9.

Manufacturing Strategy Formulation

Strategy:
Is a device for
- Disciplined planning and thinking
- Communication
- Organization building
According to Professor Emeritus C.W. Skinner {Harvard Business School (1960 – 1986) who is
widely considered as father of Manufacturing Strategy}

 different companies within the same industry have different strengths and weaknesses and
choose to compete in different ways
 different production "systems" have different operating characteristics and each involves a
different set of trade-offs
 a production system must have a customized design that reflects the priorities and trade-offs
inherent in the firm’s own competitive situation and strategy

Therefore, no one operating system is universally superior under all competitive situations and or
all companies. Every operating system embodies a set of trade-offs.

Some will be particularly good at producing standardized products in high volume at low
cost;
others will excel at responding quickly to shifting demand for more customized products.
Operations Strategy Matrix

Operations Strategy matrix is an important tool which facilitate, formulation of manufacturing

strategy. It combines Key Decision Area with Performance Objectives. This will help the
organization to gain market competitiveness while maximizing resource usage.

Operations Strategy Matrix

Examples of four SME companies are given below: Company Aluminium, Company Automotive,
Company Casting and Company Outdoor.
Exercise

Demak Lanka (Pvt) Ltd., is a new motorcyles and spare parts manufacturer based in Sri Lanka for South
Asian market. Its current market share is only 4% and annual turnover is Rs. 450Mn. Ratio of sales
turnover of motor cycles and spare parts is approximately 2:1. The corporate management in its latest
annual meeting decided to increase the market share to 10% within the next 24 months. The annual
turnover of the company to be increased to Rs. 1Bn within the next two years. The marketing strategy of
the company to be revised to include sizeable sales volume by online ordering. Other functional
strategies to be re-aligned to meet new corporate goals.

Create a manufacturing strategy for Demak Lanka to achieve Corporate and Business goals with the help
of other functional units.

“The pessimist sees difficulty in every opportunity. The optimist sees opportunity
in every difficulty.” – Winston Churchill