THE EXPLICIT AND IMPLICIT

MANUFACTURING STRATEGIES

MBA Research Project

(GSB UCT 1997)
By

YUNUS TURAN
 OBJECTIVES

¾ Identify the corporate goals

¾ Assess how manufacturing meets corporate
goals
¾ Ascertain the extent of market knowledge
among different functional areas
¾ Deduce the degree of correlation between
market demands and manufacturing choices
¾ Develop a manufacturing strategy using Terry
Hill’s model
 METHODOLOGY

¾ Brief the management team on the objectives

and methodology of the research
¾ Identify corporate objectives from written
documents and MD interview
¾ Interviews with MD and heads of divisions to
determine the manufacturing strategy and
ascertain their views on qualifying and order
winning criteria
RESEARCH METHODOLOGY cont....’

¾ Identify marketing strategy

¾ Interviews with key manufacturing staff and
make observations on the shop floor
¾ Conduct a manufacturing audit
¾ Review company documents
MANUFACTURING AUDIT
PROCEDURE

¾What to make and what to buy

¾Production planning, scheduling,
and inventory control
¾Work-force management
¾Quality control
¾The formal organisation
¾Controls, reports, and information systems
¾Purchasing
 RESULTS

¾Company background
¾Corporate strategy
¾Marketing strategy
¾Technology and facilities
¾Capacity utilisation
¾Production planning and scheduling
¾Quality control
¾Work-force policies
¾Order winners and qualifiers
 COMPANY BACKGROUND

¾Electro-mechanical equipment manufacturer

¾Nationwide and international sales
 CORPORATE STRATEGY
350%

306%

300%

250%
Sales

200% 193%

150% 137%

100%
100%

50%
Year 1 Year 2 Year 3 Year 4
Ye a rs
 MARKETING STRATEGY

¾Create new concepts in the local market

¾Increase export sales to meet sales targets
¾Become one of the top five manufacturer
TECHNOLOGY AND FACILITIES

¾ Job shop - batch operation

¾Transition into a focused factory layout
¾New facilities to meet increasing sales growth
¾Labour intensive operations
PRODUCTION CONTROL AND
SCHEDULING

¾Forecasting process
¾Separate sales department
¾Loading of the factory to full capacity
¾Certain departments works in shifts
¾Batch production scheduling
QUALITY CONTROL

¾ ISO 9002 listed

¾Early stages of quality system
implementation
¾Factory objectives
Reduce damage and loss
Increase productivity
WORK FORCE POLICIES

¾Business appreciation
¾Training programs
¾Skills development
 EXPLICIT
MANUFACTURING STRATEGY

¾No documented manufacturing strategy

ORDER WINNERS AND QUALIFIERS
A cco rd ing to m anu factu ring
E xp o rt L o cal
O rd er W inners and Q u alifiers 1997 1998 1997 1998
P rice 50% 60% 40% 50%
F lexibility 30 30 20 20
L ead T im e 20 10 - -
T echnical S ervice - - 20 30
Q u ality Q Q 20 Q
A cco rd ing to sales
E xp o rt L o cal
O rd er W inners and Q u alifiers 1997 1998 1997 1998
R ep u tatio n - - 60 60
R elatio nship - - 10 20
S elling sk ills - - 10 10
P rice 50 60 Q Q
F lexibility 30 30 - -
L ead T im e 20 10 - -
T echnical S ervice - - 10 10
Q u ality Q Q 10 Q
THE MANUFACTURING TASK

¾Export market
low cost manufacturer
product customisation (flexibility)
short lead-time.

¾Local market
low cost manufacturer
wide range of products
technical service
 CONCLUSIONS

¾ Manufacturing strategy development is implicit

¾ Implicit manufacturing strategy are aligned
towards meeting the corporate objectives.
¾ Differences between improvement programs
and strategic decisions.
¾ Management control systems are at an
early stage of implementation.
¾ A culture of change and adaptability
exist in the company.