File Name: manufacturing strategy text and cases .zip
Download PDF Read online. In many industrial companies, strategic developments are predominantly based on corporate marketing decisions with manufacturing being forced to react to these at the back end of the process. In "Manufacturing Strategy", Terry Hill sets out to show how decisions over manufacturing should form part of the strategic direction of the company as a whole.
A tool for evaluating the congruence between the manufacturing strategies and the existing manufacturing system has been described by Professor John Miltenburg The purpose of this paper is to show one example of using this tool for a supply chain, i. Box P. Skinner, , showed that manufacturing had been put aside in many companies and thus had lost its power to influence the company development. Japanese organizations, especially Toyota, have however been found to be very good in using manufacturing to gain competitive advantages and consequently also been the e.
Hayes and Wheelwright, ; Hill, ; Monden, ; Schonberger, In this connection, the concept of world-class has been discussed e.
Hayes and Wheelwright, ; Hall, ; Schonberger, If a company is going to be capable of using its operations in a competitive way, there must be a clear idea of how the operations should support the business.
In this work, strategies, which aim a few years into the future, are necessary e. Skinner, ; Hill, Often a company does not manufacture the entire product by themselves, but they involve sub suppliers. In order to coordinate the activities within the supply chain there must be a shared view of the competitive situation.
It is not necessary that the production systems are identical, they have after all complementary competences, but they should match. The purpose of this study is to try an analysis model at two companies of a supply chain and see if the model is practicable and if there is a match. First a number of decision areas are studied regarding the capabilities linked to a scale presented by Miltenburg, This scale was first presented by Hayes and Wheelwright, See Figure 1 for the decision areas and their main characteristics and Figure 2 for the scale characteristics.
Developed Modern soft and hard technologies externally. Reduce cost. Large, infrequent Focused. Frequent, incremental changes. Capital appropriation driven changes Improve capabilities Capacity Slack to manage variation No slack. Production smoothing. Short set-up times. Flexible work-force Vertical integration Large number of suppliers Small numbers of suppliers Short-term contracts Partnership, full responsibility Lowest cost Critical capabilities Quality management Quality control Quality assurance Human resources Employees are an expense.
Employees are an investment. Human robots Multi skilled. Problem identification and solving Organization Hierarchical, centralized. Cost Flat, decentralized.
Competitive structure and controls accounting driven performance performance measures. Line is very measures. Staff is very important important. Production planning Centralized, complex. Detailed Decentralized, simple. Aggregate and control monitoring of resource usage. Capability levels for the different decision areas Miltenburg, The further developed analysis model is shown in Figure 3. The lower left shows the five manufacturing systems, ranging from Job Shop to Continuous Flow.
The top matrix is used for analyzing the competitive situation of the company and future targets. This could be called the analysis of the manufacturing strategy. The lower right, finally, illustrates the support from each of the different manufacturing systems for the different competitive factors.
Figure 3. The company is part of a larger company. The visited division is one of four divisions of a unit. The division of this study has employees. The manufacturing is entirely based upon customer orders and production does not start prior to order. Their customers are retailers and sales companies. Some of the subcontractors are involved in the customer orders production and deliver components specified individually for each order. The company is divided into three product lines. The base organization is process oriented.
The major part of the production is assembly, which takes place along operator paced assembly lines. Most of the equipment is general purpose. The study at company A resulted in a competitive analysis according to Figure 4.
Some of the factors have several attributes. Delivery includes aspects such as delivery precision and delivery time.
Finally, one important attribute of flexibility is the ability to handle different sizes of the product, a number of variants and varying volumes.
The delivery precision, the product performance, and quality are considered to be qualifiers. They win orders on flexibility, brand name, and price. The performed analysis in Company A indicates a quite good congruence between production system and manufacturing strategy.
However, some further support is identified in delivery and cost and some suggestions were given on activities to improve the situation. Figure 4. The competitive analysis performed at Company A. The manufacturing system is mainly an operator-paced line flow, but parts of the system are more or less automated, see Figure 5.
Figure 5. The current production system of Company A The picture of the manufacturing capabilities, see Figure 6, shows that the company is among the best in the business. There is however one exception. The company does not have total control over its processes and to compensate this they add a two days slack in the planning system.
This is of course not optimal, since this causes a lower utilization of the total capacity. The company considers however the delivery precision to be very important to the customer. Figure 6. The company has employees and is a key supplier to Company A, i.
They are even more interesting since they get the customers orders, through EDI, directly into their planning system. All production is made entirely to customers order and the company has two main groups of products. Within each product group, the company can manufacture a large variety of customized variants of the base design.
The remaining part is sold to the other Nordic countries. The production is considered to be process oriented. The competitive analysis is presented in Figure 7.
Figure 7. Competitive analysis of Company B. QQ indicates a very important qualifier, which could cause a loss of orders if not met. The analysis of the current production system, see Figure 8, indicates that the company mainly runs an operator-paced line flow, but the number of different products is very high with extremely low volumes.
This is made possible through a very well working planning system and high production capabilities. Figure 8. The current production system of Company B The analysis of the manufacturing capabilities, see Figure 9, of Company B gives a similar picture as Company A.
The reason claims to be that they have very good control over their processes. The low rejection rate indicates the same thing. Figure 9. Manufacturing capabilities of Company B 6 Conclusions Both companies show that their respective production system is the most supportive for their competitive situations.
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