Process Decision Points

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Manufacturing Strategy Processes Decision Points

These are the points within the manufacturing strategy at which decisions are called for, or information is being collected in order to inform a decision. Links are provided to descriptions of potentially useful supplementary tools.

Manufacturing Strategy

Part 1 - Grouping Products

In this part, which is common to both the Manufacturing Strategy and Performance Measurement processes, the aims are for the company to:

identify product groups with distinct competitive requirements.
collect data on identified product groups.

Companies should aim to cluster their products into between 1 and 5 groups based on their competitive requirements. For many companies these will be simple tasks, however, some organisations may be competing in complex, unknown, or very fragmented markets, or may have very complex product ranges and may thus need further decision support tools.

Tools may be required to help:

gather the required market information
process or organise the information gathered
cluster products into meaningful groups.
collect data on identified product groups

Gathering Market Information

Customer views from survey and interview

Published market research data, Competitor Information - annual reports from Companies House, Industry trends from publications such as the Financial Times.

Sales Data (including lost sales and market share).

Organising Gathered Information

Standard spreadsheet and database software

Matrices.

Statistical software

Graphs for Sales Growth and Market Growth.

Product Life cycle for an individual product or group can be plotted as a graph, shown as a position (now) on a generalised product life cycle graph or on a Boston Plot.

Clustering Products

Clustering process.

2 x 2 matrix.

Polar chart.

Statistical software.

Standard find and sort procedures in spreadsheet and database software.

Collect Data on Identified Product Groups

(Sales as % of total sales; Contribution as a % of total contribution; Contribution as a % of group sales; Market share / Competitor ranking / Number of competitors; Sales growth, Market growth, Product group life cycle).

Most of the data required above should be available from the company's sales recording system, either in the form of monthly/annual sales reports or as on screen enquiries. Items that in our experience some companies have trouble with are:

Market share.
Number of competitors.
Competitor ranking.
Market growth.

This information can be difficult to acquire in some industry sectors and may require investigation of information sources such as magazine, newspaper and journal articles, national and international company and customer surveys, government reports, visits to industrial fora such as trade fairs and conferences and participation in benchmarking exercises.

Part 2 - What are the Objectives of Our Business?

In this part, which is also common to both the Manufacturing Strategy and Performance Measurement processes, the aims are for the company to:

1. agree business objectives for each product group, by:

Identifying customer needs

Customer survey, requests, returns and complaints. Information from sales staff is vital but steps should be taken to ensure that it accurately reflects customer requirements and is not merely the sales staff's fantasy or unsupported belief. Consider Quality, Time, Cost and Flexibility.

Identify other needs

Many potential stakeholders are listed in the workbook and individual companies may have others not shown on this list. As well as identifying who the stakeholders are, it may prove useful to rank or weight them in some way. [Analytical Hierarchy Process, Criteria rating form]. Some stakeholder requirements (e.g. government regulators) may need to be met first, simply in order to be in the market at all. Others while still important or relevant may have a smaller impact on the conduct of the business.

On a larger matrix of ranked stakeholders / stakeholder needs, apparent trade-off situations could be identified and attempts made to resolve them. There is also available neural network software that can be 'taught' about the situation which it will then attempt to resolve. An AHP type of matrix may also be useful here.

Identify what implication these combined needs have for the business.

Force field analysis.

Matrix of customer and stakeholder needs looking for conflicts.

Set improvement targets for each business implication

Prioritisation of objectives.

Should targets be stretch? Realistic? Minimal? Benchmark? Based on competitor performance? How do we ensure consistency between individual targets? [Importance / performance matrix, Criteria rating form, Strategic Assessment Model]

Set time scales for the attainment of each target

As "set improvement targets" above.

Check whether your business objectives are consistent with any business strategy you might have.

How do we ensure consistency between targets and our business strategy? [Strategic Assessment Model, Forcefield Analysis, Generic Competitive Strategies]

2. agree who can contribute to achieving the objectives by:

Assessing contributions to the attainment of the objectives.

As well as identifying who the stakeholders are, it may prove useful to rank or weight them in some way. [Analytical Hierarchy Process, Criteria rating form]. Some stakeholder requirements (e.g. government regulators) may need to be met first, simply in order to be in the market at all. Others while still important or relevant may have a smaller impact on the conduct of the business.

3. agree who will be responsible for the attainment of each objective.

This is likely to be the individual representing the function that has the most to contribute to the attainment of the target.

Part 3 - What is Our Current Strategy?

The aim of this part is to:

Identify current manufacturing strategy, by constructing a strategy chart

We are not aware of any better way of doing this (there are other ways, but not so good). Look for software to aid chart formalisation, presentation and maintenance.

Read Mintzberg's 5 P's for Strategy. Read Porter's Generic Competitive Strategies (Ways of competing)

analysing the chart

If the chart is reduced to a software form, it may be possible to use software to assist in its analysis. (E.g an updated version of [Eden's] COPE software, incorporating colour.