For businesses that incorporate it to any degree, it is one of the most critical processes.
The manufacturing process should be organized in a way that complements the institutional aims of the business and helps the business get closer and closer to those aims rather than inhibit the business from doing so.
The maximization of productivity requires a sound production plan. Effective planning is thus a complex process considering a wide variety of activities that ensure the constant availability of materials, equipment, and human resources.
Too often, we see across the business world that the manufacturing process itself is treated as a constant, being watched over by business managers making themselves cozy by placing both feet upon the table and enjoying a cigarette.
In recent times, however, more and more business managers are diverting more time and attention to production management.
From the constant drive to improve and achieve more, business managers are coming to realize that there are substantial gains in efficiency and productivity to made from the production process too, and in a way that proves to be of substantial contribution in increased productivity, quality, and increased sales volumes.
A Perfect Production Management
Some of the more defined advantages of effective production planning are:
A bulk of the company’s resources, even human resources, are engaged on the operational side of the business, the side where the manufacturing process lies.
This is the truth whether you manage a company regardless of what industry you are in.
The same is true whether you are a public company or a private one. The resources required proper and thoughtful deployment, coordination, and management in such a way that would strengthen the business’s purposes.
This is where the consideration of the production plan comes into play. Most problems associated with the production process are experienced and encountered on the factory floor.
To address these problems, the managers would have to begin addressing them through the organizational structure in lieu of your production plan.
There is a perfect chance that the problems exist because of the organizational structure, through inefficiencies in it.
If not, then your business managers are slowed down in the process of solving these problems because of a lack of a nuanced template for problem-solving within your institution, among other possible avenues for improvement that are left unattended to.
There is a wide spectrum of strategies, activities, and possibilities for improvement of the production process, and there are both advantages and disadvantages to each.
This article is intended to provide a starting point for you as an entrepreneur to attempt a scheme.
Key Elements of Note In Strategization
As manufacturing is a process, it is only natural that the concept of manufacturing strategy comes to existence.
By ‘strategy’ in this case, we refer to a defined, consistent set of practices that mold the company into a consistency.
These consistencies also manifest themselves in the business’s biases and leanings towards certain types of management choices and decisions.
Whether through gradual practice or deliberate design, this is universal for all businesses engaged in any process, including production.
Strategic preferences are also influenced by certain templates of corporate attitudes, such as:
First: Dominant orientation – These are the companies that take the needs, wants, and the dynamics of the market into consideration substantially in order to lend weight to the effectiveness of their operations.
They focus on the ability to understand and respond effectively to the needs of a particular market or consumer group, which leads them to make use of a wide variety of products, materials, and technologies.
This is also seen involving goods such as steel, rubber, oil, and energy by the companies that trade these. The companies develop multiple, multiple uses for their product and follow the uses into a variety of markets.
Most companies with dominant orientations rarely venture away from this preset orientation, finding unexplored territory difficult and uncomfortable to tread.
When they do get around to exploring new territory, though, these companies fail to appreciate and seriously consider the differences and new levels of complexity that are part of the new business.
From then on, failure is a natural result due to a hesitation to commit the resources necessary to succeed in this new field.
Second: Corporate practices closely related to growth trend – Growth is often more of an input to a company’s planning process rather than an output.
How a company confronts growth opportunities is totally up to it, and the decisions speak volumes of the company’s aims regarding the type of company it wants to be.
Some companies effectively just accept the natural growth rate that the market outputs. This kind of acceptance reflects a decision to solidify and retain a set of priorities, which are often more highly valued than growth, e.g., employee cohesion and efficiency.
In some companies, the very structure calls for a certain rate of growth for the organization to be able to function properly.
This drives companies to explore new markets or new ideas to gain the desired and targeted growth rate if the company’s current markets and products do not allow it, opposite to dominant orientation habits.
Other apparent indications that we can find regarding a company’s leaning in the direction with which emphasis is put in planning, budgeting, and the performance evaluation cycle.
The most important source of such information, however, is the importance the business places on the annual growth rate, set against other measures such as return on sales. Check the company’s stated goals and what the company is actually achieving.
