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A contingency approach
John Mills, Ken Platts and Mike Gregory
University of Cambridge, UK
Introduction What is a manufacturing strategy nowadays – is it world-class, lean production, JIT, cells or TQM? Is it none of them, some of them or all of them? How do these popular strategies align with Skinner’s notions of manufacturing objectives and strategic decision areas? How can strategies that promote single status, teamwork and empowerment be squared with the top-down, “planning” strategy processes that develop and apply them? These questions should concern manufacturing strategy researchers. Manufacturing strategy researchers, with rare exceptions, have continued to make their own way, drawing little from the closely related fields of business strategy economics and organization behaviour. In addition, again with rare exceptions, researchers have addressed neither the incorporation of popular strategies within their traditional frameworks nor the potentially necessary extension of those frameworks. There is thus a need to review manufacturing strategy and related research in order to identify useful knowledge that can be used to build on existing manufacturing frameworks. Such a review needs a focus and the design of manufacturing strategy processes has been chosen as the focus for this article; the review has therefore been structured to draw out those factors that have been observed to influence the strategy process and, therefore, its design. In order to achieve this aim the traditional manufacturing strategy “process and content” framework[2,3] has been extended. The review then adds flesh to the framework and finally the framework’s ability to assist in the design of a manufacturing strategy process is tested. First, however, manufacturing strategy is set in the context of other strategies and manufacturing’s potential strategic roles are described. Manufacturing strategy in context In business the word “strategy” is commonly used at three levels: (1) Corporate strategy – what set of businesses should we be in?
This paper was produced during the research project – Manufacturing Strategy and Performance Measurement – sponsored by the ACME Directorate of SERC, Grant GR/H 21470.
Manufacturing strategy processes 17
International Journal of Operations & Production Management, Vol. 15 No. 4, 1995, pp. 17-49. © MCB University Press, 0144-3577
(2) Business strategy – how should we compete in XYZ business? (3) Functional strategy – how can this function contribute to the competitive advantage of the business? Within this hierarchy, manufacturing strategy can appear in two places, first at the corporate level, taking a broad view over a set of related or separate businesses. Second, it can appear as one of the functional strategies at the business level and it is with this level that this article is predominantly concerned. Manufacturing strategy has been defined as “the effective use of manufacturing strengths as a competitive weapon for the achievement of business and corporate goals”. Manufacturing’s strengths are developed and sustained by a “pattern of decisions” as originally proposed by Mintzberg. These are taken in a set of decision areas (for example) which encompass manufacturing strategy and are aimed at achieving manufacturing goals that align with business and corporate goals. It has also been recognized that manufacturing can contribute to business strategy in more than one way. Hayes and Wheelwright suggested four stages in the development of manufacturing’s strategic role: (1) Internally neutral: the objective is to minimize the negative impact of the manufacturing function. (2) Externally neutral: the objective is to maintain parity with competitors, usually by following industry practice. (3) Internally supportive: manufacturing exists to support business strategy. Manufacturing investments are checked for consistency at the business level and the implications of business strategy changes for manufacturing are considered. (4) Externally supportive: manufacturing capabilities shape business strategy in terms of the types of products developed and the ways in which markets are addressed. Manufacturing leads rather than follows and long range programmes are implemented to acquire capabilities in advance of needs. The most common target in the literature has been stage three[11-13]. However, growing interest in the learning organization[14,15], “core competences” and capabilities competition may provoke more interest in stage four. Empirical studies on the strategic role of manufacturing have shown that up to 50 per cent of respondents believe their role is at stage three[18,19]; that there is confusion surrounding the terminology of the subject[18-20] and that within most firms manufacturing strategy was neither visible nor obvious. Thus the subject still has some way to go to prove its worth in many manufacturing companies.
The manufacturing strategy process framework This section proposes a framework for reviewing and analysing the factors relevant to the design of a manufacturing strategy process. The most common manufacturing strategy framework has consisted of “process”, or how strategy is made, and “content” – the constituents of a manufacturing strategy[2,21]. Matthews and Foo extended this framework to “process, content, performance, consistency and implementation”. Other frameworks are available from the business strategy literature, for example Pettigrew’s framework of “process, content and context”. Pettigrew’s use of “process and content” was similar to that used by Leong et al. and Anderson et al.. His view of “context” included both external factors such as sectoral, economic, social, political and competitive environments and internal factors covering the enterprise’s structural, cultural and political facets. The proposed amalgam of these frameworks is shown in Figure 1. The central focus is the manufacturing strategy process, the design of which is contingent on the content model(s) chosen and the required qualities of the outcome of the process. The latter element is taken from Matthews and Foo whose “performance and consistency” are examples of criteria used to assess the process output. For a framework required to capture influences on the strategy process this extension to the traditional “process and content” framework includes important strategy process design criteria. The second extension is the internal and external context described by Pettigrew which can enable many of the contingencies studied in the business strategy literature and rarely used in the manufacturing literature[1,2] to be included. Attention will be drawn to these effects as the detailed framework is built. Manufacturing strategy content This element of the framework describes the majority view found in the manufacturing strategy literature plus potential extensions and modifications to that view in the content areas of manufacturing’s objectives and decision
Manufacturing strategy processes 19
Manufacturing strategy content
Manufacturing strategy process Internal context External context
Qualities of the process outcome
Figure 1. The outline manufacturing strategy process framework
cost and flexibility sequentially. become a contentious issue. however. generic and “best practice” strategies has been incorporated. as detailed in Schonberger and the empirical data collected by the Manufacturing Futures survey. however. He argued that while no manufacturer can double its product range tomorrow without increasing cost this may well be possible over a longer period. 20 The debate has continued to run. they have been refined to more detailed levels. The right strategy has no optimum. including Schonberger. Wheelwright questioned this assumption.IJOPM 15. Nakane’s theory may explain how trade-offs can be overcome and this view is partly supported by Slack who entered the time dimension into the debate. The interaction between objectives in the form of trade-offs has. Both Hill and Platts and Gregory have suggested that the basic four objectives can be tailored to the individual organization. 21). With the growth in knowledge of Japanese manufacturing techniques through the 1980s. Manufacturing objectives: the majority view Skinner defined manufacturing’s objectives as cost. delivery and flexibility and indicated that there were trade-offs between them. This connects with the continuous improvement philosophy espoused by many. only continual improvement in all things (p. a specific performance objective for one company may be product flexibility – the speed with which new products are introduced or existing products are modified. who stated in 1990: World class strategies require chucking the(trade-off) notion. delivery and flexibility are discussed in Neely and Wilson. having noted that many Japanese managers seek to improve quality and reduce costs simultaneously. For example. In this way the literature on competence. The fourth . In 1969 Skinner believed it impossible for manufacturing to make a wide range of high quality and low cost products quickly. time. as Slack pointed out Schonberger has challenged the conservatism inherent in the trade-off assumption. These essentially external objectives have survived the attention of numerous researchers to this day. However. for example flexibility can be further defined and measured in many ways and the detailed dimensions of cost. quality. more questions were asked. Nakane hypothesized that Japanese managers attack quality.4 areas. Measures and targets in this area become part of such an organization’s manufacturing objectives. quality. Manufacturing objectives: potential additions The manufacturing objectives described above can apply to any of the Hayes and Wheelwright four stages of manufacturing’s strategic role. Managing and marketing directors may now be less likely to be persuaded by manufacturing directors that they cannot have high quality and low cost at the same time.
