Manufacturing strategy: Experiences from select Indian organizations
Dangayach, G S
Abstract
The manufacturing function can be a formidable weapon to achieve competitive superiority. Through three case studies, this paper observes the manufacturing strategy practices in select Indian organizations. The common aspects and differences between the example organizations are highlighted. A model is proposed linking the manufacturing competitive priorities and the action plan pursued by these firms.
Keywords: Manufacturing Strategy, Corporate Strategy, Order Qualifiers, Order Winners, World-Class Manufacturing
Introduction
Turbulent and uncertain marketplaces throughout the world are the result of intense competition, changes in manufacturing management, developments in manufacturing technology, environmental changes, rapid advances in information technology, developments in new processes and materials, opening up of economies, shortening of product life cycles, and advances in physical and biological sciences. The transition of production systems to new organizational forms and managerial practices under the pressure of radical changes in competition, marketplaces, technologies, and socioeconomics has attracted much research attention. It is becoming increasingly important for manufacturing organizations to articulate clear and coherent manufacturing strategies that support their long-term business objectives.
Manufacturing strategy in an organization is concerned with key decisions about the specific role to be played by the manufacturing function in achieving competitive advantage. In the past, manufacturing strategy has been a neglected topic of discussion, especially in countries such as India. In fact, manufacturing has frequently been regarded as the poor relation of the other higher profile functions of finance and marketing.1 The manufacturing function was regarded merely as a collection of resources and constraints and was expected to fulfill, as efficiently as possible, the production targets generated by the marketing strategy within the capacity and capital expenditure constraints imposed by financial strategy.1 Skinner1 was the first to observe that a company’s manufacturing function could do more than simply produce and ship the products.
Assessing manufacturing strengths and weaknesses is imperative to decide the strategies to compete in the marketplace. To assess the critical success factors in today’s competitive environment, a company must formulate a manufacturing strategy aligned with business strategy to achieve superior performance and capability.2 Numerous efforts on manufacturing strategy have been reported in the literature by various researchers in the form of empirical studies, surveys, transnational comparisons, and case studies.3 Prochno and Correa’ developed a model of manufacturing strategy development in an industry in Brazil, where the environment is turbulent and change is not the exception but the rule. They involved five customers and key managers from different functions and used a number of worksheets and interviews during their study. In their study, Rohr and Correas addressed the key question of competing in time. They applied semi-structured questionnaires and interviews in seven selected companies in Brazil. Lindberg and Trygg6 focused on the interdependence of component suppliers and manufacturers of finished goods in Swedish industry. They collected data from 126 companies to assess these objectives, whereas Horte, Borjesson, and Tunalv7 discussed some aspects of manufacturing strategy developed by Swedish manufacturing companies over a three-year period from 1986-1989. They used survey methodology for 184 Swedish firms. Kim and Arnolds developed a process model of manufacturing strategy for operationalizing the fundamental concepts of competitive priorities into more concrete decisions on action programs. Their process model was based on data collected from the 1990 manufacturing futures survey for 182 USbased firms. Kim and Arnold included three major constructs of manufacturing strategy-competitive priorities, manufacturing objectives, and action plans. Similar research has been performed by Neely et al.9 for 344 UK firms. They assessed the status of manufacturing strategy and performance measurement systems in the selected companies. Hitomi’ highlighted industrial strengths and status of manufacturing strategy in Japan. Ardishvili and Hill” conducted a study of 49 firms in the former Soviet Union to understand the manufacturing practices and to determine the required changes for a new market-driven economy. Chikan and Demeter” assessed manufacturing strategy practices and Skinner’s framework for 75 Hungarian firms.
