every other week, aftermarketNews.com offers an interview with a high-profile individual in the automotive aftermarket. We give executives free rein to express their views on anything from the state of their corporations to recent legislative news to future trends in their niche markets. Here you see what matters to the newsmakers themselves.
Our latest edition of “Executive Interview” features Jim Taylor, CEO of the Thomas Group. Taylor joined the Thomas Group in 2001 as vice president and CFO. From 1997 to 2001, Taylor served as president of the Chancellor Group, a Dallas, Texas, management consulting firm, where he assisted companies in restructuring, raising funds and completing initial public offerings. From 1995 to 1997, he served as vice president for Overhill Farms Corp. and led in the creation of its food group division. From 1986 to 1993, Taylor served as President for Elcon Industries, a privately held manufacturer/distribution of aftermarket automotive accessories. Taylor also was a partner with Coopers & Lybrand (currently PriceWaterhouseCoopers) in both the Los Angeles and Dallas offices. Taylor is a licensed CPA and a member of Financial Executive Institute and the Financial Executive Network Group.
Join us as Taylor tells us more about the Thomas Group culture and how it works for its clients.
Q: First off, please give our readers a brief history of Thomas Group and what the company does.
A: Thomas Group Inc. is a public company. We have about 30 years of experience helping clients improve their business results. We help clients execute their strategy much faster than they could on their own.
We do this through a process of linking or connecting a company’s needs and capabilities with its customer’s needs. We efficiently link the company’s operations with the products and services needed by the customer, bringing high quality at the lowest cost possible. That’s our main goal. This linkage results in a faster time to market and improved productivity.
We use our own tools as well as the tools of other organizations, such as Six Sigma and LEAN. Many of our senior executives have previous experience in these areas, with other companies. We are really businessmen and women who have turned to consulting as a career rather than as full-time career consultants. We have the ability to say, “been there, done that.” We can relate to the CEO or CFO on the other side and the dilemmas he or she is facing, because we’ve lived it.
Q: The company began in the microchip industry. What led to the decision to expand into other markets?
A: We found out quickly that improving processes by connecting functions and customer focus together was not industry-specific. Our ability to identify and replicate best practices across industries is one of the key values that we at Thomas Group deliver to a client.
Our best practices metrics are only academic until they are put into practice. We are not just ‘theory’ people, we actually implement and put into practice what we say we can do. We’re not just going to write a report. We are going to deliver, and be there, working day-to-day with management until the task is accomplished.
For example, we have a methodology to improve processes that we call “First Pass Yield.” “First Pass Yield” enables companies to do things right the first time. We link functions or activities together that previously weren’t. When we did this at Saab for example, they called it “First Time Right,” which is another way of explaining it. With our help, Saab subsequently achieved very high vehicle quality and thus improved their market share.
We also helped a company called JDH – an importer/ distributor. We helped them get their invoices right the very first time. “First Pass Yield” helps companies drive cost and cycle time out of their productions. Invoicing correctly the first time while improving quality significantly reduced their Days Outstanding on Accounts Receivable and improved their cash flow.
Q: According to your Web site, since 1978 Thomas Group has focused on “helping clients improve their bottom-line results.” The nature of business has changed greatly over the past three decades. Was the Thomas Group (and its processes) able to adapt easily to this change, or did you have to re-think the way you did business as well?
A: We continue to update and refine our value proposition and how we solve problems with clients and management, but our basics remain just that — basics. The tools and technology that Thomas Group uses today have changed – as I mentioned, Six Sigma, LEAN, Kazaan, even software applications have changed.
But our experience tells us that success probably falls into four areas:
knowing which tools to use;
knowing when to use them;
understanding that implementation affects culture (and we must take that into account for any tool to be effective); and
aligning priorities and focusing on a manageable number.
In other words, we need to do something that is realistic and achievable, then, insure that the company is connected to implementation in order to keep both a happy customer and a happy employee.
Q: Your “Process Value Management” approach, described as “more a way of life than simply a way of improving the performance of individual performances,” sounds like quite a transformative process for your clients. Tell us more about this.
A: PVM, or Process Value Management, is really the connectivity of all the activities across functions. The key to making this work is, insuring that every individual in that process sees his or her impact on the big picture. If they don’t understand this, the organization is wasting time and money and not getting the best from its workforce.
We also establish the correct metrics to measure progress and to drive the organization toward the desired results – we call this a leading indicator, as opposed to a trailing indicator. You need to put metrics on the overall process to guide management so that they can predict future outcomes rather than just measure historic behavior. We ask: “What drives a company?” and “What are the indicators to know that I’m driving in the right direction?” as opposed to arriving at a place and finding out “I’m not at the right place.” “How do I know that before it happens?” These are the metrics we put in place that allow management to do that.
Q: Speaking of clientele, your client base runs the gamut – from aerospace and government to consumer products. You have experience working with automotive businesses as well, including the likes of Bosch, GM, Audi, you mentioned Saab earlier. Has your experience with automotive companies been mostly on the OE side? What, from your experience with OEMs and other industries, can you offer aftermarket businesses?
A: We’ve worked with the aftermarket, the OEMs, and the Tier 1 suppliers. We have worked across the automotive industry, including everything from a large GM manufacturer and stamping plants to warranty programs and retail operations. Again, improving processes, cutting costs, and connecting functions to enable a client to better serve its customers crosses all industry lines.
About half of our historical revenue has come out of the automotive industry – the OE and the Tier 1 suppliers. We have worked with aftermarket companies, as you mentioned, Bosch, but we’ve also worked with companies like Federal Mogul and Pep Boys. We’ve also worked with and improved some large distribution companies, such as W. W. Granger. We can bring this experience to aftermarket distributors and to the retail sector.
Q: Thomas Group sponsored the popular “Sunrise Seminars” which took place during AAPEX 2003 in Vegas. What did the company find valuable about the experience? What drew you to it?
A: We really believe strongly in serving the automotive aftermarket and the automotive industry in general. We work across industry lines and it gives us a great vantage point of seeing the ‘best of the best.’
The seminars gave us the opportunity to share that with the aftermarket, and again, this is a key benefit of our methodology of working across industries. Sharing ideas from one industry stimulates creative thought. Just as we see in many aftermarket companies that recruit senior executives from outside their industry, that same kind of concept. Sponsoring the Sunrise Seminars is one way that Thomas Group can contribute to the aftermarket through our participation in AAIA and AWDA.
Will you sponsor them again in 2004?
A: Yes, we are involved with the seminars again this year and hope to make them even better.
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