Table II compares Skinner’s listing and Wheelwright’s framework for manufacturing strategy with the decision areas chosen by several researchers[28. e. Though many writers in the field have developed their own set of manufacturing decision areas. While the future implementation of new capabilities may be supported by the traditional externally oriented manufacturing objectives. However the competence need not be technologically based and could be the integration of a set of managerial skills in a business process[17. The balance of research in these decision areas has moved from a concentration during the 1970s and early 1980s on the so-called structural or hard aspects of strategy. The realization of the importance of these “soft” aspects of strategy was first documented by Skinner: In a nutshell. and these internal elements are proving more Manufacturing strategy processes 21 Decision area Plant and equipment Production planning and controls Labour and staffing Explanation Plant size and location. may require additional types of objective since this stage is aimed at providing new capabilities which may shape business strategy in terms of the types of products developed and the ways in which markets are addressed. inventory and quality control Wage systems. Such objectives might cover the acquisition of knowledge and application leadership of a particular technology or technology combination. development policy Management style. Manufacturing’s strategic decision areas . incentive schemes. the development of new capabilities is likely to require internally oriented objectives. supervision style and size of manufacturing engineering staff Product variety. process technology. 29. degree of specialization. communicating.stage. size of staff group Product design/engineering Organization and management Source:  Table I. agreement is generally high. degree of vertical integration and choice of manufacturing process Planning. organization. Manufacturing strategy decision areas: the majority view Manufacturing objectives are achieved through a pattern of actions in a set of decision areas and Skinner’s original list of decision areas is shown in Table I. organization form. externally supportive. performance measurement.g.35]. size and manufacturing process choice. management style. design stability. towards the infrastructural or soft aspects e. 37-39].g. scheduling and supervising make up the infrastructure of our plants. plant location. our methods of decision-making.
22 IJOPM 15. Manufacturing decision areas Schroeder Plant capacity Plant location Process technology Make or buy Quality assurance Production planning Quality Capacity Capacity Facilities Process Technology and processes Process positioning Vertical integration Vertical integration Capacity Facilities Technology Plant and equipment Plant and equipment Plant and equipment Plant and equipment Hill Hayes et al.4 Table II. Fine and Hax Skinner Quality assurance and control Manufacturing planning control systems inventory Quality management Manufacturing infrastructure Production planning and control Production planning and control Production and inventory control just-in-time New product introduction Management of people New product development Work structuring Workforce. Payment systems performance Clerical procedures measurement and reward Organizational Organization structure Manufacturing systems Engineering function support Scope new products Human resources Product design engineering Labour and staffing Suppliers Manufacturing organization Vendor relations Organization and management Information systems Performance measurement Decision areas Platts Structural Capacity Facilities Process and technology Span of process Infrastructural Quality Control policies New products Human resources Suppliers .
product or process based. perhaps.44] wrote on the important links between process and product life cycles and the literature on quality policy was particularly rich. supplier evaluation. the gap identified in the literature by Voss and Adam and Swamidass concerning the interaction between different decision areas is still large and much remains to be done. most writers during the 1970s and early 1980s concentrated on individual areas of content. In a survey of UK SMEs when respondents commented on the content of their strategies. Voss recognized that the successful introduction of advanced manufacturing technology was not just an engineering task. One potential alternative to the majority view is also discussed in this section – a business process framework for manufacturing strategy. impact on new product introduction.53] have taken a multidimensional view covering the firm’s manufacturing technologies and processes (current and future). Nevertheless. however. Hayes and Wheelwright[43. for example manufacturing processes and manufacturing control systems and the impact of human resource policies on the implementation of manufacturing control systems. three potential additions to the majority view on manufacturing strategy decision areas. empowerment. Hill invented the important notions of order-winning and orderqualifying criteria and connected them with manufacturing process choice. Schmenner investigated economies of scale. Manufacturing strategy decision areas: potential additions and alternatives There are. capacity and facility decisions. exceptions. Indeed the vertical integration decision area may be fundamental to other decision areas since it should identify what the firm has to manufacture itself and why. More recently interactions between decision areas have been studied. losing the holistic perspective Skinner had encouraged. The first is the integration of popular. JIT and total quality were the most regular descriptions of manufacturing strategy . MRP II. Best practice strategies.resistant to change than the purely technological ingredients on which factory managers and engineers tend to focus. There were. After identifying the system’s operational and business objectives it was necessary to amend organizational controls to support the system’s performance objectives and specify the organizational integration required to enable the manufacturing control systems to support the new system’s objectives. Writers on vertical integration[52. Hayes and Schmenner looked at factory organization. Each of these strategy descriptions (and at least two multi-dimensional strategies. it was uni-dimensional strategies that were most in evidence. The second is the generic approach to manufacturing strategy and the third is the inclusion of recent work on competence and capability. In addition. lean Manufacturing strategy processes 23 . best practice strategies like JIT and TQM with traditional decision areas – a gap noted by Adam and Swamidass.
best practice strategies do not cover all the strategic areas within manufacturing and if this is not realized and an overall strategic context is absent best practice strategies may fail.IJOPM 15. As conditions change over time. For example. for example. The first is predominantly survey or case based. The main studies include: q An examination of 100 case studies. the implementation of cells normally involves decisions and actions to invest in more equipment and to update manufacturing control systems. However. these strategies can be considered as bundles of actions in certain majority view decision areas. which tend to work well together. carried out by Stobaugh and Telesio. in which results are analysed by cluster techniques to identify sets of companies following similar or generic strategies.4 24 manufacturing and world-class could be added) can be gathered under the heading “best practice” strategies. manufacturing is likely to continue to be reliant on external help to adapt its manufacturing policies to new situations. Therefore successful implementation partly relies on developing an integrated and consistent set of actions from the majority view decision areas that are appropriate to the best practice theme(s) chosen and the existing policies in manufacturing. there may be two disadvantages for the business in the application of such strategies. whether manufacturing strategies are shaped by markets or other forces. Second. often did not live up to expectations. Generic manufacturing strategies. Past best practice strategies. First. perhaps by incorporating best practice strategies within a more comprehensive framework then they are likely to follow rather than lead. modifications to improve the fit may be preferable to a potentially more timeconsuming process to create a bespoke strategy. Most of these strategies may be appropriate for most manufacturers at particular times and for a length of time and their accessibility via conferences. Best practice strategies may also be compared to ready-to-wear suits. . Such a following role may. organization and certain cultural factors if full benefits are to be obtained. There have been two streams of research on generic manufacturing strategies. the implementation of best practice strategies alone is unlikely to develop manufacturing’s ability to create and understand its own strategy and this may be especially so if external consultants deliver packaged solutions. publications and consultancy may explain their popularity. technology based and market driven. be entirely natural if manufacturing’s strategic role is at Hayes and Wheelwright’s stage one or two. noone expects managers to know how to make their own suits and if a firm’s managers do not consciously develop their own strategy. like MRPI or advanced manufacturing technology. This strategy is not simply a re-layout of the manufacturing process. identified three groups of international manufacturing strategy – cost based. unlike strategies. however. From such an analysis performance differences between the clusters may lead to new perspectives on manufacturing strategy. In essence. However.
