The reality is that very few manufacturing businesses will be successful without a solid strategy in place. But why are strategies for manufacturing important? How have they evolved, and what manufacturing strategies are easy for companies to implement?
In this article, we’ll answer all these questions and more.
What is a manufacturing strategy?
A manufacturing strategy has been previously defined as “a long-range plan to use the resources of the manufacturing system to support the business strategy and, in turn, meet the business objectives. (Cimorelli and Chandler, 1996).
The connection that binds all the eras together is manufacturing strategy. Whether it’s a humble artisan in a side-street pottery shop or a technological wiz-kid wanting to build a smart factory, they both need a manufacturing strategy.
As already identified, strategies for manufacturing have been around for many years.
The definition of a what is a manufacturing strategy has also been around for a long time. According to Hayes and Wheelwright, 1984, it is “a sequence of decisions that, over time, enables a business unit to achieve the desired manufacturing structure, infrastructure, and set of specific capabilities.”
Nowadays, manufacturing strategy is often intertwined with a company’s digital strategy, with the tactical management of production and technology at the heart of everything a company achieves.
As was noted by Gündüz Ulusoy back in 2003, formulating a marketing strategy requires making three strategic choices in three key areas: Competitive priorities, manufacturing objectives, and action plans.
Competitive priorities include choices on:
- Quality levels
- Reliability
- Design change
- Deliveries
- New products
Manufacturing objectives involve decision-making on:
- Unit costs
- Market share
- Profitability
- Product development time
And action plans include making decisions about:
- Production
- Energy saving
- Employee empowerment
- Staff training
Once these decisions have been made and a company’s priorities have been identified, an overarching marketing strategy can be formulated.
The history of manufacturing strategy
Whether you are a B2B (business-to-business) or a D2C (direct-to-consumer) manufacturing company, the chances are high that you have a structured manufacturing process in place. Hopefully, this relates back to your manufacturing strategy. This relationship between process and strategy has existed for hundreds of years.
The art of manufacturing has humble beginnings. Way before industrialization was conceptualized, skilled artisans worked to produce commodities. They relied on their craftmanship and secrecy to ensure that their products were in demand and couldn’t be copied.
The first example of a manufacturing strategy was probably when forward-thinking artisans realized they could sub-contract their work to others, thus producing more products and increasing their profits.
Manufacturing was transformed dramatically and definitively in the 18th century during the Industrial Revolution. The invention of machines that could do the work on a mass scale meant that industries such as glassmaking, mining, textiles, and agriculture could produce much more on a much cheaper scale. The mass production concept followed, bringing us to where we are today.
Interestingly, we are on the brink of another transformation in the industrial sector, with the birth of the Fourth Industrial Revolution, 4IR, or Industry 4.0. This is the notion that interconnectivity, smart automation, and digital process management will considerably strengthen production flow, improve quality, and reduce costs. In short, the various parts of a supply chain will interact without human interference.
This may seem almost like a sci-fi fantasy to some, but we are speeding quickly toward this new norm. Who knows what the future of manufacturing looks like? But, the reality is that strategies for manufacturing will always be a priority in the transformation of this fast-paced industry.
Why is a manufacturing strategy important?
A manufacturing strategy is the backbone of how a business operates when you break it down. To ensure your manufacturing strategy is aligned with the overall business strategy, it must be focused on:
- maximizing quality
- minimizing costs
- avoiding wastage
- improving flexibility
All the while being motivated by more lofty goals such as increasing market share and profitability.
Strategies for marketing ensure that a company avoids inefficiencies, optimizes production, and ultimately reaches the goals it is aiming for.
As Steve Lam, Senior Vice President of Patheon’s Biologics Business, states, whether you are processing medicines, clothing, beauty products, or the latest tech-gadgets, “considering your manufacturing strategy early on in development pays dividends down the line.”
So why is a manufacturing strategy important? The answer to this is another question:
Would your business survive without it?
Easy strategies for manufacturing that companies can implement
When choosing a new manufacturing strategy, it’s important to remember it’s not a case of a one-size-fits-all approach but rather finding one that is relevant for your business.
Just because a manufacturing strategy is world-class for some doesn’t mean it will be for others. Be sure to strategize with intent and ensure that your manufacturing strategy gives your company the competitive edge it needs in an increasingly competitive environment. Start by articulating your competitive advantage and then build your strategy around it.
Every decision, from the machinery you use to the automation system you choose, needs to take you one step closer to maximizing that competitive advantage.
So, what are some manufacturing strategy examples that you could implement?
1. Adopt technology
It is crucial to have an agile IT function that can respond flexibly to your business’s demands. Identifying which technologies are applicable and useful to your manufacturing processes is often the first building block in a sturdy manufacturing strategy. Is there a service or app out there that you have not yet considered?
2. Shrink your costs and production waste
This is a no-brainer. If your business has holes in its manufacturing processes that let money flow out of them, then this part of your manufacturing strategy must be robust. Production times, processes, and product quality are things that cannot be compromised on.
3. Stock inventory
Adopting the principles of lean inventory saves you a fortune and gives you a serious competitive edge. Having a better understanding of your stock levels and responding to your customer’s needs more intuitively could result in huge improvements for your business.
4. Automate your processes
The automation of day-to-day tasks can make your business leaner and more efficient. Services like Katana cloud inventory platform can be the bridge that finally connects your procurement, order processing, supply chain, customer service, production, and operations together. Automatically monitoring the movement of your inventory will minimize waste like never before. Furthermore, Katana’s software easily integrates with e-commerce platforms like Shopify and WooCommerce to reduce the risk of stock-outs and to keep your products moving to the customers who want them.
5. Look to the future
Industry 4.0 is just the latest in many changes in the industrial and manufacturing world. Do your research and ensure your manufacturing strategies are robust yet flexible enough so you can pivot if you need to.
Designing manufacturing strategies for success
Strategies for manufacturing are essential to keep a business moving. The most successful businesses over time have been the ones that have chosen strategies that support their long-term ambitions.
Innovative software, visibility, and control are often the backbones of any successful manufacturing strategy, but how you implement these must be unique to your business.
For example, adopting a manufacturing ERP software would be the perfect manufacturing strategy for businesses struggling to keep track of the movement of their inventory.
The key is to be smart about it — Be sure to identify the manufacturing strategies that fit your business model right now and will help you to stay ahead of the competition in the future. Evaluating and measuring your success every step of the way will ensure that you can provide your customers with the products they need before they even know they need them!