Transnational comparisons of various countries and continents are also reported in the literature. Bolwjin and Brinkman13 compared Western and Japanese work culture, management, and organization practices and highlighted the fundamental dif ferences between them. Pilkington14 compared the automobile leaders of USA, UK, Japan, France, and Italy and explored why manufacturing managers have remained embedded in the best-practice mode. Noble15 tested a cumulative model for the building of manufacturing capabilities by comparing and contrasting the manufacturing strategies of 265 North American, 129 European, and 167 Korean factories by region. A similar study was performed by Ferdows et al.16 for comparing the trends in implementation of manufacturing strategy in 168 European, 174 North American, and 186 Korean firms. In 1998, Voss and Blackmon17 gathered data from 600 firms in 20 countries. They examined the cultural differences between Western and Japanese firms for manufacturing practices and performance. According to Voss and Blackmon, there is a perceptible difference about strategic time orientation in manufacturing strategy. They found that the widely accepted belief that Western companies are short-term oriented and that Japanese companies are long-term oriented was wrong. They observed that Japanese companies are simultaneously short-term and long-term in their approach to manufacturing strategy.
The Situation in India
Though a number of select case studies have been reported by researchers elsewhere, no such study has been reported to date for India. Manufacturing strategy practices in India are theorized to be closer to the other third-world countries like Hungary, Brazil, and so on. The following factors characterize the situation:
The Indian economy is being made more and more open. This is reflected through the following points:18
Foreign equity up to 100% is encouraged in several sectors.
Single market-determined exchange rate for the rupee is prevalent.
Use of foreign brand names and trademarks for sale of goods in India is allowed.
Foreign companies are permitted to open branch offices in India.
The entry of multinational companies has increased the level of competition; for example, since 1991 Daewoo, LG, Santro, Samsung, and so on have started plants in India.
There is a favorable attitude of government and other funding agencies.19
Facilities for automatic and single-window clearance are available with respect to proposals for 100% export-oriented units.
The Reserve Bank of India gives automatic permission for foreign technology agreements in high-priority industries.
Between the 1950s and the 1990s, India’s Industrial development policy was characterized by excessive regulation. Initially set up to avoid overcapacity in a capital-scarce economy, this policy spawned a maze of regulations governing product, capacity, technology, and foreign exchange availability. In the late 1980s, inflows of foreign technology and equity were permitted and manufacturing capacity constraints lifted. The gradual opening of the Indian economy resulted in the entry of foreign competitors and expanded production by domestic manufacturers. By the 1990s, the Indian economy was undergoing structural change, and imports were largely unregulated.20
Since reforms began in 1991, such as the abolition of the license regime that meant the end of protection and control measures, Indian firms have faced a very different competitive scenario compared to the past. Manufacturing in India is at a critical juncture. In the Indian perspective, manufacturing is a support activity for marketing and finance and, therefore, has gotten little top management attention. Most firms are still very far from world-class practices. Meanwhile, international competitors are continuously working on improving manufacturing, bringing in new products, and making manufacturing more proactive and responsive.21 Indian industry is facing competition from imports and from multinational companies in the domestic markets. The new competition is in terms of reduced cost, improved quality, products with higher performance, a wider range of products, and better service, all delivered simultaneously. In the past, Indian firms quite often followed an opportunistic approach to growth as opposed to a capability-driven approach that seeks to strengthen key aspects of manufacturing. Consequently, firms have paid very little strategic attention to their shop floors.21 This was reflected in poor quality of products, no awareness about competitiveness, and no integration of various functions such as marketing, sales, production, and so on.