The extremes of these dimensions are used to define a set of theoretical generic strategies that match Porter’s model of generic business strategy. Empirical support has not been published for this framework. One framework. however. product line complexity and organization scope. The “laws” of business that seem to define the strategic positioning and competitive behaviour in this and other taxonomies have all been based on observations of the business environment during a short 20 year span. reorganizer. the need to make fast production plan changes and achieve fast delivery. Ideas on competence and capability emerged before the second world war in the writings of the “Austrian School” of economics. and in different parts of the world (p. Like those using the experience curve approach to product families. Another framework proposed four generic strategies which are based on blending the empirical studies described earlier with other studies and his own case-based research. This group emphasized top performing products. hard to change . innovator and marketeer. Teece et al. 12. For example. 27). 57. proposed by Kotha and Orne uses three dimensions: process structure complexity. then we may anticipate that new manufacturing strategic groups will be formed over time. Table III summarizes work on generic manufacturing strategies[6. This school believed that the source of a firm’s competitive advantage was in unobservable factors (viewed from outside the firm) rather than observable strategic factors. If we suppose that intelligent competitors will use their knowledge of the “normal” rules of battle to better develop new principles of competitive warfare. q de Meyer used results from the European Manufacturing Futures survey to identify three groups – high performance product groups. He also aligned these four generic strategies: caretaker. Sweeney. Manufacturing strategy processes 25 Competence and capability. There are differences between the groupings identified by these researchers. 61. the high performance product group was different to the groupings identified in the USA by Stobaugh and Telesio or Roth and Miller. manufacturing innovators and marketing oriented. notes that each of these roles could be used by manufacturing companies that were implementing any of the four generic manufacturing strategies proposed. marketeer and innovator with Hayes and Wheelwright’s four stages of the development of manufacturing’s strategic role. 58. The second stream of research emphasizes the development of frameworks that should assist in the strategic management of manufacturing. described these factors as “upstream. 62]. Another note of warning on the use of generic strategies has been sounded by Miller and Roth: q Finally an important line of future research is to test the stability of this taxonomy globally. those adopting a generic strategy may create conditions which enable competitors to predict some of their actions.Roth and Miller examined the strategic management practices of 188 North American companies and identified three groups of generic manufacturing strategy – caretaker. idiosyncratic and difficult to imitate resources” and “sticky. and over time.
In the business strategy literature the notion of “distinctive competence” was first described by Selznick. In their view capabilities are superior business processes like dealer handling.IJOPM 15. Their examples included Canon where core competences in precision mechanics. Prahalad and Hamel defined “core competences” as: …the collective learning in the organization especially how to co-ordinate diverse production skills and integrate multiple streams of technologies. or product realization rather than technologically-related competences. and Sweeney Telesio Caretaker Roth and Miller de Meyer Edmondson and Wheelwright Sweeney   The quick Quick fix relief mode of response to manufacturing challenges (1st mode) Stretch Hayes and Wheelwright  Internally neutral 26 Cost-driven Caretaker strategy Marketer Marketdriven strategy Reorganizer Table III. Their examples are from the logistics processes of supermarket chains as well as manufacturers like Honda. It is such “capabilities” that provide superior product offerings on which competition is based. One recent theme addresses the identification and leverage of competences for the business benefit.Innovator Manufacturing To develop a Break driven innovators competitive through strategy edge through manufacturing (3rd mode) (Adapted from ) Marketer Marketing orientated group High performance product group Externally neutral Internally supportive Externally supportive resource bundles”. In this context a distinctive competence is an ability which sets a business apart from its competitors and provides tangible benefits for customers and thus competitive advantage to the business. . Stalk et al.69]. also pursued this theme but distinguished between capabilities and Prahalad and Hamel’s core competences. Generic strategies by researcher name The use of Catch up organizational tools mode of response (2nd mode) Innovator Technology. for example Peters and Porter[60. It has appeared regularly since then.4 Blended generic Stobaugh strategies. who are said to have superior ways of handling dealers. fine optics and microelectronics were said to be used to enter new markets.
To be useful a . Rhodes argued that these processes covered all manufacturing industries and were understandable to all functions in the business. came to the conclusion that the most critical competence differences are to do with the organizational capabilities of the firm. they contended that “production competence” is a function of the production process and the firm’s business strategy. The notion of dealing with manufacturing strategy in the context of business processes may also have advantages for the process of formulating manufacturing strategy and this will be described later. Cleveland et al. This is a developing area which may provide additional decision areas for manufacturing strategy which are appropriate for a firm pursuing a manufacturing-based competitive advantage. proposed that “production competence” is “a manufacturer’s overall ability to support and prosecute the firm’s business strategy”. In other words. however. Porter stated that this area of research was one important. view of capability as a superior business process. This framework of manufacturing strategy content was described by Rhodes and is illustrated in Figure 2. Furthermore. As yet. a technology view of competence reminiscent of Prahalad and Hamel was taken. In other words a view of competence nearer to the Stalk et al. This framework may be a genuine alternative view of manufacturing strategy decision areas despite the likelihood that all manufacturing decisions in each process are likely to find a home in the majority view framework. Manufacturing strategy formulation process The structure of this section uses and develops Platts four aspects of process – point of entry. published material on this framework is rare and it is included as an area with potential for further research. In a critique of Cleveland et al. Hayes and Pisano have begun to address this potentially important area and have clearly addressed manufacturing companies at stage four: Manufacturing strategy is about creating operating capabilities a company needs in the future. Instead of a list of decision areas which focus on manufacturing and which have few interaction guidelines a set of nine business processes is proposed. The confusion in terminology continues but the two strands of what a competence or capability is or is not can be seen in the manufacturing literature. procedure and project management’. Manufacturing strategy processes 27 The business process framework. Vickery proposed that production competence is to do with the efficiency and effectiveness of the manufacturing strategy formulation and implementation process whose aim is to support business strategy requirements with appropriate manufacturing performance.Teece et al. Platts argued that a process was not mere procedure – a set of steps. potential component of a dynamic theory of strategy.. participation. The most interesting new theme in this area is the notion of how competences or capabilities are actually built over time.
