Consultants in Lean Manufacturing Á Manufacturing Strategy

Consultants in Lean & Manufacturing Strategy

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Manufacturing Focus—A Comprehensive View

An Important Strategic Consideration 

15.1 Introduction

Focused manufacturing links manufacturing facilities to the competitive factors of the business. It enables a company to gain greater control of its competitive position and centralizes focus on its relative competitive advantage.

Among the most difficult of manufacturing tasks is responding to many disparate market demands. Manufacturing system complexity often exaggerates the difficulty. Rather than blaming manufacturing for its problems, the company should recognize that manufacturing is complex and has profound influence on corporate strategy. There are ways to reduce this complexity with subsequent benefits for doing so. Focused manufacturing is one such way.

A simplistic view of focus is 'variety reduction' and market sector reduction. This option may not be a wise one. A narrow product or process range alone is not necessarily focus. The key is to concentrate the entire plant on the fundamental tasks demanded by the plant's overall strategy and marketing objective. This is a first approach.

A meaningful level of focus is rarely understood let alone achieved. Examples will be drawn from our consulting experiences.

Focused manufacturing limits activity in an organization to a manageable and consistent set of tasks. These tasks directly support the firm's marketing strategy. Doing this concentrates expertise and promotes superior performance albeit in a narrow range.

15.2 Scope and Scale

Scale refers to the size of a given plant or manufacturing unit. Scope refers to the number of significantly different products, processes, markets and regions that the facility serves.

Early experience in the basic and mass production industries illustrated the economies of scale. Larger equipment and larger plants appeared to bring lower cost. As Hayes and Wheelwright (1984) point out, there are also diseconomies of scale. Large factories are difficult to manage and control. Overhead costs often rise as factories grow larger. If increased size also brings increased numbers of processes, products or markets, the undesirable effects compound.

Making several small factories from a large one does not necessarily improve performance. If the same scope just exists on a smaller scale, performance is, in fact, likely to decrease.

15.3 Focus Criteria

Reducing scale is easy; reducing scope is more difficult. It requires some basis for segregating operations. This basis or focus criteria may take several forms. The more common are:

  1. 1. Process—a particular process may require high investment and large volume for economic operation. Alternatively, special skills may dictate a concentration based on a particular process. Process focused plants concentrate technical expertise but are difficult to coordinate and control.
  2. 2. Product—a dedicated facility manufactures a product or group of similar products. Product focus promotes quality, reduces inventory and improves response to changing demand. It often requires broader skills and may reduce new product flexibility.
  1. 3. Market— Market segments are a basis for focus when customer demands differ substantially. Quality, delivery, option variety and order size may differ between market segments. If so, these market criteria provide a basis for focus.
  2. 4. Volume— Similar products (or identical products for that matter) may require separate processes and infrastructure for high and low delivery volumes. Production volume can therefore dictate focus.
  3. 5. Geographic— Physical proximity to customers supplies or to special skills may be necessary. Here, geography may be a basis for focus. This often arises where delivery speed is mandatory. It also occurs internationally when import restrictions apply.
  4. 6. Infrastructure— Support systems are, by definition, peripheral to the manufacturing process. However, they and other dominant site factors can impact organizational structures and associated facility requirements. 
Author's Note:
       These pages and the associated download originated with a paper I delivered at the Operations Management Association Conference, Warwick, U.K. in 1992. It was subsequently published as Chapter 15 in Chris Voss' book, Manufacturing Strategy–Process & Content, Chapman & Hall, London, 1992.
       The article is a bit long and a bit academic as it was written for an academic audience. However, it does help with thinking about practical aspects of workcells, lines and plant layout as well as the associated organizational issue

—Q. Lee

15.4 Focus Levels

Although the concept of manufacturing focus originally evolved at the site or factory level, it also applies at other levels. Focus dictates (or should dictate) which site addresses each product, process, market, geography or volume. Each site would specialize along the selected focus dimension.

At the regional or global level, particular countries or regions might specialize. For many years, the large automobile firms built their large cars in North America and small cars in Europe. Just below the site level, a facility might have two or more plants-within-a-plant (PWP). Each PWP is an independent factory with its own infrastructure.

Focus also applies below the PWP level. A layout cell is a space which contains a set of complementary machines, fixtures, activities or people. Layout cells often (but not always) correspond to organizational departments. Departments or cells may specialize by process, product or other suitable focus criteria. This topic will be discussed later in more detail.

Focus can develop at the workstation level. Individuals may specialize by product, process, customer or (again) any suitable focus criteria.

In planning manufacturing strategy, focus issues should be examined at each level since they often differ. A company may decide, for example, on a geographic focus at the site level. At the cell level, it may choose a functional focus.

15.5 Focus and Plant Layout

The plant layout, site plan or map reflects manufacturing focus (or lack thereof). The special case of a plant or site is particularly important and warrants additional discussion.

Site-level focus decisions may involve the full range of focus criteria. The plant layout designer must eventually arrange machines and equipment. Such arrangements require decisions between product and process focus.

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