Developing a Manufacturing Strategy: Principles and Concepts

Abstract

Companies invest in a wide range of functions and capabilities in order to make and sell products at a profit. Consequently, the degree to which a company’s functions are aligned to the needs of its markets will directly affect its overall revenue, rate of growth and level of profit. The size of investment in the processes and infrastructure within manufacturing is significant. Getting it right, therefore, is fundamental to a firm’s overall success. If a company could change its manufacturing processes and infrastructure without incurring the key penalties of delay and increased investment, then the strategic decisions within manufacturing would be of little concern or consequence. However, nothing could be further from the truth. The reality is that a lack of fit between these investments and a company’s markets will lead to a business being well wide of the mark. Many executives are still unaware ‘that what appear to be routine manufacturing decisions frequently come to limit the corporation’s strategic options, binding it with facilities, equipment, personnel, basic controls, and policies to a noncompetitive posture, which may take years to turn round’.¹