easily completed task which would demonstrate to a company that there was a need to proceed with the full process. quality. Point of entry It is necessary for the strategy process to provide a method of entry into the company or business unit and provide a platform to develop the understanding and agreement of the managing group. etc. It was hoped that such mismatches would be startling enough to encourage the whole process to be pursued. delivery. Platts used “competitive profiling” to provide a quick. A manufacturer would be asked independently to sketch how manufacturing actually performed on this product family.IJOPM 15. On the same theme Sweeney proposed a “tactical to strategic management development programme”. The intention was that a marketer would identify a product family and then sketch the profile to represent the market requirements in terms of cost. Functional departments and business processes (g) (h) (i) Customer order progress Supply chain Production processes Product definition and development Process and plant development Motivation and culture Finance and accounts Organization Information and IT Marketing Functions department Producing Assembling Purchasing Designing 28 process should specify how an organization might be attracted to implement the process. Gunn and Hayes and Wheelwright made the point that one of the platforms needed to embark on the strategy process is knowledge. This programme raised the issues of management style and team membership roles and contained a two- Financing Selling . The process often requires training and management development to embed the principles and concepts necessary.4 Business processes (a) to (e) achieving (f) to (i) enabling (a) (b) (c) (d) (e) (f) Figure 2. Mismatches could be easily demonstrated by overlaying acetate films. who should participate in the process and how the project of implementing the process should be managed.
In general other functions have been involved in the strategy process for two main reasons: first for specific activities. perhaps. and the participation of others from outside the business unit. The best must be involved. Platts and Gregory. Participation There are. implementable strategy using the best appropriate knowledge in the organization. three dimensions of participation within the literature – width across the business involving contributions from other functions. Hayes and Wheelwright pointed out that implementors should be involved to help avoid implementation difficulties and noted how rarely this had occurred in their experience. Gunn detailed a number of aspects to be considered when selecting a team to carry out the process. He also noted that in the four cases observed the manufacturing strategy process was initiated by either the manufacturing or managing director. Schroeder and Lahr and Fine and Hax all recommend the involvement of all functions. Leong et al.. their role was important in providing much of the data on customer and business strategy requirements. Garvin described a process whose objective was to increase the depth of participation in the strategy process in order to derive credible. Marketing was central to Hill’s process since it began by identifying order-winning and order-qualifying criteria. such as personnel’s knowledge of the organization. It continued by “work shadowing” managers to record how they spent their time and visits to other factories to see how others had overcome change management problems. Others like Hill and MacBeth have at least the marketing function involved. for knowledge that can be brought to the strategic debate.day workshop on how to manage strategically. The team also needed to contain “political heavyweights” and potential future executives. Participants from outside the business unit are typically corporate specialists or external consultants in facilitation or project modes. thus the strategy process might be usefully initiated at such a time. Leonard-Barton pointed out that many opportunities to question current strategy assumptions were available at the earliest stages of new product introduction. showed empirically that the function most consistently involved in the process was marketing. second. There are potential advantages in using external participants – they generally arrive without the assumptions that members of the business unit carry and Manufacturing strategy processes 29 . Slack viewed the key links being between manufacturing. such as finance assessing the costs and financial benefits of manufacturing strategy options. marketing and product development. Slack involves marketing and product development. At another level Voss asserted that an important responsibility of a company board is to ensure that a process for developing manufacturing strategy exists. a balance of skill and experience with “get up and go” should be planned for. depth of participation within the manufacturing function. Anderson et al.
The stages were operating projects. For the same reasons this perspective may also assist strategy implementation. Procedure Once point of entry and participation issues have been covered.IJOPM 15. The business process framework may have some advantages over the majority view decision areas in the formulation stage. Slack proposed that the decisions on how to close gaps are specific to the organization and its environment and that it is the responsibility of the organization’s personnel to generate an imaginative and practical set of action plans. observed that strategy implementation projects developed through three stages as manufacturing attempted to move through Hayes and Wheelwright’s four strategic roles. This comparison may be across all areas of a decision content model as in Platts and Fine and Hax or it may be more narrowly based. However.39. The output of the audit or data gathering and analysis stage is a comparison of manufacturing performance and current action plans with the requirements of business strategy. no details on how these infrastructural areas might be tackled. The formulation stage is documented in much less detail than the audit stage. Hayes et al. Other writers[37. The “achieving” business processes (see Figure 2) are dynamic and relate to the work people do and the overall tasks the organization must accomplish. The first is typically an audit of current strategy against a set of manufacturing objectives. 30 . Research in an aerospace company indicated that the vertical integration area should be dealt with early in the process since deciding what a firm will manufacture is fundamental to most other decision areas. with suggestions including tackling the highest priority issues first and iterating between strategies in each decision area. Voss found a facilitator present. sometimes seen within an overall improvement plan. at that time. the second stage is the formulation of a set of action plans – the strategy – which is designed to close any gaps identified in the first stage. In each of four strategy process cases studied.4 typically understand and are experienced in the process.83] offer limited input on this stage. for example Hill focused initially on the match of business requirements with manufacturing processes. facilities and human resource management. The final stage is implementation of the action plans. Hill provided a more structured approach. These two stages are not universally separated. stating that the manufacturing process choice should be made before decisions in manufacturing infrastructure but gave. it also places manufacturing strategy in a wide context and can show that improvements in process performance require co-operative efforts from all functions. Sweeney proposed an order of attack that left vertical integration decisions late and devoted early effort to capacity. For this reason the framework may be more understandable than the traditional content model. the major stages in the strategy process are generally threefold. The implementation stage is usually based on the management of a number of projects.
concepts and even new technologies. Implementation is a key issue since strategy is what is implemented not what is speculated.79] have found the process takes rather longer – typically four months. written down or presented[6. Van de Ven has proposed longitudinal studies over long periods to better understand the ongoing strategy process. however little work has been published on this issue. The latter perspective is the one practitioners face and researchers have largely ignored. Their view appears to be based on the adaptive view of strategy formation observed and described by several writers on business strategy. There seems to be a continuum between what could be called the big bang approach of Schroeder and Lahr and the continuous creation view of Hayes and Wheelwright. Adequate resourcing for managing. Qualities of the process outcome Published processes either explicitly state or implicitly assume that the purpose of the manufacturing strategy process is to develop a strategy which will enhance the firm’s competitive situation. Gunn claims six-to-18 months is a more likely time scale given that the group not only have to learn to work as a team. However. supporting and operating groups should be identified. a time scale should be agreed. From this perspective the outcome of the process is a Manufacturing strategy processes 31 . The need to incorporate time into the “manufacturing policy framework” was recognized by Voss. for example Schroeder and Lahr propose two full days to execute their process . Time scales evident in the literature are highly variable. decisions not to do things can be valuable strategic (in)actions since they set boundaries on the enterprise’s manufacturing and/or business strategy.84]. The need has also been recognized by Porter who separated the theory of strategy into the causes of superior performance at a given period in time and the dynamic process by which competitive positions are created. they may have to be suitable for use at any time as part of the normal management process rather than as a separate strategic process carried out at particular times. but have to learn new methods. Hayes and Wheelwright view the manufacturing strategy formulation process as continually ongoing over time.7. others[29.manufacturing system changes and organization-wide changes and reflected the increasing influence of manufacturing’s strategic role. Indeed Voss observed that in two of four cases studied the manufacturing strategy process was begun because of competitive pressures. In addition. Project and process management Platts identified two project management issues from interviews with practitioners on strategy formulation and audit processes. If it is believed that manufacturing strategy is the pattern of actions implemented in manufacturing’s strategic decision areas then since actions may be required at any time then strategy making is an ongoing process. This has great significance for the strategy process and the tools it might use. however.