A comparative analysis of selected economic indicators of major Asian countries is given in Table 1, which reveals that manufacturing value in India is the least at 18% of gross domestic product (GDP). India has the lowest per capita gross national product (GNP) (387 US$) and exports (35 billion US$).18
In the present competitive global environment, firms have to search for new processes, new materials, new vendors, new shop floor design, and new channels to deliver their products and services. They have to develop their infrastructure and invest more on research and development. In addition, Indian manufacturing firms are being increasingly required to have a clear-cut manufacturing strategy to integrate services and products to meet customer needs. Manufacturing strategy is essential for an organization due to the above changes in objectives and criteria. Table 2 represents the changes in various criteria related to structural and infrastructural issues in manufacturing strategy. Structural issues deal with manufacturing setups, product design, manufacturing planning, cost management, and technology aspects, whereas infrastructural issues consider quality systems, human resource policies, organization culture, and nature of management. From an Indian perspective, infrastructural issues of manufacturing strategy are highly relevant in the current scenario. In this light, manufacturing strategy is urgently needed for Indian firms to:
respond to business strategy or corporate objectives
correct present weaknesses or exploit strengths
cope with anticipated environmental changes
get distinctive competence that is currently not available
make the manufacturing function strong
achieve performance objectives
Manufacturing Strategy
Hayes and Wheelwright22 defined manufacturing strategy as a consistent pattern of decision making in the manufacturing function that is linked to the business strategy. According to Hayes and Wheelwright,22 manufacturing strategy is the deployment and development of manufacturing capabilities in total alignment with the firm’s goals and strategies. Manufacturing strategy provides a vision for the manufacturing organization based on business strategy. Various researchers have interpreted manufacturing strategy over the last 20 years. Table 3 gives definitions given by other researchers. Skinner’ identified the absence of manufacturing in the corporate strategic planning process. According to him, manufacturing strategy can be used to exploit certain properties of the manufacturing function to achieve competitive advantage. He suggested that a proper fit is essential between manufacturing and marketing and identified five decision areas for trade-off in the manufacturing organization: (1) plant and equipment, (2) production planning and control, (3) labor and staffing, (4) product design, and (5) organization management. Later, Hayes and Wheelwright” categorized manufacturing organizations in four stages according to manufacturing’s strategic role, as shown in Table 4. This model is referred to as the H&W model in this paper. In stage I, organizations react blindly to the demands placed on them from the top and offer no strategic advantage to the firm. Stage II organizations follow the trends of industry practice. Differences between stage III and stage IV firms lie primarily in their proactiveness. Three dimensions distinguish organizations in stage IV:
Manufacturing is involved up front in major marketing and engineering decisions.
Efforts are made to anticipate the potential of new manufacturing practices and technologies.
Long-range programs are pursued to acquire manufacturing capabilities in advance of needs.
Therefore, stage IV organizations are fully proactive, and they follow world-class practices. Proactiveness is the single characteristic that discriminates between manufacturing functions that offer strategic benefit to the firms, whereas reactive manufacturers are forced to catch up with the leader when their product engineering departments respond to the competitive challenge.
Gerwin” and Leong, Snyder, and Ward”‘ have elaborated on customer expectations-cost, quality, delivery, flexibility, and innovation, which are popularly termed as competitive priorities or manufacturing performance objectives. These competitive priorities can be defined as follows:
Cost: Production and distribution of product at low cost
Quality: Manufacture of products with high quality or performance standards
Delivery dependability: Meet delivery schedules
Delivery speed: Respond quickly to customer orders
Flexibility: React to changes in production, changes in product mix, modifications in design, fluctuations in materials, changes in sequence
Innovation: Introduction of new product and processes
Hill2,23 introduced the concept of order winners and order qualifiers and differentiated between them. Order qualifiers are those criteria that a company must meet for a customer even to consider it as a competitor. Order winners are those criteria that win the order. To provide order qualifiers, companies need only to be as good as competitors, but to provide order winners they need to be better than competitors. According to Hill,2
Order winners and qualifiers are both market and time specific. Thus, the criteria relating to a market will need different levels of emphasis and will change over time.
When developing order winners and qualifiers, companies must distinguish the level of importance for individual criteria for each market.
Order winners and qualifiers and their relative weights will change over time.
Not all order winners and qualifiers are related to manufacturing. Hill categorized them into manufacturing-related and non-manufacturingrelated criteria. Manufacturing-related criteria includes price, delivery reliability, delivery speed, quality, demand increases, product range, design, and distribution, whereas non-manufacturing-related criteria may include design leadership, marketing and sales, brand name, technical liaison and support, after-sales support, and so forth.
