The presentation provides various aspects on Manufacturing Strategy and its impact on Product and Process Design

1. Technology and Innovation
Title: Manufacturing Strategy and its impact on Product and Process Design

2. Contents
1 Introduction
2 Diagrammatic Example of Manufacturing Strategy Chart
3 9 strategic manufacturing decision categories
4 New Competing Theory: Lean
5 Consequences of Lean Thinking
6 Reasons for Inconsistent Manufacturing Structures
7 Four Stages of the Strategic Role of Manufacturing
8 Manufacturing Strategy Formulation
9 Sample Manufacturing Strategy Framework
10 Major Manufacturing Decision Categories
11 Manufacturing Strategy and Product Design
12 Manufacturing Strategy and Process Design
13 Process Productivity - Process-Product Matrix
14 Contributions from Manufacturing to NPD
15 The Classic Plant Missions & Linking Strategies to Missions
16 Conclusions
17 References © 2016. All Rights Reserved.

3. Introduction
• Different companies within the same industry have different strengths and
weaknesses and choose to compete in different ways.
• Different production systems have different operating characteristics and each
involves a different set of trade-offs.
• A production system must have a customized design that reflects the priorities and
trade-offs inherent in the firm’s own competitive situation and strategy
• Therefore, no one operating system is universally superior under all competitive
situations and for all companies.
• Every operating system embodies a set of trade-offs. Some will be particularly good
at producing standardized products in high volume at low cost; others will excel at
responding quickly to shifting demand for more customized products.
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4. Diagrammatic Example of Manufacturing
Strategy Chart

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abc
9 strategic manufacturing decision categories

7. New Competing Theory: Lean
Lean production achieves lower cost, higher quality, faster product introductions,
and greater flexibility-all at the same time.
Lean production can dominate any competitive situation.
Lean production combines the advantages of craft and mass production, while
avoiding the high cost of the former and the rigidity of the latter: requires less
inventory, yields fewer defects, and produces an ever-growing variety of products.
Characteristics of a Lean Strategy:
• People should be broadly trained, rather than specialized. Staff is overhead and,
with a high degree of work force "empowerment," not necessary.
• No amount of rejects or variance should be accepted (zero defects is the goal).
• Communication should take place informally and horizontally, among line workers
rather than through hierarchies.
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8. New Competing Theory: Lean
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• Equipment should be general purpose and flexible.
• Production should be organized into cells rather than specialized by
process stages.
• Continuous processes, with as little work-in-process inventory as
possible, is preferable to batch processes.
• Inventory, like rejects, is waste.
• Throughput time is more important than labor or equipment utilization
rates.
• Product development should be organized through cross-functional
teams, which pursue activities in parallel rather than sequentially.
Implication:
Manufacturing Strategy should devote less effort to customizing a production
system and more effort trying to adopt the principles of the already-proven
Lean Production System.

9. Consequences of Lean Thinking
• Western companies embarked on a wide range of programs (TQM, JIT, DFM, CE,
empowerment, re-engineering)
• Many of these programs worked quite well and helped companies regain parity on
costs and quality.
• However, simply adopting a set of generic improvement programs is not enough.
(Only about one third of all the operations improvement programs that US
companies have undertaken were successful)
• Further, programs that did achieve operational objectives (e.g., lower costs), often
did not contribute to overall competitiveness. E.g., programs may reduce costs but
diminish customer service, responsiveness, or flexibility.
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10. • So, TQM, JIT, and other dimensions of "lean production" can re-shape operating
performance, But, companies still need coherent approaches that utilize these
tools effectively and, develop enterprise strategies.
• Further, a static fit between operating strategy and competitive strategy is not
enough.
• Competitive environments are more turbulent.
• Technological changes are more rapid.
• Competitors (from around the globe) are more able.
• Therefore, operating strategies cannot be static. They must provide the
capabilities that both support and drive rapidly evolving challenges and
strategies.
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Consequences of Lean Thinking

11. Reasons for Inconsistent Manufacturing Structures
Manufacturing has a new manufacturing task but continues the old manufacturing policies and
structure.
Managers in manufacturing have no clear, consistent definition or understanding of the
manufacturing task facing the organization.
The manufacturing policies and the infrastructure being employed are inconsistent. Taken
together, there is a distortion in coordination.
The organization lacks a focus. It is attempting to cover too many technologies or too many
products and markets, too wide a range volume, and more than one manufacturing task.
The organization has the wrong equipment & process technology for the present
manufacturing task.
Selection of products and processes for each plant in a multi-plant setup results in mixing
together, somewhat at random, a product organization, a process organization, and a volume-
focused organization (or any two of the three) instead of focusing around one type of
organization.
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12. Four Stages of the Strategic Role of Manufacturing
1. INTERNALLY NEUTRAL
Minimize the “negative effect” of manufacturing
2. EXTERNALLY NEUTRAL
Achieve Parity with Competitors
3. INTERNALLY SUPPORTIVE
Provide Support to the Business Strategy
4. EXTERNALLY SUPPORTIVE
Manufacturing contributes significantly to competitive advantage
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13. Manufacturing Strategy Formulation
1. Draft mission statement (advised by benchmarks)
2. Set operating objectives
--Quality --Customer satisfaction
--Cost --Innovativeness
--Lead times
--Flexibility
3. Develop policies & procedures
Structural
Capacity acquis.
Facilities
Equipment/tech.
Vertical integ.
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Infrastructural
Human resources
Quality assurance.
Product development.
Capital allocation.
Org. Structures.

