Manufacturing - Missing link in Corporate Strategy

Case 1 – Manufacturing – Missing link in corporate strategy

My topic for this article would be - Why daily manufacturing decision making process is not a part of corporate strategy, & is left to shop floor workers to decide on their own.

What is the perceived function of any manufacturing process (what manufacturing MUST ALWAYS achieve?) – HIGH EFFIECIENY and LOW COST

Whether the above is fulfilling the real objective behind production of the product (GOAL INCONGRUENCE)?

Example -

Company	Case Name	Company objective	Manufacturing objective
A	Washer Dryer Case	Market test should have been done before launch of new product	LOW COST of manufacturing made company push product in the market, irrespective whether product will sell
B	Electronic gear	High reliability ……………..(1) – Skilled technology and worker at all locations – Decentralized (includes after sales service) Rapid Introduction……….(2) – Non nearness to the market due to centralized manufacturing Low Cost………………………(3)- May not have been achieved due to high transportation / logistics cost.	Centralized Manufacturing was adopted - Economies of scale for LOW COST; have one system throughout company
C	Plastic molding resin	Must cater to existing old buyers, irrespective of increased demand	COST REDUCTION focus forces company not to increase capacity / outsource manufacturing to 3rd party – Long term buyers lost

Reason of above is clear – Clarity in final objective of management and worker is different. Following paragraph will see why it happens.

Why do corporate hesitate to participate in manufacturing process decision making (scheduling, designing of process) –

1. Seen as very TECHNICAL job and requires very different skill set (which a production / industrial engineer has – Mastery in Industrial Engineering like Work study, time study & Quantitative techniques)

2. LOW LEVEL DECISION MAKING – Decision at various manufacturing stages seems dirty (oil, grease), repetitive, boring, and of low importance (since, the old process produced product, why a change is needed)

3. ROUTINE ACTIVITY – Manufacturing is seen as routine and productive changes with big impact can only be done by R&D and not by regular shop floor activity.

4. INTRODUCTION OF SOFTWARE / COMPUTER – Management perceives that software will automate and solve the problem, but critical decision like scheduling of manufacturing keeping the overall objective in mind needs to be done by participation of top management. (Company B)

5. PRODUCTION INVOLVES TRADE-OFFS – Customer might be willing to pay a higher price where a high reliability product is required like well polished & planed surface wooden furniture. Hence, low cost or high efficiency might not be the requirement all the time.

6. APART FROM COST, THERE ARE OTHER FACTORS to be considered before manufacturing– Lowest total cost + Time taken to introduce the product (includes when product was introduced) +Customer satisfaction (During and after the sale).