MM ZG512 Manufacturing

Strategy
Rajiv Gupta
BITS Pilani
Live Lecture 6
 Recitation 6
• Module 1
– Term Paper
• Module 2
– Apple Foxconn Case Study
• Module 3
– Topics Covered in Taped Lectures 9 and 10
• Module 4
– Discussion Questions Based on Taped Lectures 9 and 10

2
 Recitation 6
• Begin Module 1
– Term Paper

3
 Term Paper
• So far, you should have worked on
– Analyzing your industry using the 5 Competitive
Forces of Porter
– Determined what Generic Strategy your company
uses, or should use, with reasons
• Next you need to
– Determine the types of requirements posed by the
customers that your company chooses to serve
– How do these translate into specific manufacturing
outputs that should be the company’s focus?

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 Term Paper
– How do these manufacturing outputs translate
into specific attributes of the manufacturing
levers?
– Where does the company lie on the volume
variety/layout matrix and where should it be?

5
 Recitation 6
• End of module 1

6
 Recitation 6
• Begin Module 2
– Apple Foxconn Case Study Discussion

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 Apple Foxconn Case Study
Questions for Discussion on Apple-Foxconn Case
Q 1. What is the case about?
Q 2. What, according to the author, should the important points of focus
have been in the Macintosh plant in the 1980s? Do you agree with the
author?
Q 3. Do you agree that cost should have been the least important of the
three Key Manufacturing Tasks at the Macintosh plant?
Q 4. What were some of the clues from the photos that reveal the
possible problems at the plant?
Q 5. What, according to the author, were the mistakes made by Apple in
the Macintosh plant?
Q 6. What are the main points regarding manpower and support
personnel in the current Foxconn plant in China?

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 Apple Foxconn Case Study
Q 7. What are some drawbacks at present, and in the future, for
the Foxconn plant that Apple should be aware of?
Q 8. What are the similarities that the author mentions between
Henry Ford’s plant, and the Foxconn plant?
Q 9. How well did Foxconn take care of the 3 key manufacturing
tasks?
Q 10. What are the key differences/advantages that the author
mentions between production in China versus the US? Comment
on this.
Q 11. What does the author recommend in terms of workforce if
Apple moved the production back to the US?
Q 12. What does the author recommend in terms of the layout and
workflow?

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 Apple Foxconn Case Study
Q 13. What are the implications for the supply chain if Apple
moves manufacturing to the US?
Q 14. What should have Apple considered when automating the
Fremont plant?
Q 15. Do you think it make sense to move production back to the
US? Why?

10
 Recitation 6
• End of module 2

11
 Recitation 6
• Begin Module 3
– Topics Covered in Taped Lectures 9 and 10

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 Taped Lecture 9
• In Lecture 9 we discuss the article “Competing Through
Manufacturing.”
• We discuss the 4 stages that were introduced in Lecture 8.
• It is mentioned that Stages 1-3 are very different from Stage 4
as the first 3 stages do not entail a rethink of the
manufacturing function, and its relationship with the rest of
the organization.
• Companies in Stages 1-3 tend to have a command and control
attitude, and do not look to engage the workforce.
• Stage 4 is one where the creativity of the entire workforce is
sought to be harnessed.

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 Taped Lecture 9
• Most companies begin in Stage 1 or 2 because their main
focus is on a product or service that they feel gives them
an edge in the marketplace.
• The transition from Stage 1 to 2 comes about without
much effort and sometimes the organization is not even
aware of the change.
• The move from Stage 2 to 3 occurs when management
realizes that traditional approaches do not work any
more.
• Early success attaining Stage 3 can also signal a reversal
back to Stage 2. This may happen due to complacency, or
due to the initial leaders being promoted elsewhere.

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 Taped Lecture 9
• The jump to Stage 4, however, is a very difficult one.
• Management has to start questioning the role of
manufacturing and how it relates to the rest of the
organization.
• Several companies do not feel that they need to
move to Stage 4 as several of the benefits are
obtained in Stage 3.
• Also there is great uncertainty with regard to what is
in store in Stage 4, scaring top management to play it
safe.

15
 Taped Lecture 10
• In Lecture 10, we begin with the case study of GE’s
Dishwasher SBU in the 1970s.
• The SBU had been very successful, but its products
and processes were getting dated.
• Management was considering the infusion of capital
to upgrade the product design and to get new
equipment. It was considered a move from Stage 2 to
Stage 3
• In going through the analysis, the management
realizes that there is greater potential for change.

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 Taped Lecture 10
• Senior management of GE felt that, by investing
more capital and by instituting some fundamental
changes, they could achieve bigger benefits and be in
Stage 4.
• Careful implementation of the changes resulted in
significant improvement in overall performance of
the SBU.
• Next we introduced the topic of Strategic Fit based
on Michael Porter’s article, “What is Strategy?”

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 Taped Lecture 10
• Strategic Fit deals with the relationship of the
different activities that a company chooses to do.
• By ensuring a tight meshing among the various
activities, the company can not only gain superior
performance, but also make it difficult for any other
company to copy part of the system.
• There are three levels of orders of Fit as suggested by
Porter.
• The first order Fit considers the synchronization of all
activities toward the corporate strategy

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 Taped Lecture 10
• In the second order Fit, the activities not only
support the company strategy, but also mutually
reinforce each other. There is synergy among the
activities.
• In the third order Fit, the activities go beyond
synergy. The activities attempt to optimize the
performance of the entire system.
• An example of Southwest Airlines is presented to
illustrate the concept of Strategic Fit.

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 Recitation 6
• End of module 3

20
 Recitation 6
• Begin Module 4
– Discussion Questions Based on Taped Lectures 9
and 10 (for next recitation)
– Please note that we will not have class next week
as I am travelling. Our next live class will be 2
weeks from today.

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 Recitation
• Based on the characteristics discussed in the lecture,
which stage describes your organization? Discuss one
or two important points in this regard.
• What do you think it would take to transition to the
next stage? Is there a risk of slipping to an earlier
stage?
• Do you agree with the premise that a lot of
companies focus on product technology rather than
their process capability as their strength? Support
your answer with reasons/examples.

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 Recitation
• How well does top management in your organization
support creativity and innovation?
• How much is the drive for creating a learning
environment versus a command and control state?

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 Recitation
• What do you understand from strategic fit?
• To what extent do you see strategic fit in your
organization?
• Is the strategic fit first order, second order, or
third order? Give your reasons.
• Where do you see potential for improvement
by implementing strategic fit in your
company?

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 Recitation 6
• End of module 4

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Questions?

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