However in Voss’s two other cases. Both examples indicate a requirement for the process to deliver organizational learning[15.36] has been well supported. q show internal consistency between manufacturing decision areas.38] as well as a strategy. q be consistent with business and other functional strategies. at an automotive parts manufacturer the first purpose of implementing the process was to check the appropriateness of current manufacturing strategy to business requirements and the second to help build a newly formed business team. internal perceptions of lack of focus and consistency led to the initiation of the process and in our research other motivations and purposes have emerged.4 32 strategy. Hayes and Wheelwright emphasized that manufacturing strategy should: q support the firm’s competitive success factors. The importance of consistency between manufacturing strategy and business strategy. the time scales of implementing some strategies can be long and therefore strategy consistency . Yet the most well-documented and tangible outcome remains a strategy or a strategy modification and two fundamental questions must be posed: (1) How can a manufacturing strategy be assessed? (2) What proof exists that having a manufacturing strategy and/or an explicit manufacturing strategy process improves the performance of the firm? Manufacturing strategy assessment Both Hayes and Wheelwright and Slack have proposed criteria for evaluating a manufacturing strategy and a description of an effective manufacturing strategy. appropriate responses. placing the business in a particular market niche. This objective should not be confused with the outcome of the process e.IJOPM 15. marketing strategy. The eventual break was achieved after ten years during which profits reduced markedly. There is one caveat from the business literature. a strategy to reduce the cost of adding value by…. In an aerospace company the purpose of their manufacturing strategy process was: to produce a widely understandable framework for analysing the effect of internal and external changes of requirements and environment on Manufacturing and generate consistent. For example. Slack added the tests of consistency over time and credibility to Hayes and Wheelwright’s criteria. Mintzberg warned that a highly consistent strategy could be very difficult to change and this was particularly true if the strategy was also unique. all functional strategies and the consistency of the individual components of manufacturing strategy with one another[10. In manufacturing. He cited Volkswagen’s difficulties in breaking out of the “people’s car” Beetle mould.g.
however. alternatives are analysed and an Manufacturing strategy processes 33 . The particular titles used here are those used by Mintzberg alone and with various collaborators[7. will achieve higher business performance than companies without a strategy”. to obey. Wrapp.9. each generally inventing new terms to describe similar modes[88-95]. Swamidass and Newell in an empirical study of 35 firms found a positive relationship between the performance of the firm (growth) and the higher the role of manufacturing managers in the firm’s strategic decision-making process.2] that further insight into the strategy process may be gained by using methods and ideas from other fields. exist alone in their pure form[7. The value of a manufacturing strategy In 1992 Tunälv reported a study on 184 Swedish manufacturing businesses which gave empirical support to the hypothesis “companies with a formulated manufacturing strategy. The main field explored in this section is the business strategy literature and its links with the field of organization behaviour. A paradox has emerged here. empirical research on how business strategy is actually formed. although a manager should give the organization a sense of direction. but the case is yet to be proven.over time is desirable.9. adaptive. ideological and grass roots. Alternative strategy processes The most common strategy process modes in the literature are entrepreneurial. if ever. consistency versus future adaptability or precise strategy communication (to assist implementation) versus imprecision in order to retain flexibility. Internal context It has been suggested by reviewers of the manufacturing strategy process literature[1. planning. pointed out that policy strait-jackets are to be avoided and. Of particular interest are the ways in which the (business) strategy process is perceived and the cultural and political contexts within which a manufacturing strategy process resides. They are the result of considerable historical. a certain open-endedness should be retained for flexibility purposes. with respect to organizational objectives and strategy.97]. manufacturing strategy is building. A manufacturing strategy development process must take account of the criteria and cannot ignore the paradox. It is also known as the command mode where it is clear that the role of top management is to provide direction and the role of organization members is.84].84. Entrepreneurial. This area has been studied by several other authors. aligned with the business strategy. Strategy making in this mode is deliberate. This strategy process mode depends on the ability of one individual or a small group to impose their vision of the firm’s role in the world on the organization by direct orders. businesses do not generally benefit from an overly rigid strategy. like soldiers.96. as Slack pointed out. Note also that the process modes described here rarely. The proof of the value of having a formulated.
Skinner emphasized the interdependency of the decision areas within manufacturing strategy. This rational view depended on an analysis of the environmental opportunities and threats. However. and the internal strengths and weaknesses of the organization. .4 34 appropriate course of strategic action is determined. Mintzberg pointed out that this mode “assumes that formal analysis can provide an understanding of the environment sufficient to influence it”. The planning process mode has been the traditional view of strategy development described by. SonyMorita.IJOPM 15.81. while organization members act as “subordinates”. The approach assumed implementation did not occur without systematic. From the manufacturing strategy literature. vertical integration.87. capacity and organization. manufacturing managers have found themselves constrained from above in particular areas of manufacturing strategy – particularly facilities. distinct from formulation and implementation.102]). The process sought to identify action plans which would use the organization’s strengths to exploit opportunities while minimizing its vulnerability to threats.39. This may be because the first stage of a manufacturing strategy process. following the system. Hayes and Wheelwright’s stages one and two could be associated with this mode operated at the business level. Since then the majority of manufacturing strategy design processes have taken an analytic. No specific manufacturing strategy process research has been found to illustrate this process.83. among others. Ansoff. Implementation then took place and consisted of a series of integrated decisions taken across all strategic areas. This mode seems to occur most frequently in young and small organizations which are able to find safe niches in their environments. Indeed Skinner’s 1969 paper included the first diagram showing the systematic. comprehensive analysis and comparison of alternatives mainly judged by financial measures. is the stage most documented and is an analytic stage. This mode has been mostly associated with large companies operating in relatively stable environments and with the teaching methods and consulting style of the Harvard Business School or the “Design School” as Mintzberg described it. Planning. As Hart described – the role of top management is to be “boss”. systematic approach recognizable as a planning process (see [29. evaluating and controlling. Therefore this may be an important mode for SMEs though it can also occur in larger organizations. usually an audit. Ackoff and Andrews. He criticized senior managers for allowing so-called experts to develop strategy and stressed the need for a top-down overview. particularly in crisis conditions in which all actors are willing to follow one leader. The notion of the entrepreneurial chief executive is an attractive one and many large companies have grown through such entrepreneurs (IBM-Watson. Apple-Jobs then Sculley). rational steps required to develop a manufacturing strategy.
