Basic Concepts of a Focused Factory Producing a lower cost is not the only way to compete A company cannot perform well all the time Simplicity and repetition create competence
Characteristics of a Focused Factory Process Technologies – Typically, unproven and uncertain technologies are limited to one per factory. Proven, mature technologies are limited to what their managers can easily handle, typically two or three. Market Demands – Quality, Price, lead times, and reliability specifications. Product volumes – comparable levels such as tooling, order quantities, materials handling techniques, and job contents, can be approached with a consistent philosophy. But what about the inevitable short runs, customer specials, and one-of-a-kind orders that every factory must handle? The answer usually is to segregate them. Quality levels – set approaches to neither over-specify nor over-control quality and specifications. Manufacturing Tools – limited to one or two at a time.
Manufacturing Focus A way to achieve it Focus the whole manufacturing system on a limited task that is exactly represented by the company’s competitive strategy and its actual technology and economics.
Guidelines Center the factory’s focus on appropriate competitive skills Stay away from the tendency to increase staff and overhead in order to save on direct labor and capital investment Each manufacturing unit should work on a limited task instead of a complex mix of opposing objectives, products and technologies. Note: Others may also apply as company sees fit!
How can I achieve a focused plant? 4 step process 1. Develop a specific, brief statement of corporate objectives and strategy 1. Should cover the next three to five years and top-management should be involved to (marketing, finance, control executives etc.) 2. Translate the statement into: What it means to manufacturing? 1. What must the factory do well to meet and carry out the corporate strategy? 2. What will be the most difficult task we face? 3. If function is not strong where will we most likely fail? 3. Carefully examine each element of the production system 1. How is it setup, organized, focused, and manned now? 2. What is it especially good at now? 3. How ought it be changed so it can carry out the key manufacturing task? 4. Reorganize the elements of structure to produce a congruent focus 1. This means organize it so that it is able to do the limited things that are most important to completing the manufacturing task.
Wickham Skinner Considered the father of Manufacturing Strategy Graduated from Yale Emeritus professor at Harvard University Wrote “The Focused Factory”
Basic Changes in Management of Manufacturing Four Basic Changes 1. “How can we compete?” 2. Look at efficiency as the whole manufacturing organization 3. Each plant needs to learn to focus on a limited, concise, manageable set of products, technologies, volumes, and markets* 4. Learn to structure basic manufacturing policies and supporting services so that they focus on one explicit manufacturing task instead of on many inconsistent, conflicting, implicit tasks* *W. Skinner, “The Focused Factory”, Harvard Business Review June 1974
Reasons For Inconsistency Professionals in each field attempt to achieve goals that are not corresponding with goals of other areas Manufacturing tasks were never made specific Inconsistencies never identified Manufacturing task lightly changed while certain departments like operating and service stayed the same Market & Product Proliferation
Alternative Approaches to Focusing Facilities Based On: Products/Markets Directed for specific customers or product groups Processes Puts products together based on similar processes used Manufacturing’s Strategic Task Products are assigned to a specific unit based off OW & Q Task is consistent
Plant-within-a-Plant (PWP) Divide existing plant into PWPs Physically Organizationally Each PWP has its only facilities where it can focus on Its specified manufacturing task Use its own working style Production control Organizational structure
Results From Using a PWP Volume & Quality will not be mixed Clear focus for worker training & incentives Resources are now shared Equipment, engineering processes and materials handling are specialized as needed Decreases focus regression Smaller size
Forces That Make it Difficult to Focus Marketing Sales Manufacturing Accounting & Finance Corporate Forces