Change is not something that occurs often in the golf car industry and when it does, you generally have to be a real insider to notice it. But when the people at Club Car realized that they could take incremental improvements only so far, they decided to get some fresh thinking from Detroit and completely change their product and process.

**********

Phillip J. Tralies, president and CEO of Club Car, Inc., describes the situation in the golf car industry as being similar to that of Detroit. There is a Big Three: Club Car (parent company: Ingersoll-Rand), E-Z-Go (parent company: Textron), and Yamaha. Like the automotive Big Three, there is geographic proximity: Club Car and E-Z-Go are both in Augusta, Georgia; Yamaha is further away, in Peachtree City, but still in Georgia. While this certainly isn’t Detroit/Dearborn/Auburn Hills, there is still a similarity in the comparative close grouping of the firms.

But there are distinct differences, too. For one thing, the golf car Big Three are actually the entire industry’s BIG Three: Tralies estimates that the three companies “represent 95% of all golf cars built and sold in the world.” That’s right: world. Of that 95%, E-Z-Go and Club Car account for 42% to 44%–each. Yamaha has the remainder. The five percent is handled by a variety of smaller companies. Detroit’s Big Three could only wish that they had such a grip on the market.

But like Detroit, there are some issues that need to be grappled with as regards changes in the market. Tralies points out that in the early 1990s there was a big boom in the development of golf courses. Real estate developers saw great opportunity to create communities attached to golf courses. Tralies notes, however, that by about 1995 the number of people who where taking up golf diminished, but the ardor of those developers went unabated. So there is an issue of the number of courses outstripping demand. In the golf car business, the primary customers are the courses, not individuals. This makes the market, however, different than what Detroit faces: instead of a multitude of individuals who need to be sold on the latest equipment, in the golf car industry it is far different. “If you took an average football stadium and put all of the golf car decision makers in it,” Tralies says, “it would look empty.”

There is another big difference between the golf car industry and the auto industry. It is a technological difference. Dave Hardy, who was executive program director, Special Projects, at Club Car, recounts, “One of the first jobs that I had when I came here in 1978 was designing the DS model. We introduced that model in 1980.” You can still buy the DS model. In fact, up until 2004, the DS model was the Club Car model. Hardy acknowledges that during the past 20 years there were a number of changes made to the DS model. For example, the body material started out fiberglass, then moved to SMC, then to a painted TPO. The basic styling stayed the same. The powertrain was redesigned. “They were evolutionary changes. It’s not that some of them weren’t dramatic improvements to the product, though.” Still, as Hank Sanders, who was vice president of Special Projects, points out, there is only so far you can go in terms of making product or process improvements when there is a fixed design. The structure becomes a limiting factor. As the golf car industry is as competitive as any, they were always looking for the ways to improve performance and to reduce production costs. “At some point you realize that if you want to make dramatic change, you have to change what you’re doing,” says Hardy.

There is a problem with the notion of dramatic change. Especially in the golf car industry. That’s because of the fleet sales (which are often leases, not direct sales). The typical course changes over about a third or so of its cars on an annual basis. Consequently, the status quo is comfortable from the points of view of maintenance (i.e., keeping things largely the same reduces the amount of difficulty for those who have to keep the cars running) and of the customers: having a fleet of vehicles that look the same means that one car is generally as good as another.

There are some other considerations to take into account. For one, Club Car is a build-to-order operation. So if they don’t have plenty of courses purchasing vehicles, they’ve got a serious problem. While they do build a variety of custom vehicles in their facility–”limousine-style” vehicles for the Japan market; trash haulers for Disney–the golf car is the primary product and so it has to be competitive. Consider an auto company dependent on a single model. What’s the likelihood that with even a modicum of success they’d ever modify that model?

But at Club Car they were up against the issue of making improvements beyond the incremental. Sanders had attended some seminars and learned about things like “lean design” and “flow manufacturing.” And he concluded that they were the sorts of things that, although becoming part of the process in places like Detroit, needed to come to the golf car industry. So he began to talk up the need for fundamental change at Club Car, the need to create something that was not restricted by what had come before, but which would allow the implementation of unencumbered thinking and of best practices. And he began to get converts. And eventually what was known as the “Cleansheet” project was born.