Manufacturing Strategy MGSC 602 Prof' Saibal Ray

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Manufacturing StrategyMGSC 602Prof. Saibal Ray

• Module 3 Designing and Implementing Operations
  Improvement Strategies
• Module Introduction
• Handout 7
• Session 10

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Why do we need an Improvement Strategy?

• Technology has never been more important yet
  building a competitive advantage through
  technology alone has never been more difficult
• The primary advantage of technology is its
  biggest disadvantage it is available to
  everyone!
• Who wins? Superior strategy and execution
• Effective Improvement is the key to long-term
  success
• Winners and Qualifiers jockey more often
• More player, more competitive
• Spoils increasingly go to the dogged but rapid
  improvers

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• Improvement strategy does not mean which faddish
  technique to use
• The organizations that are able to have
  sustainable competitive advantage are those that
  can harness the various improvement programs to
  the goal of selecting and developing unique
  capabilities
• How to create such a strategy?
• - Which are the capabilities that are unique and
  can give competitive advantage?
• - How can we develop those capabilities?

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Why do we need an Improvement Strategy?

• Adoption of any improvement program should depend
  on whether it creates any valuable capability
  for the organization
• Limited Resources
• Capital People Managerial Attention
• Focus
• Dissemination
• The question of fit and focus is very important

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7 Elements

• Context
• Goals Measurement
• Focus
• Improvement Techniques and Tools
• Resources
• Organization Phasing
• Learning Capture

Orienting the Path
Improvement Infrastructure
Improvement Process
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1. Context (Why?)

• WHY purpose of Improvement
• What is the Motivation?
• Part of strategy because you can create ite.g.
• Strengthen position (WalMart)
• Crisis (Harley-Davidson)
• Defend against competitive threats (US
  automobile industry)
• Change mode of Competition new order winner
  (Color TV industry, Stermon Mills)
• Need clear, credible, wide-spread understanding

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2. Goals (What?)

• WHAT to improve?
• Focused Goals vs. Spread goals
• John Crane/Vandelay responsiveness
• Integron cost, quality, responsiveness
• Long-term, short-term goals
• How, when will they be measured?
• Enhance clarity of goals
• Who sets the goals?
• Corporate? Operating Unit?
• Whole Plant? Or tailored for a particular
  department or process?

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3. Focus (Where?)

• WHERE at what level to attack
• For example
• Service/Manufacturing Process (Display
  Technologies)
• Coordinative Processes (Vandelay, Kanebo)
• New Process Technology (Solagen)
• Distribution and Order Processing (Wal-Mart)
• Sourcing Practices (Aerotech)
• New Product Development (3M, Sony)
• Integration within Plant Network (Aerotech)

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4. Improvement Techniques/Toolkit (How?)

• HOW to improve?
• 4 Broad categories
• Equipment/Investment based (FMS, New Plant)
• Cybertech
• Systems/IT based (MRP, DRP, SPC, ERP)
• Deloitte SAP, Aerotech
• People based (Empowerment, Incentives)
• Daewoo
• Philosophy based (Total Quality, Six-sigma, TPS,
  Lean)
• GE, Toyota
• Always a mixture but often a dominant theme

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5. Resources

• Time, expertise, money
• Running the operation or improving it
• Who? 100 committed vs. other work too?
• How much in each category?
• training?
• equipment?
• computer systems?
• Absolute Level and Split
• Corporate Support

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6. Organization and Phasing

• Use existing organizational structure or use
  teams?
• Type of team? (Functional, Lightweight,
  Heavyweight, Dedicated)
• How many projects, people?
• How often do they meet? Danger of too many
  projects
• Split between plan and action depends on nature
  of project and progress stage key decision
• Sponsor, Champion, Implementers

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7. Learning Capture

• How will you capture what you learn?
• Train trainers?
• Video?
• Databases?
• Face-to-face meeting?
• How will you disseminate it?
• Roadshows
• Video
• Invite Shop/Plant Tours

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Learning Organizations

• An organization that is skilled at creating,
  acquiring, interpreting, retaining and
  transferring knowledge and at purposefully
  modifying its behavior based on new knowledge and
  insights
• Knowledge creation/acquisition is not the main
  problem the others are

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Criteria for Assessing Operations Improvement
Strategies

• Completeness
• Coherence
• Fit with Competitive Goals
• Fit with Operations Strategy
• Speed and Efficiency

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Some Driving Questions

• How does a manager translate higher-level
  directives into an actionable strategy for the
  local operation?
• How to decide what to tackle first in a
  low-performing operation?
• How can an operations improvement initiative be
  kept from burning out or backsliding?
• What are the key decisions to be made when
  developing an improvement strategy for an
  operating unit?
• How to balance the demands from corporate parent
  and from plant personnel?