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Manufacturing strategy : developments in approach and analysis

By Terry Hill


For established manufacturing nations, increased competitive pressure has\ud been the way of life since the late 1970s. For the most part however,\ud production decision making in manufacturing industry has not changed to\ud meet these new challenges. It usually takes a subordinate strategic role to\ud the marketing and finance functions with the consequence that it accepts a\ud reactive role in the corporate debate.\ud The outcome is that strategic initiatives and developments are predominantly\ud based on corporate marketing-decisions at the "front end" with\ud manufacturing being forced to react at the "back end" of the debate. Since\ud manufacturing managers come late into these discussions, it is difficult for\ud them to successfully influence corporate decisions. All too often, the result is\ud the formulation and later development of strategies which manufacturing is\ud unable to successfully support. That is not to say that this happens for want\ud of trying - strong is the work ethic in the manufacturing culture. However, if\ud the basic link between the manufacturing processes and infrastructure (ie\ud manufacturing strategy) and the market is not strategically sound, then the\ud business will suffer.\ud There are many reasons why manufacturing is typically reactive in the\ud strategic debate. One important factor is the lack of appropriate concepts and\ud language with which to explain or contribute to corporate decisions. This\ud research has been undertaken to help redress this deficiency.\ud The work began in the early 1980s. Upto that time, both the professional and\ud academic contributions to the field of manufacturing strategy principally\ud concerned statements which highlighted the problem and alerted\ud manufacturing industry as a whole to its size and potential. However, there\ud were in addition some important early pointers as to ways of overcoming the\ud inadequacy of production's contribution to strategy formulation as well as\ud some alternative approaches which firms needed to consider as ways of\ud improving their overall performance. The inability of the production\ud executive to contribute appropriate functional inputs provided the stimulus\ud to undertake this work and to endeavour to build on initial insights as a way\ud of taking forward the subject area of manufacturing strategy.\ud The core of this thesis concerns these developments. Reported here are three\ud contributions to this field of study all of which have been tested in different\ud firms and are increasingly being used by academics, consultants and\ud businesses as a way of helping to gain essential insights into what is a\ud complex problem.\ud The three facets are:\ud • Typically, corporate strategies are composites of functional statements\ud which are inadequately debated one with another in order to understand\ud and test the coherence of the approaches proposed. The result\ud is that the opportunity to fashion corporate strategies supported by\ud all the functions within a business is not adequately pursued. In\ud addition, the necessity to develop corporate strategy in this way and\ud the advantages which ensue have gone unrecognised\ud • The reactive role of manufacturing results in a lack of strategic\ud direction within this function. As a result, typical developments and\ud investments tend to take the form of operational responses undertaken\ud without strategic context. One outcome of the research is a methodology\ud which provides a way in which a business can develop a manufacturing\ud strategy which links manufacturing developments and investments\ud to the needs of its agreed markets. Two applications of this are provided\ud in Chapter 4\ud • It is most important for an industrial company to recognise that it is\ud attempting to support the inherently changing nature of its markets\ud with manufacturing investments the characteristics of which are fixed\ud in nature and will not change without further investments and developments.\ud Product profiling is a methodology for enabling companies to\ud assess the current level of match between its markets and manufacturing\ud and to recognise the extent to which decisions will effect this in the future.\ud Examples of its application illustrating different sources of mismatch\ud are given in Chapter

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