1 / 15

Configuration of Elements

Configuration of Elements. ENVIRONMENT. STRUCTURE. MANUFACTURING STRATEGY. COMPETITIVE STRATEGY. PERFORMANCE. Manufacturing Strategy Model. Manufacturing Strategy. Process technology Capacity Quality systems Production/inventory control Workforce Management

robertlawson
Download Presentation

Configuration of Elements

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Configuration of Elements ENVIRONMENT STRUCTURE MANUFACTURING STRATEGY COMPETITIVE STRATEGY PERFORMANCE

  2. Manufacturing Strategy Model Manufacturing Strategy • Process technology • Capacity • Quality systems • Production/inventory control • Workforce Management • Manufacturing Organization • Cost • Quality • Delivery time • Flexibility

  3. Strategic Configurations • Configurations are a tightly linked set of four elements • No causation is implied among the elements • Start with consideration of competitive strategy • Alignment among elements is essential to optimal performance • Manufacturing strategy is of special interest to us

  4. Manufacturing Capabilities • Some manufacturing capabilities are better suited to particular configurations • Manufacturing capabilities take time to develop • Flexibility is an important capability especially if it permits firms to transcend tradeoffs between cost, quality, and delivery time • Customers don’t experience flexibility directly, but they experience its consequences • Flexibility can be achieved through technological or organizational innovation

  5. Configuration #1 – Niche Differentiator • What is the strategy? • Pursue segments that are”underserved” by broad differentiators or cost leaders • Make high value-added products, sometimes bundled with services • Maximize gross margins - Don’t compete on price • Respond nimbly to opportunities that other larger companies miss • Segments may be too small or stable to interest larger firms

  6. Configuration #1 (Continued) • Environment • Pursue narrow segments (by customer, product technology or locale). • Who is willing to pay more for what you have to offer? • Segments change often because of fashions • Structure • Simple • Top organized by functions • Few levels of technical specialists • Lots of highly skilled workers

  7. What Manufacturing Capabilities Match Configuration #1? • Achieve flexibility by technology or people? • General purpose equipment • Labor intensive skilled workers (motivated, multi-skilled, autonomous, well paid) • Focused facilities - short runs only • Inventory tends to be high despite desire to avoid it in a volatile environment • Outsource - use JIT • How to develop relationships when firm is a small buyer for your suppliers

  8. Configuration #2 Broad Differentiator • What is the competitive Strategy? • Offer a wide range of products to a variety of markets • Compete on quality and service, brand – not price). • Grow by entering new markets and developing new products • Deal with competition from niche differentiators (low volume customized) and cost leaders (high volume low cost)

  9. Configuration #2 (Continued) • Environment • Complex and heterogeneous • Structure • Decentralized around product/market units (businesses, divisions) • Best to coordinate between self-contained units, but liaisons and cross-functional teams help • Got to have lots of specialized engineers and marketers to develop new markets

  10. What Manufacturing Capabilities Match Configuration #2 • Complexity and confusion are the enemy • Multiple products at different life cycle stages • What kind of plants and equipment should you have for both emerging and mature products • Capacity dynamics are challenging (“insufficient capacity” means the wrong kind of capacity). • Reallocation of resources is frequent but tougher to do with centralization • Diseconomies of scale develop from confusion of multiple flows

  11. Configuration #3 – Cost Leaders • What is the strategy? • Compete on the basis of low cost • Rely on economies of scale • Low margins, but make money on volume • Focus on high volume stable, mature markets

  12. Configuration #3 (Continued) • Environment • Stable environment (required because of large investment in specialized capital) • Structure • Large, centralized and bureaucratic • Lots of skilled specialists, but few skilled workers • Manufacturing Capability • Standardization around a dominant design • Capacity additions tend to be large and lumpy • Rely on vertical integration for economies but less so now

  13. Configuration #4 - Lean Competitor • This is not a separate strategy but a capability solution for broad differentiators • Could differentiate by brand or service or we can transcend old tradeoffs with lean manufacturing • Can we transcend? • Porter says no. You will get “stuck in the middle” • Cost versus quality? • Quality versus delivery? • Cost versus delivery?

  14. Lean Innovative Practices • Just-in-time • Continuous improvement • Simultaneous engineering • Autonomous teams • Outsourcing and alliances

  15. GE Dishwasher Plant • Product innovation (plastic tub and door assemblies). Cost was initially higher • Proceed sequentially • Product/process design • Cost/Quality (economies of scale, worker training) • Flexibility (AMT)

More Related