Thus interaction with the environment. so that clear realised strategies can be identified. was essential to learn and build frameworks that could aid decision making. In practice. Recently. etc. as yet. customers. In a survey by Digital. Lucas Industries and Rolls-Royce Aerospace have declared manufacturing vision or mission statements but. employees. suppliers. long-term vision and a clear corporate mission. since it required continual dialogue with key stakeholders. in 1978 Quinn described it as “logical incrementalism” and in 1987 Ansoff labelled it “ad hoc reactive”. In 1985 Mintzberg had not studied such an organization but he was confident that such a mode existed in certain charitable institutions and Israeli kibbutzim. for example: q Komatsu’s vision of “Maru-C” – to encircle Caterpillar. This has been a fashionable mode which may not always have been well implemented. Unlike the planning mode where a bold plan was executed. then they are bound to exhibit patterns in their behaviour. More concretely it is in the nature of most religious organizations. little research material has emerged. Hart in 1992 titled this mode “transactive”. The corporate vision gives meaning to the organization’s activities and provides a sense of identity for employees.Ideological When members of an organization share a vision and identify so strongly with it that they pursue it as an ideology. involves the creation by top management of a compelling. Lindblom first described this process mode as “the science of ‘muddling through’”. q Coca-Cola’s vision of putting a coke within “arm’s reach” of every consumer in the world. Hamel and Prahalad coined the phrase “strategic intent” for the long-term mission of an organization and have further developed this mode to encourage the setting of ambitious “stretch” targets to obtain spectacular growth. Hart described the role of top management as that of a “coach”. He described top management’s role as a “facilitator”. Mintzberg in 1973 described it as “adaptive”. but only 39 per cent of these mission statements affected daily work behaviour. later he described it as “disjointed incrementalism”. however. Manufacturing strategy processes 35 This process mode. disjointed steps learning and adapting strategy over time. The use of symbols. empowering and enabling the process of transacting between all . These may be called ideological strategies. reported in the Financial Times 10 May 1993. metaphors and emotion are central to this process mode. Hamel and Prahalad have discerned this mode in industrial organizations. motivating and inspiring organizational members to act like “players” and respond to the challenge. also called “symbolic” by Hart. through experimentation. and cross functionally within the organization. the incremental approach consciously worked in small. opportunity and human cognition that the whole could not be grasped. its primary rival. it defines the basic philosophy and values of the firm.. The approach assumed that the strategy development task was so complex in time. manufacturing plants within companies like Philips Electronics. Adaptive. 80 per cent of UK firms had a mission statement.
developing and rewarding product champions and encouraging team based innovation.4 36 members of the organization whose role is to “learn and improve” and who were viewed as “participants”. Across the range of such strategy-making it was assumed that those closest to customers. Grass roots. The grass roots mode has been found in organizations that require great expertise and/or creativity and business level examples of this mode in action have been the “post-it” development in 3M and Data General’s 32-bit mini computer development. acting as “entrepreneurs”. however. be appropriate at the creative. Less extreme and captured in Mintzberg and Water’s descriptor “umbrella strategy” – was a mode where top management set out broad guidelines within which new product strategies were permissible. integrated approach to manufacturing strategy. However. calling for a more planned. At its most extreme this mode produced unconnected initiatives from independent entrepreneurs – an example of such an organization could be a university. In the business strategy literature the main issue is not whether these modes exist – that is accepted. planning and adaptive modes combined and/or alternated by managers to suit differing conditions as a realistic description of strategy- . This process mode was the antithesis of the planning and entrepreneurial modes. other descriptions are “organic”. second stage of the manufacturing strategy process – formulation. This mode may. here top management’s role was as a “sponsor” exercising little strategic control over the organization. holistic. Examples of such transactive processes are full JIT implementations including the involvement of suppliers and customers and the use of quality function deployment where most functions of the organization and customers are involved in new product specification. Within the manufacturing strategy literature Blenkinsop and Duberley described a case in which the development of one aspect of manufacturing strategy could be argued to have arisen via the grass roots mode. Both the Deming prize and the Malcolm Baldrige Award have been granted partly based on an organization’s demonstration of a strong organizational learning capability fostered by transactive relationships among suppliers. Strategy process mode summary and issues Table IV summarizes the modes discussed earlier. Strategy initiatives emerged from individuals who. experimented and took risks. “generative” and “bottom-up”.IJOPM 15. Hence the importance of identifying. Skinner criticized this mode. filtering out less promising ideas. The issue is whether particular combinations or configurations of modes are superior to others in particular circumstances. customers and employees. Mintzberg regarded the entrepreneurial. this mode assumed that top management could recognize high potential projects from those that were not and then shepherd them through the organization. for example “Skunk works”. product and process technologies would produce the best strategies. Mintzberg referred to this mode as “grass roots” strategy making. In addition.
and HewlettPackard seems to be a combination of the ideological and grass roots modes as above but with an imposed structure that could only be associated with the planning mode. Hoshin Kanri. principally environmental uncertainty. However. Nonaka described a strategy-making process that combined the ideological mode – top management creates a vision – with the grass roots mode – middle management invent concrete means of closing the gap between what exists and what top management hopes to create. Quinn also appeared to believe that a formal planning system institutionalized the adaptive.114] on the validity of the planning mode in comparison with more adaptive approaches. Strategy modes versus organizational roles (Adapted from  to use Mintzberg’s descriptors) making. 481] such debates could cease. dictated. p. Toyota. However. Nissan and Matsushita identified the use of the same two modes as Nonaka but associated the ideological with faster moving industries and the grass roots with more mature industries. Quinn. management style or the content of individual decisions no single (strategy) paradigm can hold for all strategy decisions. generate a basis for evaluating and integrating short-term plans. lengthen time horizons. if it is accepted that one process mode cannot be optimal for all situations and a contingency approach is feasible[115. a strategy-making process adopted by Bridgestone. Kawai with examples from Asahi Beer. he asserted that both modes need to be activated as conditions. create an information framework. based on research in large multinational companies has taken a contingent view: because of differences in organizational form. There has been much recent debate[96.Entrepreneurial Planning Ideological Coach Motivate and inspire Player Respond to the challenge Adaptive Facilitator Grass roots Sponsor Role of top Commander Boss management Provide direction Evaluate and control Role of Soldier organization members To obey Subordinate Follow the system Manufacturing strategy processes 37 Empower and Endorse and enable support Participant Learn and improve Entrepreneur Experiment and take risks Table IV. incremental reality of the strategy process and he reconciled the adaptive and planning modes by acknowledging a role for formal planning techniques since they: q q q q q q provide a discipline forcing managers to look ahead periodically. require rigorous communications about goals. strategic issues and resource allocations. stimulate longer term analyses than would otherwise be made.113. . Nonaka called this process “middle-up-down”.
