Authors: Auto Industry Must Balance Demand and Capacity to Succeed in the Future

NEW YORK, Aug. 6 /PRNewswire/ -- Last week President Obama made a widely publicized visit to Detroit to highlight the success of the government's $84 billion investment in the automobile industry.  

Most observers and analysts agree that the fortunes of American car companies are vastly improved from where they were a year ago.  However, the authors of a new book argue that it will take more than a bailout to enable companies such as General Motors and Chrysler to continue to grow and sustain profits.  It will take a new mindset.

According to Pat Durbin and Terry Doerscher, the authors of Taming Change with Portfolio Management, the path to success for the US automobile industry is to return to basic business principles of effectively linking demand and capacity through the transformation of new strategies into productive execution.

Gone are the days when American car companies could simply churn out cars and trucks even if they had to sell them at a loss.  After decades of excess capacity and lagging demand, the US automobile industry is faced with a new reality – balancing capacity and demand.  "Balancing capacity with demand is the basis to every business decision," says Durbin, the CEO of Planview, Inc. a leading supplier of portfolio management solutions. "A lot of bad things happen if leaders forget that point."

Durbin cites General Motors as an example.  GM has closed 14 of its plants, and is now operating its remaining manufacturing facilities at full capacity.  "The New GM is faced with balancing demand with their limited capacities," Durbin says.  "After years of just trying to keep plants busy, the new GM finds itself in a position that most organizations face all of the time: not enough capacity."  

Resource capacity planning is a key area of focus in Taming Change with Portfolio Management, which was published last month by Greenleaf Book Group and is represented by Planned Television Arts (www.plannedtvarts.com) .  Durbin and Doerscher have worked with hundreds of companies, and have more than 50 years of portfolio management experience between them.  In the book they share some core portfolio management principles that have proven their value time and again in actual practice.  They also focus on the comprehensive use of portfolios to manage change events, including the kind of change that the auto industry is experiencing right now.  "Change is inescapable in today's world," Durbin says.  "In many ways, change defines us.  Portfolio management tools and techniques can help mange the cycle of change."

Taming Change with Portfolio Management also places special emphasis on how to put strategies into action effectively.  "This month's issue of Harvard Business Review is all about 'The Effective Organization,' says Doercher, the Chief Process Architect for Planview.  "It highlights a key point we make in the book: that the most brilliant strategy in the world won't do any good if you can't deliver on it."

SOURCE Planned Television Arts