The associated graph emphasizes how the planning activities are critical to
the successful transition to implementation.
To remain competitive, manufacturing must continuously improve productivity
and quality while reducing inventory costs and lead times. A corporate
strategy for developing superior manufacturing capabilities is a major step
toward increased productivity and quality. Unfortunately, large capital
investment alone cannot immediately correct problems caused by years of
neglect. Improving a company's manufacturing capabilities is a long-term
process that requires considerable reserves of both expertise and capital.
(Priest, J. W. Engineering Design For Producibility and Reliability. New York:
Marcel Dekker, 1988, p. 51.) Risks exist in the strategic, planning, and
implementation activities. Often, risks flow across each stage, and the
consequence of one risk may become a risk to a later stage.
Strategic decisions set the framework for long-term planning and action.
Considering the full range of possible solutions can prevent strategic
alternatives from being overlooked. A lack of understanding and awareness will
result in short-sighted decisions or solutions that fail to address the real
set of problems at hand.
"A framework for strategic analysis is an attempt to summarize the entire
range of activities involved in determining alternatives for the strategic
allocation of resources." (D. R. Zeimer and P. D. Maycock, "A Framework for
Strategic Analysis," in Corporate Strategy and Product Innovation, Robert R.
Rothberg Ed., Free Press : NY, 1976, p. 87.)
Table 2 summarizes strategic risks and consequences that can be
Table 2. Strategic Risks and Consequences
|No Strategic Planning
||Strategies not formulated
|Difficulty in obtaining mananagement support
|No attempt at continuous improvement
|No consideration to make-buy decisions or contract manufacturing
|Alliances, partnerships, or acquisitions not considered
|Unrealistic expectations cause poor solutions
|Manufacturing's role not Understood
||Manufacturing not integrated into the development process
||Manufacturing not considered important to corporate and business unit
|Training Not Considered Improtant
||Management does not understand impact of decisions on manufacturing
|Workforce does not perform efficiently and effectively
|Line and staff workers do not understand impact of manufacturing on business
|Resources and capabilities not examined and understood
||Poor allocation of personnel, facilities, and money
|Facility needs not examined or understood
||Necessary manufacturing processes not identified
|No evaluation of alternatives such as focused factories, flexible manufacturing,
|Inventory and material handling needs not addressed until it is too late
|Type, space required, and location of site not identified in time
Ineffective planning hinders performance. Effective planning requires
flexibility and consistency with strategic decisions. If linkages between
strategic activities and other planning activities are not maintained,
assumptions and decisions cannot be verified. Similarly, implementation
activities need to provide feedback to identify and correct errors in
planning, or to provide redirection in order to keep activities aligned with
Table 3. Planning Risks and Consequences
|Manufacturing Management Efforts Not in Place
||No manufacturing planning, or planning starts too late
|No manufacturing plan developed
|Manufacturing risks not identified and mitigated
|Manufacturing Not Tied to a Concurrent Engineering
or Integrated Product Development (IPD) Effort
||Manufacturing plan has no connectivity and feedback with transition
|Manufacturing plan has no connectivity and feeback with risk
|Producibility not considered during design
|Ineffective manufacturing process engineering
|Iadequate flow-down of requirements, plans, policies, strategies,
standards, etc. to sub-contractors
|Reliance On Technology as the Only Solution
||Money is thrown at problems
|Focus on technology and initiative implementation
|Dependence on automation to solve problems
|No Consideration to Factory Improvements, Special
Tools, Special Test equipment, Process Qualification, and Process Operations
||Site is not adequate to help meet cost and schedule objectives
|Manufacturing process is inefficient and ineffective
|Cannot properly build and test the system
Poor preparation and planning leads to reactive decision-making, whose
implementation does not adequately reflect strategic objectives. Managers may
not have the proper resources to make in-process corrections. Reality can be a
difficult and expensive lesson, leading to a game of catch-up rather than
improvement and innovation.
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Table 4 summarizes implementation risks and consequences that can be
Table 4. Implementation Risks and Consequences
|No Management Support
||Resources not allocated
|Lack of Continuous Improvement Tools and Methods
||Process improvements only happen once, if at all
|Data collection absent or insufficient
|Process monitoring and control absent or insufficient
|Design, Manufacturing, and Test Function Independently
||Cost, quality, schedule, and performance requirements may
not be met
|No Configuration Management and Change Control
||Wrong design may be released to manufacturing
|Different areas (e.g., design, test, manufacturing, logistics)
all working with different sets of requirements)
Keys to Success
Strategic manufacturing planning is not trivial. However, by implementing
an effective strategic manufacturing planning process, companies can become
more competitive within their markets.
It should be noted that the principles and practices associated with a
successful implementation of the strategic manufacturing process are not
unique to any industry. Manufacturing, when viewed as a competitive weapon,
provides a good base for responsiveness and flexibility.
Implement Strategic Planning and Management
Strategic planning and management is a process defined as "the set of
decisions and actions resulting in the formulation and implementation of
strategies designed to achieve the objectives of the organization."(Pearce and
Robinson, p. 4.) Manufacturing decisions impact the day-to-day operations of
any organization that produces products. Strategic manufacturing planning must
be integrated with the overall strategic management process if manufacturing
is to help achieve objectives.