14. Sample Manufacturing Strategy Framework
Value chain
Internal
-Procurement/supply
-Engineering
-Marketing/sales
-Design office
-Finance
-Labor relations
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Processes
-Technology
-Capability
-Control
-Flexibility
-Std. Oper. Procs.
People
-Skills, training, hiring practices
-Knowledge, expertise, empowerment
-Partnership w/ accountability
-Flexibility
-Environment
External
-World-class benchmarks
-Customers & dealers
-Suppliers
-Government
-Universities

15. Major Manufacturing Decision Categories
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16. Manufacturing Strategy and Product Design
• The degree of difficulty of the manufacturing management task is influenced
strongly by the scope or range of products and processes with which the
manufacturing organization must be proficient as well as the rate of new product
introductions into the manufacturing organization.
• In well-run manufacturing organizations, the manufacturing management must
have significant input into product scope and new product decisions.
• Firms in environments that demand rapid and frequent product introductions or
broad product lines must design flexible, responsive, efficient manufacturing
organizations, must have product designers who have intimate knowledge of the
effects of product design on the demands put on manufacturing, and must have
good communication among design, marketing, and manufacturing.
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17. Manufacturing Strategy and Process Design
• The traditional approach to process choice has been to identify the principal generic
process types (project, job shop, assembly line, continuous flow) and to
choose among them for the production task at hand by matching product
characteristics with process characteristics.
• Although crude, this framework is quite useful for conceptualizing some important
trade-offs in process choice.
• Relative to assembly lines, job shops tend to use more general purpose machines
and higher skilled labor, provide more product flexibility, and yield higher unit
production costs.
• Recent innovations in computer-aided design (CAD), computer-aided
manufacturing (CAM), robotics, and flexible manufacturing systems have
added more complexity to technology decision problems.
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18. Manufacturing Strategy and Process Design
• New highly-automated factories can be extremely expensive about Deere's $500
million factory in Waterloo, Iowa and GE's $300 million improvement in a factory in
Erie, Pennsylvania).
• Many firms decide to invest in these new technologies because they believe their
survival depends on it.
• Traditional financial and accounting evaluation tools are often unable to capture all
of the benefits that can be attributed to the installation of these systems.
Because of these shortcomings, thorough strategic analysis is required to
properly evaluate these investment choices.
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19. Process Productivity - Process-Product Matrix
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20. • Several authors claim the importance of design and manufacturing integration
for a successful New Product Development(NPD) process.
• The NPD process can be described as dealing with two major issues, providing
new or improved functionality and providing more efficient production of
products.
• Often argued for is the need to effectively match new products to process
technology. This, according to theory, is achieved by closely integrating the
design and the manufacturing function at an early stage of the new product
development process.
• However, some findings suggest that early and active participation by suppliers
is as important for NPM as manufacturing involvement is.
• As firms are outsourcing more and more of their manufacturing, firms must to
a great extent rely on suppliers to provide the manufacturing competence in
the NPD process.
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New Product Development Process

21. • Experts suggest three more specific contributions from manufacturing to the NPD
process, each more proactive than the one before.
• First, to inform design about its existing capabilities. This makes it possible for design to
take these capabilities into account when designing the product. It is a conservative and
reactive approach, since designers are asked to adjust to existing manufacturing
capabilities.
• Second, manufacturing can contribute in a more active way to the NPD. This is achieved
by suggesting possible designs of the product which would make it easier to
manufacture. Unlike the first approach, this is more proactive in the way that
manufacturing makes suggestions rather than just informing about its capabilities.
• Third, and most ambitious and proactive, is if manufacturing can design the
manufacturing process in parallel with the product design. This requires the most
intimate communication of the three, and also has the most to be gained from. The
benefit lies principally in the time saved.
• Integrated products are characterised by their de-coupled interfaces and multifunctional
components. When designing integrated products, the need for a top-down design
process, referred to as systems engineering. During this process the focus is on the
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Contributions from Manufacturing to NPD

22. The Classic Plant Missions
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23. Linking Strategies to Missions
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24. Conclusion
• The manufacturing function can be a formidable weapon to achieve
competitive superiority.
• After a set of painful experiences in a wide range of industries, this is
clearly understood by most American managers today.
• Different companies will pursue different paths to manufacturing strategy
design. However, the companies must capture every aspect in their
framework .
• Methodology must contain all the essential elements that must be
considered by any firm attempting to design a manufacturing strategy.
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25. References
• Bettis, R.A. and Hitt, M.A. (1995), “The new competitive landscape'', Strategic
Management Journal, Vol. 16, pp. 7-19.
• Biemans, W.G. (1995), “Internal and external networks in product development: a case for
integration'', in Bruce, M. and Biemans, W.G. (Eds), Product Development: Meeting the
Challenge of the Design-making Interface, John Wiley, London, pp. 137-59.
• Blois, K.J. (1980), “Market concentration ± challenge to corporate planning'', Long Range
Planning, Vol. 13, August, pp. 56-62.
• Burgess, T.F. (1994), “Making the leap to agility: defining and achieving agile
manufacturing through business process redesign and business network redesign'',
International Journal of Operations & Production Management, Vol. 14 No. 11, pp. 23-34.
• Chase, R.B. (1990), “Dimensioning the service factory'', in Ettlie, J.E., Burstein and
Feigenbaum, A. (Eds), Manufacturing Strategy ± the Research Agenda for the Next
Decade, Kluwer Associates, Boston, MA, pp. 175-87.
• Duguay, C.R., Landry, S. and Pasin, F. (1997), “From mass production to flexible/agile
production'', International Journal of Operations & Production Management, Vol. 17 No. 12,
pp. 1183-96 © 2017. All Rights Reserved.