The criteria that relate to a winning order for a primary supplier will differ from those for secondary supplier.
The criteria needed to retain existing customers are different than those needed to increase market share or gain prospective customers.
Hill also discussed the process choice and infrastructure parameters for manufacturing strategy. Process choice includes processes, trade-off, capacity, and inventory, whereas infrastructure issues include function support, production planning and control, quality assurance, wage system, and organization structure. Table 4 summarizes the models used in the present work.
Case Studies
To gain insights into manufacturing strategy practices in Indian firms, an exploratory survey was made of 25 automobile and 10 electronic firms through a structured questionnaire. These firms were located throughout India. Based on this survey, three firms were identified. Firm A is an automobile company; firm B belongs to the automotive component sector; and firm C is in the electronics industry. The criteria for selection of automotive and electronic industries are based on the fact that the automobile and electronic industries in the world are fairly developed, involve huge investments in technology and research and development, and are seen as an indicator of the economic progress of the country.27
Approaches Used
Based on the literature review, it is found that the following models are useful in gaining insights into the manufacturing strategy related issues:
1. Hayes and Wheelwright’s (H&W) framework
2. Hill’s framework (order winners and order qualifiers): To determine order winners and qualifiers for the case firms, adequate time was devoted in assessment of their market characteristics and perspectives of various functions. Seeking to clarify and understand key insights, the firms’ functional perspectives, customer views, and actual orders were studied. The basic notion was of order winners and qualifiers from Hill’s framework; however, certain criteria have been modified based on the specific case.
3. Gerwin’s framework (competitive priorities)
4. Voss and Blackmon’s framework (competing through the best practices)
From a structured questionnaire followed by a series of interviews, mapping is attempted for manufacturing strategy-related issues in the three firms based on the above frameworks. These issues include:
Manufacturing mission/vision
Methodology used for formulation, development, and implementation of manufacturing strategy
Order qualifiers/order winners
Structural/infrastructural issues
Relative position of the firms in the H&W framework
Firm A
The Setting
The Indian market for two wheelers is the second largest in the world after China. Scooters represented 45% of these unit sales, motorbikes 37%, and mopeds 18%.28 The Indian two-wheeler industry has witnessed a proliferation of entrants into this sector following the liberalization of the economy. The major two-wheeler manufacturers of the world, such as Kawasaki, Honda, Piaggio, Yamaha, and so on, have entered the Indian two-wheeler market.2′ The two-wheeler industry today has a significant role in the Indian economy. With an annual turnover of 155 billion US$ and a compounded average growth rate of 10% in recent years, it is one of the few industrial sectors in a growth phase today. The consumer who wants to be mobile today considers personal transportation as a basic need. In India, the twowheeler is used for a variety of purposes, particularly in urban areas for commuting to work, visiting people, carrying loads, for outdoor jobs, and so on, as opposed to the leisure/fun use common in developed countries. In rural areas, where rough road conditions requires a sturdy vehicle, a two-wheeler enables people to travel more frequently to nearby towns for their daily needs. Younger, single male consumers between 21 and 30 years of age look for power and style and prefer a motorbike for personal transport.
Though 1997 was a difficult recession period for the Indian automobile industry, two-wheeler segments still observed 3% growth. This was due to the robust growth of the rural market. A series of favorable climatic conditions for agricultural commodities increased the purchasing power of rural customers. Today the rural market of over six lakh (600,000) Indian villages contributes about 35% of two-wheeler sales.28 This is the motive for the selection of firm A, a leading two-wheeler manufacturer, in the study.
Firm A operates in a multiplant and multidivisional environment in northern India. It has a collaboration with a leading Japanese motorbike company with a 26% equity share and produces four models of fourstroke motorbikes (coded as MB 1, MB2, MB3, and MB4). The company was established in 1983 and its production rate is 1000 motorbikes/day. Present turnover of the company is 18 billion US$ and market share (Indian) is about 45% in the 100 cc motorbike segment. The company has about 3000 employees.
