Needed: more focus on manufacturing

USA Today (Society for the Advancement of Education), Dec, 1996

If U.S. industry is to succeed in the global marketplace, corporate leaders need to give more attention to manufacturing strategy, according to researchers at Ohio State University. "It seems that many corporate managers are more interested in the intricacies of finance than the details of making good products," notes G. Keong Leong, associate professor of operations management. "Manufacturing has to become a bigger priority in the minds of managers."

One problem has been the lack of a clear definition of what manufacturing strategy should include. To remedy this, Leong and Peter Ward, associate professor of operations management, developed what they call "the six P's of manufacturing strategy":

Planning. Many companies development plans to help guide what they hope to achieve in their manufacturing process. The problem is that many firms believe having a plan is the same as having a strategy. "Just having a business plan is not enough to ensure success," Leong points out.

Proactiveness."One of the reasons U.S. companies have fallen behind foreign competitors is that manufacturing has taken a subordinate role to marketing and finance functions," he indicates. "This means manufacturing is always reacting to decisions by other units of the company and is always concerned with short-term issues." To be proactive, businesses must anticipate the potential of new manufacturing practices and technologies and make sure that manufacturing is involved in major engineering and marketing decisions.

Pattern of actions. While it is important to have a manufacturing plan, what counts are the actions and decisions made by management. These will determine whether a manufacturing strategy is successful or not.

Portfolio of manufacturing capabilities. These are the special abilities that a company has in manufacturing. Some examples include cost, quality, delivery, and performance. Managers should emphasize those capabilities at which the firm excels. For example, if it has the capability to make products more cheaply than competitors, that ability should be exploited.

Programs of improvement. These should be developed to improve manufacturing capabilities ties needed to succeed in the marketplace. For example, a company may need to find ways cut manufacturing costs if competitors can offer less expensive products.

Performance measurement. Managers need to find ways to evaluate how their company is doing at meeting its strategic goals. For instance, a business that stresses rapid delivery of products needs to find ways to measure and reward delivery performance within the company.