Third: Prioritization of essentials- Businesses are often distinguished based on being a producer and seller of high margin products (Rolls-Royce), or of being a producer and seller of high volume products (Toyota).
The trade-off with the former choice would be a limitation to a low market share, while with the former, it would be low-profit margins and pressure for cost reduction.
The expansion and enrichment of this concept can come about as a result of more nuanced thinking and planning on the part of the business manager as there are more metrics than just simply through pricing. Quality is also a commonly considered metric of competition among companies.
Providing a feature or characteristic not provided by other companies is indeed an apparent edge over the competition, although note must be made of actual and perceived differences, which is affected by the effectiveness of marketing and advertising strategies.
Marketing campaigns for many companies are grounded in dependability and reliability (Casio, Toyota), others make a note of superior craftsmanship and care invested back to the product itself (Aston Martin), or the machined precision with which the product is manufactured (IBM).
As a whole, companies also tend to compete based on flexibility, the ability to handle complicated and nonstandard orders and deliver them timely.
This strategy is often best suited to small companies across multiple industries.
Many other companies also compete based on volume, the large output and delivery figures the company can roll out in a short time, or being able to accelerate or decelerate production at will.
Most companies thus emphasize five criteria: price, quality, dependability, and flexibility. Noting the company’s stated aims and place in the industry, definite priorities must be attached to the company’s work process in a way that best allows it to attain sustainable growth.
Impact on the company’s progress in each of these criteria should be made by almost all decisions made by a business manager, leading to the need to make trade-offs according to the situation; trade-offs without which the company falls behind in the competition.
Thus, it brings us to the point introduced at first, consistency. The lack of consistency means that a company does not have a concrete strategy, regardless of the countless hours and copious amount of energy spent behind formulating plans, directives, and roadmaps.
Be clear about what the company wants to do but also what the company will not want to do.
Evaluate all these parameters in conjunction with a detailed study into failure scenarios (failure mode effect analysis method) and consideration of the ways and paths through which these potential problems can be solved before they even arise.
It is especially important in manufacturing and assembly businesses.
Following the identification of company inclinations, attitudes, and priorities are completed, the task for manufacturing is to arrange its structure and management in a manner that meshes with this strategy and reinforces it.
Ideally, the manufacturing sector must be able to help the company towards the goals it wants to achieve without wasting time and resources in less important directions.
Such a focus would come to be known as the company’s ‘manufacturing mission’. A company’s manufacturing mission may often be forgotten or left by the wayside as managers rush to check out a priority checklist.
The needs of many departments or segments being ignored at the expense of others can naturally through the entire process.
Manufacturing should NOT be automatically expected to do everything well, and without issues, this directs manufacturing managers to attempt to be good at everything at once or focus on wrong things.
A manufacturing manager who had succinctly aligned his organization according to corporate priorities is suddenly subjected to pressure from marketing based on a great number of permutations of different things.
Marketing may pressure manufacturing due to customer complaints, timely delivery, build quality, and a whole host of other things.
Rephrasing it another way, ‘corporate will,’ strong-handed directives, and overall company preferences without encouragement for nuanced action drive the manager to react impulsively, which gradually causes a loss of focus and sense of priority and finally become inconsistent with the overall corporate strategy.
Clearly, this is dangerous, just as dangerous as having no manufacturing mission at all, if not more dangerous as it compounds over time. Some of the considerations required to break the destructive inertia are:
Each of these considerations leads the manager to a variety of choice, with each choice having varying degrees of weight.
As an example, an assembly line is greatly inflexible but is cheaper to operate and can output higher volumes of products compared to a batch-flow operation or custom workshop.
A company that attempts to adjust production rates in order to be expedient towards meeting demand actively will have higher costs, and lower quality than a company takes its time and resources with the maintenance of level and specialized production.
In case a company’s strategy and manufacturing mission both change, then careful examination of these considerations become an inevitability.
If not, then the system becomes incapable of functioning effectively with its plant and equipment or become incompatible with competitive requirements.