Previous Approach
Before liberalization ( 1991 ) in India, firm A was following industry practice due to the license regime in India. Much time was spent in moving papers from one department to other. Total production of vehicles was 42,000 per year, whereas booking of vehicles (demand) was nearly 500,000. The decision-making process was centralized due to rigid vertical integration.
Present Approach
After liberalization, due to intense competition spurred by the entry of multinational companies, the CEO of firm A, in consultation with group and division heads, set a vision and mission for the company. Vision: To be the leader in the motorbike sector by following world-class practices.
Mission:
Continue efforts for the development of the motorbike industry through new product development, technological innovation, investment in equipment and facilities, and efficient management.
Develop core competencies and human resources to become market leader in economical and dependable transport systems.
The firm has developed a testing facility, spending 1 % of total sales on research and development. Ninety percent of the testing is done locally. Most of the machines are the computer numerical controlled (CNC) type.
Manufacturing Strategy Development Methodology
Figure 1 shows the formal procedure of manufacturing strategy development at firm A. Broad strategic objectives are formulated at the corporate level to provide a set of expectations for lower-level strategy formulation, such as for marketing and manufacturing. Plant-level manufacturing strategy is formulated by manufacturing personnel of various plants to set the norms for division-level manufacturing strategy. Assessment of manufacturing objectives is made through a monthly meeting of division heads. Figure 2 describes the manufacturing strategy implementation procedure adopted by firm A.
Observations
In the eight years since liberalization in India, firm A has started thinking rationally toward alignment of its manufacturing and marketing strategy. Clearly, in spite of having good demand (500,000 units), the firm could produce only 42,000 vehicles in a year. With a clear-cut vision and mission and top-management commitment, the company has developed a manufacturing strategy to develop enough technological capabilities to take maximum leverage from the resources committed to the technology of the firm’s products and processes. To support this strategy and meet the market demand, the decision was made to start one more unit within a 50-km area of an existing plant.
Before 1991, the firm was in stage II (according to the H&W model) because it followed industry practice, emphasized short-term performance, and manufacturing was reactive and unfocused. After formulating a manufacturing strategy, the firm plans to reach in the direction of stage III organizations. The following points indicate this future direction:
Functions of the firm are well integrated.
Manufacturing investments are screened for consistency with business strategy.
Vendors are motivated to take up innovative ideas for implementation to bring down or maintain the cost and to improve the quality of the component.
New product development time is reduced; for example, three models-MB2, MB3, and MB4-have been developed in seven years. This is done by utilizing CAD/CAM.
Environmental concerns have now been given weight by avoidance of waste, pollution control checks, an effluent treatment plant, and by carefully selecting environmentally friendly process technologies.
The firm uses various advanced manufacturing technologies like robotics (for welding and sheet metal processing), CAD, CAM, concurrent engineering, and automated material handling systems.
The firm aims to use flexible manufacturing systems (FMSs) in which motorbikes will be produced in small batches without sacrificing the elements of scale.
The whole organization is networked through the use of information technology.
The firm won a National Productivity Council (NPC) award for the automobile sector.
In the last three years, there is an increasing trend observed in market share and sales turnover, each up by 10%.
A cost reduction strategy has been identified by a reduction in production costs, increase in labor productivity, reduction in inventory, and increase in capacity utilization.
Order qualifiers and winners identified for firm A are as follows:
Order Qualifiers
* Competitive price
*On-time delivery
* Product quality
*Useful life
Order Winners
*Excellent mileage
*New Product development
*User friendliness
*After-sales management
Firm B
The Setting
The company is a leading manufacturer of technologically advanced automotive components and assemblies in India. Its products (such as steering systems) are used in passenger cars, jeep vehicles, and light commercial vehicles. The product range covers steering systems, propeller shaft assemblies, rear axle assemblies, and different subassemblies. The firm has technical and commercial links with a leading Japanese company. It is an ISO 9002 certified company and is situated in northern India. The company was established in 1985 and started production in 1987. Annual turnover is about 4 billion US$. Firm B enjoys a 49% market share, and it supplies components to leading Indian automobile companies. The firm exports about 10% of total sales. It operates in a multiplant environment and has eight units in different parts of the country. The number of employees in the firm is about 1000.