Decisions regarding such issues as resources, partnerships/alliances (both
internal and external), education and training, manufacturing objectives, and
finance are strategic issues. All these efforts must be coordinated and
consistent with those of all others in an organization, regardless of their
place in the strategic hierarchy.
Furthermore, clearly defined corporate missions, objectives, strategies,
and plans must be documented and communicated to all levels of the company.
This job must be carried out by top management, who also provide the
leadership and direction for all to follow. Strategic planning and management
is an iterative process requiring constant monitoring, evaluation and updating
of plans and strategies.
Maintain Consistency, Connectivity, and
Communication Across all Functions
As mentioned, strategic manufacturing planning includes strategic,
planning, and implementation activities. For a successful completion of the
process, feedback is critical for making corrections and keeping the
manufacturing objectives aligned with those of the business unit or
corporation. Additionally, the results of these activities provide valuable
information and lessons learned for future endeavors.
Maintain Links with a Formal, Dynamic Transition Plan
An important item in any project is the existence of a transition plan. The
Transition Planning reference guide discusses the risks and keys to success in
developing a transition plan.
A transition plan is a roadmap for a program. Its main purpose is to
integrate the requirements of the design, test, production, facilities,
logistics, and management functions into a cohesive plan that minimizes a
project's cost, schedule, and technical risks.
The transition plan provides the link between the manufacturing plan and
all other program plans. In order to minimize risks, the manufacturing plan
both receives input from and provides feedback to the transition plan.
Implement a Concurrent Engineering Philosophy
A concurrent engineering philosophy stresses the integrated design of
product and process throughout an entire product's life cycle.
Whether program development efforts are referred to as concurrent
engineering or integrated product development, coordinating the design of
product and process is critical. Design, test, and manufacturing functions do
not occur discretely. If a product is to be designed, tested, and built to
requirements, it requires a team effort, with each discipline sharing and
communicating concerns and feedback.
In strategic manufacturing planning, items such as special tooling, special
test equipment, process plans, and facility concerns require consideration as
early as possible. Additionally, much of the tooling and test equipment needs
to be designed concurrently with the product and manufacturing processes. It
is important that team composition reflects these concerns.
If a concurrent engineering philosophy is to flourish, configuration
management and change control must be present. Design revisions must be
adequately documented and communicated so that everyone is working on the same
set of requirements.
Implement Continuous Improvement
Changes in technology, processes, and customer needs demand constant
attention if a company is to remain competitive and profitable. Continuous
improvement stresses tools and methods to help identify areas of change,
opportunities for improvement, and plans to implement improvement.
By taking a process-oriented approach to continuous improvement, it is
possible to map out the process in some usable fashion (e.g. a flow chart).
This exercise serves several functions: it forces a team to think about the
way the process works, identifies missing pieces to the process, and
identifies value-added and non-value added functions. With this information in
hand, a team can map out a plan for improving the process.
As the name suggests, continuous improvement is an on-going task, requiring
diligence, discipline, and patience.
Ensure Proper Data Collection and Data Management
Continuous improvement requires collecting and using data to drive
improvements, facilitate process control, and indicate areas of excessive
variation. A well-defined process and a set of measures or metrics, when
analyzed, can provide a statistical measure of a process' performance.
Examples of the types of data that can be collected include part yield, number
of defects, operator hours, part costs, and material flow.
Statistical analyses can provide valuable information regarding:
variability in the processes, which processes need improvement, and root
causes. With this information, it is possible to perform such tasks as a
robust design on a process to reduce its variability.
Data collection and analysis is not a one-time affair. Management of data
is essential if statistical analyses are to be of any value.
Emphasize Training and Education
In his book Out of the Crisis, W. Edwards Deming presents 14 points for
management, and industry in general, to follow if they are to increase the
quality and productivity of the people and processes they manage. Of those
points, two specifically address the importance of education, training, and
It has been suggested that of the possibilities for improvement, management
is responsible for 85%-94% of them. (Scherkenbach, William W., The Deming
Route to Quality and Productivity: Road Maps and Roadblocks, CEEPress Books :
Washing, 1988, p. 101.) (Deming, W. Edwards, Out of the Crisis, Massachusetts
Institute of Technology : Cambridge, MA, p. 315.) Similarly, Juran has
proposed the "Pareto Principle," (Juran, Joseph M.,Managerial Breakthrough,
McGraw-Hill : NY, 1964, p. 44.) which emphasizes the vital few things that
must be addressed individually and the trivial many that can be addressed as a
If management is not capable of distinguishing possibilities for
improvement, or cannot identify the vital few, it is unlikely that they will
have a good background for making sound strategic decisions. It is critical
for everyone to understand the implications of their decisions and
Education and training serve to provide all employees with the proper
knowledge base for making informed decisions. As with continuous improvement,
training is not a one-shot thing. Due to the dynamic nature of business and
technology, all employees must be kept up to date and aware in order to remain