The way manufacturing chooses to organize itself is of critical importance to the functioning of the manufacturing process, and it has direct implications on the long term growth and survival of the company.
Entrepreneurs thus must not be careless and inconsiderate when deciding on the organization of the manufacturing process and the operations.
On the flip side, engineers and other specialist managers should not completely shut out the suggestions and directives provided to them by management.
There will likely be a critical difference in priority (engineering priorities and simplicity of operation).
Technical managers may often pursue the needs of the manufacturing process solely and not the needs of the business.
Input and fruitful corroboration from both manufacturing and management is needed to align the needs of the manufacturing process comfortably in line with corporate goals, achieving true synergy.
The same amount and degree of control must be exercised over the entire system. It should be begun by differentiating between the administrative burden on the management of each unit and the central manufacturing.
The multiple templates and action plans through which a total manufacturing system can be organized will vary the demands on each unit and sector.
For example, if an entrepreneur decides to shove all production into a single plant, the management’s job is made very easy.
However, such an arrangement will rain hell upon the manufacturing staff, who will be forced to look after the production of multiple different types of products, overseeing all the logistics and planning for every type of product all by themselves.
On the other hand, an arrangement that divides up production jobs across multiple plants with each plant focusing on the production of a single type of product.
This makes the job of management much more difficult as all the input and output data must be corroborated and crosschecked by them.
The issue of extreme data clutter may be solved through the implementation of an ERP software suite or the refinement of an already existing ERP software suite. However, this is often quite costly and maybe even prohibitively.
Practically, however, if a company seeks growth in size, the first approach will soon become unsustainable. It will become increasingly unworkable as more and more complexity is put under one roof.
Onwards through the typical progression of growth, a single large plant will definitely break down into separate units overseeing the production of different plants.
Thus, the latter approach will always be more practical and worthy of your time and resources.
A TEST FOR THE STRENGTH OF THE ORGANIZATIONAL FRAMEWORK
All endeavors and experiments will undoubtedly have to be tested for the formulator to see if there is a prospect of long term success.
The best way for a company to test the effectiveness of its organization to examine and deduce how the many parts could be fragmented and left to their own devices and still continue to function as independent arms.
Passing this test would mean that all the various arms will be able to divide themselves up cleanly and naturally with no substantial modifications and changes in an organization.
Think of a country composed of semi-autonomous regions in a general landmass or islands in an archipelago.
If the federal union between them is to cease to exist suddenly, would the individual parts of the federation be able to continue on their own and thereby ensuring that not much had changed?
A proper example of a company achieving this to very high degrees would be the American automobile company General Motors.
Their segments are all identified by different brand names such as Pontiac, Chevrolet, Buick, and so on. I
f all these companies were to be forced to divest and become independent, it could be accomplished quite readily. Thus, General Motors can be proven successful and achieving great organizational focus.
RESPONDING TO GROWTH
Growth adds new resources, employees, markets, and more and more revenue.
A company can indeed lose its original focus if it is not well equipped to deal with such an onrush.
Especially when there is rapid growth, managers will certainly want to push for more and more capital gain.
In all cases, growth can disintegrate slowly. The four important dimensions of growth that need to be considered and examined are:
The conclusion that results from the thorough consideration of all these points is that the company should be able to achieve the exact kind of growth required, sustainable growth that helps the company’s arms achieve more and more and not simply just growth, which can often inhibit a company’s processes.
If growth is mostly an expansion of product lines, then a product-focused organization will be best equipped to handle it and continue to profit from increased growth.
On the other hand, a process-focused organization can probably best introduce and manage the segments of the entire production process. Coordination of each unit of production and logistics will be more effective, and confusion can be eliminated.
Complete recognition and understanding of whether your company will be steered towards a product focus or process focus will be crucial.
The only way to extract the best out of manufacturing and have it drive your company to greater heights is to ensure that all of its units are consistent with priorities and directives that are fully understood and recognized, this is the only way to increase efficiency.
When it is thought out well and set right, the proper choice of coordination between manufacturing and management can smooth a company’s growth by ensuring rigid stability.