Mission: To become a world-class quality supplier of auto components.
Manufacturing Strategy Development Methodology
Figure 3 shows the process of manufacturing strategy formulation adopted by firm B. The firm produces steering system components for all types of vehicles. The CEO and plant heads frame the corporate strategy after assessment of market demand and manufacturing capabilities. This is being reviewed annually. These people set the manufacturing objectives for each plant, and then the manufacturing heads of various plants meet and formulate the plant-level manufacturing strategies.
Observations
Firm B is presently in transition from stage II to stage III in the H&W model because it has adopted the following strategies:
Identify world leaders in technology
Energize employees through education and training
Invest in human resource policies by providing training in areas of housekeeping, statistical process control (SPC), and quality function deployment (QFD)
Considerable investment in R&D expenditure (about 5% of total annual turnover)
Use of CAD, CAM, CNC, DNC, TQM, Kaizen, etc.
Systematic technology management
Critical Success Factors
Clarity of mission
Skilled and flexible workforce
Focus on training of workers
Indigenous vendor development
Effluent treatment plants toward environment friendly techniques
Elimination of waste
Full customer satisfaction
Order Qualifiers
*Competitive price
* Product quality: product reiability, product durability
Order Winners
*On-time delivery
Firm C
The Setting
Firm C is a medium-sized organization located in north India. There are 450 employees. The company has an ISO 9001 certification and produces electronic energy meters and hybrid microcircuits. The firm has technical collaboration with an UK-based company. Its annual turnover is 5 million US$, and the main customers are government and manufacturing industries. The firm was established in 1995.
Mission:
* To offer the best quality products and services conforming to national and international quality standards at competitive prices as per the committed delivery schedule.
* Total customer satisfaction by meeting the customer needs and, wherever possible, exceeding the customer’s expectations through continuous improvements in product and services and systems.
* Human resource development and growth through continuous motivation and training.
Manufacturing Strategy Development Methodology
Firm C is the smallest among the firms in this study. It operates in a single-plant environment, and it follows an informal method of manufacturing strategy formulation. Top management (includes managing director, marketing manager) formulates the business goals, which are used for drawing manufacturing objectives in consultation with the production manager of the plant (Figure 4).
Observations
Firm C seems to be in stage Il of the H&W model. The following points indicate this:
The company’s aim is to achieve parity with competitors.
Capital investment is the primary means for catching up with the competition.
As a strategy, firm C has collaborated with leading academic institutions for problem solving. The results are in terms of increasing trends in market share and sales turnover. The company has exports of about 12% of total sales. The firm uses CNC machines and CAD as advanced manufacturing technologies. The company has started a regular system of monitoring plant performance.
Order Qualifiers
*Competitive price
*Product quality
*On-time delivery
Order Winners
User friendliness
* Attractive packaging
* Design flexibility
* Consistent soldering
* Excellent thermal management
* Miniaturization of circuits
* Secrecy
Discussion and Concluding Remarks
This paper has reported on the practices of manu- facturing strategy in three Indian firms. Highlighted were a number of interesting aspects of manufacturing function and strategy in three companies that were different from each other in nature and product range. A summary of the main features of the firms is given in Table 5. All three firms A, B, and C have definite manufacturing missions. Firm A could be placed in stage III of the H&W model, that is, internally supportive. Its motorbike is quite popular in local markets. Due to excellent mileage per liter, the motorbike has 49% market share in the two-wheeler market segment. Firm B, an automotive component manufacturer, could also be placed in stage III, internally supportive. Firm B is gradually improving and has increased its market share up to 45% in steering systems and suspension system components. Firm C is a new entrant in the market, starting production in 1995. It is a learning organization and could be placed in stage II. Due to a clear-cut mission and teamwork of employees, it is a fast-growing enterprise. Various manufacturing strategy related attributes of these firms are summarized in Table 6.