.117] relied on a top down planning view.38.4 38 In the manufacturing strategy literature the mode assumptions of writers is generally clear. Skinner[10. being the exception. Hayes et al. Empirical data on the relevance of culture in the manufacturing strategy context is rare but an exception is Misterek et al. took a much more adaptive stance. provoke crisis or use outsiders as change agents to implement “necessary” strategic change. planning and control systems and human resources aspects. values and expectations about an organization and the ways of doing things in that organization. Selznick believed a major role of the leader was to embody the purpose of the organization within the organization’s social structure and to define the standards and values of the organization. but there are many writers who recommend a set of values that enable “The Learning Organization”[14. This reluctance to change is caused partly by the fact that those most powerful in the organization are likely to benefit most from the existing culture. These beliefs evolve slowly and are very difficult to change dramatically.122]. engineers are located close to the shop floor and face to face communication is more common than written memoranda. however. In a study of “leading edge” firms from various industries they found the manufacturing strategy process to be top down.15. Cultural factors Combining the views of Schwartz and Davis and Johnson culture can be defined as a set of shared beliefs. He was not prescriptive about the values themselves. Thus though the modes of the manufacturing strategy process may be chosen by manufacturing.123]. Both Schwartz and Davis and Johnson recommend a form of culture audit in order to choose strategy implementation paths which avoid conflict with a firm’s culture.11. reactive to corporate strategy and generally limited to choice of manufacturing technology. they will exist in a business which may use different strategy-making modes to develop its business strategy.IJOPM 15. based on the importance they saw in the learning process and their apparent reluctance to advance a step-bystep process. There is again little empirical work on this aspect of manufacturing strategy with Maruchek et al. may not exist and techniques to surface managers’ strategic and cultural assumptions[121. The modes followed outside manufacturing might significantly influence manufacturing’s choice. One consultancy explicitly diagnoses organizational culture within their business strategy analysis process in order to recognize potential barriers to implementation. Gunn proposed a long process of strategy-making which emphasized learning and therefore leaned towards the adaptive mode. Such paths. who found that a significant contribution from manufacturing to the firm’s competitive position was associated with: q “low power distance” managers are regularly seen on the shop floor..
Finally Hayes and Wheelwright’s four stages in the development of manufacturing’s strategic role hints at a cultural dimension. It has also been indicated that fast moving markets may require businesses to use a different balance of strategy modes than slower moving markets[94 and Hart summarized four contingent factors (based on) that predict likely strategy process modes which are shown in Table V. especially on employee involvement and democratic leadership. The alternative strategy modes introduced from business strategy have extended the usual planning only mode so common in the manufacturing strategy literature and may be of particular interest to firms pursuing human resource strategies that value empowerment and team work. Schonberger’s “worldclass” message contained cultural recommendations. q Manufacturing strategy processes 39 External context The most widely quoted structuring of external context is Porter’s model of industry structure where five factors shaped business strategy: threat of entry to the market from other organizations. the existence of a credible plant wide philosophy and a high degree loyalty to the company from employees. This implied that efforts to change culture in order to improve the position of the firm was a viable part of long-term strategy. We have shown that popular. which would tend to reduce power distance and on team work which would tend to increase collectivism. supplier power. Silicon Valley and Japan.“high collectivism” supervisors encourage team work. buyer power. Later Porter extended these factors to include the geographical location of the firm to explain successes in. The review set out to suggest ways of incorporating strategies like TQM within traditional manufacturing models and it was also hoped that potential extensions to traditional frameworks might be identified by reviewing related literature. team problem solving and group performance rewards are in evidence. best practice strategies can be linked to the traditional decision area framework and that capability and competence may provide potential extensions to manufacturing’s traditional objectives and decision areas. for example. q “high congruity”. The idea of strategy creation being an ongoing process has extended the traditional project or big bang approach to the manufacturing strategy process . Hayes and Wheelwright stated that manufacturing strategy should be consistent with the business environment since it was of little use to propose manufacturing strategies that could not be afforded or ignore regulatory imperatives. The framework – summary The framework has now been built and Figure 3 summarizes the main subelements that have been covered in the review. If manufacturing were regarded as having a negative impact on the firm it is likely this would be evident in cultural factors – manufacturing might not be regarded as the place to be seen. availability of substitute products and existing competitors. transfer to manufacturing might be interpreted as a punishment and manufacturing’s responses might tend to the defensive.
Turbulent.IJOPM 15. low level Stable. ideological. manufacturing processes and control. Mature re-orientation Solidify position (defender) Proactive change (prospector/ analyser) Continuous Innovation improvement (prospector) (analyser) (Adapted from  to use Mintzberg’s mode descriptors) mostly found in the literature and has highlighted the need for accessible tools to support ongoing strategy processes. human resources. geographic position . within manufacturing and externals Procedure: audit. organization. threat of entry. Strategy mode versus Miller’s contingencies No relation Steady growth Rapid growth. stage of firm development Figure 3. The manufacturing strategy process framework External context Supplier power. existing competitors Regulation. between the decision areas. low of complexity degree of change Complex. The discussion revolves around the use of the framework to help Manufacturing strategy content Manufacturing strategy process Qualities of the process outcome Objectives quality. grass roots Culture. time cost and flexibility capability and competence Decision areas: facilities. formulation and implementation Process management: big-bang–continuous creation Consistency: with business and other functional strategies. planning. quality policy. capacity. adaptive. buyer power. NPI and performance measurement best practice strategies business processes capability and competence Point of entry: education and gaining commitment Participation: within the business. availability of substitutes. Discussion – using the framework In this section interactions between sub-elements in the framework are described. high velocity or radical change Medium-large Adaptive Grass roots Environment Simple.4 Entrepreneurial Planning Ideological Dynamic. vertical integration. with the business environment over time Comprehensive Credible Appropriate Internal context Alternative strategy modes Entrepreneurial. many dynamic and stakeholders complex Large No relation No relation 40 Firm size Small Medium-large Stage of firm No relation development Strategic orientation Table V. political and economic context.
The procedure should include education (a point of entry issue) on the strategy principles being used in the process (for example which strategy content framework is to be used) and the means of gathering and comparing audit data. Audit The audit stage is the most documented stage in the manufacturing strategy process and generally concentrates on defining the manufacturing task and assessing the ability of current strategy to achieve that task. dataintensive stage aimed at identifying the strengths and weaknesses of current strategy.design a manufacturing strategy process to achieve a set of process outcomes. the external context is omitted. Formulation In this stage the aim is to generate an action plan which addresses issues that prevent the manufacturing task being achieved. no attempt has been made to create a picture where every aspect of the framework can be seen to interact with every other. Most published processes observe these points to a greater or lesser extent. even when this means business strategy Manufacturing strategy processes 41 . The fact that many interactions are at work can lead to a complex picture and two steps have been taken to simplify the framework while retaining its vital elements. however in no case yet seen has the audit stage included a systematic means of looking at past manufacturing strategy. Procedures which enable iterations with business and other functional strategies by the involvement of the CEO and functional managers will tend to assist the consistency and credibility of manufacturing strategy. Second. This was too ambitious a picture to create given the number of interactions. First. after partially designing a manufacturing strategy process a set of further interactions are used to illustrate sub elements which have been previously ignored or assumed. however. a subset of potential interactions is shown. national and market factors enters the manufacturing strategy process from business strategy and objectives – a key start point for all published processes. The planning mode is the most supportive since this is a structured. Such a perspective would be necessary to enable manufacturing to construct a strategy that displayed consistency over time. Table VI summarizes how the framework could be used to design the audit. as mentioned earlier the main impact of sectoral. albeit in particular circumstances. Credibility within manufacturing and widely within other functions would be assisted by creating an awareness of the process across the firm and especially within manufacturing at an early stage. To achieve consistency with business and other functional strategies and credibility of manufacturing strategy the involvement of the CEO and senior representatives from all functions is essential. Comprehensiveness of the manufacturing strategy is not a major issue in this stage but any deficiencies will be identified in the content model chosen by the end of the stage. formulation and implementation stages of a manufacturing strategy process to achieve a set of desired process outcomes and its elements are now discussed.
