Successful Manufacturing Performance Programs Aren't Driven by Cost Reduction Goals, According to AberdeenGroup Report

Business Wire, Jan 20, 2005

BOSTON -- Billions of dollars have been spent on employing manufacturing performance management strategies and IT solutions to improve manufacturing operations and financial performance. While most manufacturers have benefited, the best performers have had much more dramatic improvements in their core capabilities such as manufacturing cycle time, throughput, schedule compliance, return on assets and inventory turns that have helped their overall competitiveness and long-term financial success.

"The debate over which improvement methodology - 6 sigma, lean, theory of constraints, or others - is most important and whether planning or execution IT solutions are most important to drive manufacturing performance needs to come to an end." said Chris Jones, Aberdeen's senior vice president of value chain research and author of the report. "Best-in-class enterprises combine improvement methodologies with a balanced emphasis on planning, execution, control and analysis processes and a supporting integrated IT solution to drive corporate competitiveness."

The Manufacturing Performance Management Strategies Benchmark Study finds that far too many manufacturers are still focused on the symptoms of their performance challenges, struggle to get the data to drive their performance improvement programs ahead, and use few commercial IT solutions. The better performers, on the other hand, have moved past these issues by staying the course with their programs and place the most emphasis on improvement methodologies and IT solutions that can keep up with their pace of business change.

To optimize outsourced manufacturing performance, Jones recommends the following:

--Stay the course -- staying with your selected improvement methodologies is more important than which methodology you choose

--Implement a closed-loop manufacturing performance management process and IT solution

--Leverage analytical tools to accelerate the continuous improvement process

--Extend manufacturing processes into logistics and customer service

--Consider IT solution flexibility to be as important as IT functional capability when making a technology selection

Download a copy of the Manufacturing Performance Management Strategies Benchmark Report by following this link: http://aberdeen.com/summary/report/benchmark/MfgPerfMgmt011805_CJ.asp

About AberdeenGroup

Founded in 1988, AberdeenGroup Inc. is the trusted advisor to the global business executive for value chain strategies and business advice.