All of the firms in the study have shown awareness toward manufacturing strategy. They have gradually changed themselves to face fierce competition. Competitive price and quality are the common order qualifiers for the firms. Order winners for the firms are different due to product nature and product range. A comparison of manufacturing strategy practices and action plan for the firms is presented in Figure 5.
The following observations are made based on the study:
1. Before the process of liberalization of the Indian economy, most of the Indian managers were occupied with simply selling goods through the process. This scenario was characterized by production schedules in the face of unreliable machines, uncooperative workers, “fire-fighting” middle-level managers, and shortsighted top management. The short-term orientation was due to the high cost of capital, frequent government policy changes, and a highly protective environment. Today, however, the scenario is different and is driven by competition.
2. The organizations are motivated to think in long-term implications. Manufacturing strategy has thus become imperative. This long-term orientation is reflected in terms of an organization’s emphasis on building market share instead of short-term profits (see for example the focus of firms A and B), making manufacturing a strategic priority (firms A, B, and Q, deployment of continuous improvement strategies (TQM, Kaizen in firm B), closer supplierbuyer relationships, total productive maintenance, and so on.
3. The firms have the knowledge of what needs to be done at the top level (firms A and B) and at the operational level. The firms are adopting a strategy to have action plans in place. These firms have realized the importance of proactivity of the manufacturing function. The linkage between manufacturing, marketing, and R&D seems to be in place.
4. The H&W model describing four stages along a “continuum,” which represents the evolution of manufacturing’s strategic role, is used in this paper as a platform by which proactive involvement of manufacturing in the firm can be calibrated. The three firms A, B, and C are mapped into this model.
5. The study reveals that firms A and B have qualified for quality, and now their competitive priorities are innovation, cost, and flexibility, whereas firm C has quality as its top priority. Similar to firm C, many other Indian firms are still at the quality stage, whereas firms from other developing countries, such as Hungary, Brazil, and so forth, are trying for flexibility.
Figure 6 shows a conceptual model of manufacturing strategy based on the three cases reported here. The aim of manufacturing strategy formulation in any organization is to achieve competitive priorities decided by market forces, competition, and external environment. Manufacturing strategy has to resolve two basic issues, structural and infrastructural. Structural issues include capacity, facility, technology, and vertical integration. Various infrastructural issues are related to human resource policies, quality policies, workforce planning and control, organization measurement, use of information technology, and so on. To achieve the competitive priorities, the role of infrastructural issues is very important. Top management must give its attention to improve on these issues rather than just keeping the equipment running. Infrastructural issues are intangible in nature and are developed over a certain period of time through persistent, day-to-day effort. A coherent infrastructural policy takes time to build, can be difficult to change once in place, and in many cases provides the company’s primary source of advantage. An action plan is required to translate the manufacturing mission into reality; such a plan is expected to be market and product specific.
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G.S. Dangayach and S.G. Deshmukh, Dept. of Mechanical Engineering, Indian Institute of Technology Delhi, New Delhi, India. E-mail: gsd@mech.iitd.ernet.in and deshmukh@mech.iitd.ernet.in
Authors’ Biographies
G.S. Dangayach obtained his bachelor of engineering degree in mechanical engineering from M.B.M. Engineering College, Jodhpur (under University of Jodhpur) in 1985. He completed his master’s degree in production engineering from IT Delhi in 1994. Presently he is pursuing a PhD at IT Delhi. He is a faculty member at Malviya Regional Engineering College Jaipur, in the Dept. of Mechanical Engineering. He has published a number of papers in national and international journals.
S.G. Deshmukh is currently a professor in the Dept. of Mechanical Engineering at IIT Delhi. His current area of research includes manufacturing strategy, supply chain management, and simulation. He has published a number of papers in international journals.
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