The achievement of consistency within manufacturing strategy requires methods of predicting interactions between options in different decision areas over time. The supportive strategy process modes are entrepreneurial. The design of a strategy process Participation: regular feedback on progress to CEO and function heads Credibility within Procedure: methods Participation: Participation: wide and the business for deriving the appropriate deep dissemination of manufacturing tasks involvement of other the strategy from business strategy functions Credibility within Participation: Participation: deep Procedure: means of manufacturing awareness of the involvement in the achieving widespread strategy process at an creation and checking understanding of the early stage of strategic options strategy Comprehensiveness Point of entry: wide Procedure: tests for education of the comprehensiveness strategy principles being used Consistency over Procedure: methods of Procedure: methods for time capturing past recognizing the scale and strategies longevity of options Consistency between Procedure: methods of different parts of the predicting the effect of manufacturing options in terms of strategy interactions between decision areas is adjusted to match manufacturing capabilities. Credibility within manufacturing will be considerably improved by wide involvement in the creation and evaluation of strategy alternatives and it is likely that the quality of strategy proposals and the ease of subsequent implementation will also be improved by such participation.IJOPM 15. . adaptive and grass roots and Table V identifies the external context that favours these modes.4 Qualities of the process outcome Consistency with business and other functional strategies Audit Participation: involvement of CEO and function heads and wide awareness within the business that the process is active Formulation Procedure: the possibility of iterations with business and functional strategies Implementation Participation: regular feedback on progress to CEO and function heads 42 Table VI. Procedures that adequately address the latter two requirements have yet to enter the manufacturing strategy literature. The achievement of consistency over time implies that methods are required that can recognize the scale of change from the past that the implementation of potential strategic options requires and the potential longevity of these options.
However. Thus participation can be sensitive to decision area and type and may have to be limited even if this does not assist the widespread credibility of the strategy. can emerge in unplanned ways at any time. Meanwhile. If uncertainty is high then trials rather than global changes are likely to be attempted. Such tools would support the continuous creation view of strategy formulation adopted by Hayes and Wheelwright with its echoes in the empirical work of Mintzberg and others. The supportive process modes are likely to be planning and adaptive depending on the degree of uncertainty of the strategy’s interactions with for example. however. This is a valid assumption for the first implementation of a strategy process in manufacturing where strategic principles and language are explained and a fresh look is taken. not necessarily when people decide to make strategy. No techniques are mentioned in the example nor have any been found in the strategy literature in general that assist strategy development as part of the normal management process. (2) The example was oriented to the big bang or project approach to the development of manufacturing strategy. strategy. Logic and content are likely to be necessary since new manufacturing strategies often require implementation assistance from other functions and individuals who have not been directly involved in the strategy process. A company with manufacturing at stage one is unlikely to have the patience for this participation and heightened focus on manufacturing and might well prefer to adopt best practice strategies. rarely discussed.Implementation In the implementation stage consistency of the manufacturing strategy with other functional strategies and its credibility are still assisted by regular feedback of progress and wide and deep dissemination of the content and logic of new strategy. (3) There was an implicit assumption that manufacturing was at Hayes and Wheelwright’s stage-three strategic role. If the subject of debate is the improvement of quality policies then wide involvement is wholly appropriate and desirable. generally wide participation. that is strategy is assumed to be made when people sit down to make strategy. Methods for achieving a wide understanding of the logic of strategies are. At least three assumptions have been made in this example: (1) It has been assumed that all manufacturing strategy decisions are alike in the sense that they can be addressed by similar. the market. However if the closure of a manufacturing site forms the crux of reducing manufacturing costs then wide involvement in the creation of that strategy is unlikely to be possible or desirable. a company at stage four is likely to criticize the absence of an explicit reference to organization learning and may be very interested in a resource-based view which makes operational the ideas of competence and capability Manufacturing strategy processes 43 . as observed in the business strategy literature.
. Cleveland. Anderson. Journal of Operations Management. 509-24.T. Hofer. Conclusion The proposed framework appears to be capable of assisting the design of manufacturing strategy processes and in its current form it has proved useful in identifying gaps in the manufacturing strategy toolkit in areas such as past strategy analysis and the ongoing formation of strategy. 2. therefore. E. 2. “Research in the process and content of manufacturing strategy”. 1989.M. 5. “Manufacturing strategy.. 2. of designing realistic processes whose aspects seem to depend on the particular firm and its particular situation.. idiosyncratic and difficult to imitate”.IJOPM 15. Vol. W. P. R. 3.A. 8 No.. West Publishing. 181-203. G. Vol. 948]. p..L. and Schroeder.T. Journal of Management. 1987. 1989. 15. 18 No. Vol.C. this suggestion of the individuality of strategy processes might satisfy a number of the criteria for a potentially important competence or capability – they are “unobservable”. and Schendel. P.W. Thus the improvement of the processes that create and implement these strategies will remain a challenge for practitioners and researchers for the foreseeable future. 2. Strategy Formulation: Analytical Concepts. pp. Swamidass. and Newell.4 44 development. pp.. From this application of the framework the multi-dimensionality of the strategy process and its design becomes evident. and Ward.G. St Paul.. Vickery has already suggested that “production competence” may be to do with the efficiency and effectiveness of the manufacturing strategy formulation and implementation process. No. G. D. MN. the outcomes required from the process and therefore the strategy process required to create those outcomes.. 1980.M. Snyder. This suggests that manufacturing’s strategic role is a potentially powerful determinant of strategy content. there is little doubt that improvements in the contribution of implemented manufacturing strategies to business competitiveness will continue to be sought. OMEGA International Journal of Management Science. they are “upstream. and Swamidass. 1978. “Assessing operations management from a strategic perspective”. Notes and references 1. Adam. 33 No. “Operations strategy: a literature review”. 4. lending support to Mintzberg’s contention that: There is perhaps no process in organizations that is more demanding of human cognition than strategy formation[7. Yet whether or not a firm’s manufacturing strategy process is an important competence or capability. D. The main conclusion from the article may be of the scale of potential interactions in the framework and the difficulty. 133-58. However. Leong. 4.K. Vol. C. P. J. pp. environmental uncertainty and performance: a path analytical model”. Management Science. It may also prove helpful as a tool to aid the diagnosis of manufacturing strategy process problems.
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