Senior management too often chooses to concentrate its efforts in other areas, leaving manufacturing partially or totally unintegrated. Too many corporate myopias and parochial views place manufacturers in a less than desirable competitive position.
The competitive challenge necessitates a new corporate attitude about the increased importance of World Class Manufacturing. This will cause senior management to view manufacturing with renewed importance as part of an integrated corporate strategy. This renewed importance for manufacturing will require a better understanding of manufacturing strategy implications, tradeoffs, and manufacturing planning, execution, and control techniques to gain and maintain competitive advantage. We must also recognize that MRP, JIT, etc. by themselves are only a piece of the whole. A new perspective is needed. The old, and unfortunately some new, parochial views have caused many of us to be nearsighted and lose ground because of it. We have learned a hard lesson. One of our greatest areas of vulnerability was in taking for granted that we knew how to apply our own manufacturing techniques, and we were so good at manufacturing that no one could beat us at our own game. What must be understood by senior management is that planning, organizing, executing and controlling manufacturing resources is one of the key cornerstones to a profitable and dominant competitive position.
In order to gain competitive superiority in a world economy, the development and implementation of an effective manufacturing strategy has become an essential, overriding mission for manufacturers. Developing a highly competitive manufacturing strategy, as an integral part of an overall corporate strategy is a vital part of the management process as a company develops its instincts for Manufacturing Excellence.
Are You on THE RIGHT Track? You may be on the right track but please ensure that you don’t sit down on the track as you may be run over and end up not knowing what hit you.
Is your company firmly committed and involved with making Manufacturing Excellence an integral part of the management process? After serious consideration, candid answers to the following 10 questions will help you benchmark how your organization is progressing toward the goal of Manufacturing Excellence.
The scoring system is 10 points for yes and zero points for no answers. Nothing less than 100 points or 100% performance is really acceptable if Manufacturing Excellence is an integral part of your company's strategy for competitive advantage.
• Do we have a formal, top management driven Sales and Operations Planning process for determining the capacity requirements, financial resources, cycle times, etc. to support anticipated customer demand?
• Do we thoroughly understand that excess inventory masks operational and quality problems, making it difficult to identify the specific cause for correction?
• Do we know the expected reduction in work-in-process and finished goods inventories from shorter cycle times?
• Have we developed the mindset to constantly identify problems and immediately resolve them?
• Are we working aggressively on the redesign of complicated products, which are difficult to manufacture because they have been over designed
• Does senior management thoroughly understands that they decide how important quality is and improvement begins from that point?
• Have we calculated the production capacity increase from a 75% or more reduction in current changeover times?
• Have we significantly reduced alternate sources of supply and made our primary vendors working partners?
• Do our performance measurements stimulate improvement in the right direction?
• Do we have a well conceived, documented action plan that has the organization focused on and aggressively working on the right issues?
Wednesday, March 1, 2006
Strategic Planning Process
Strategic planning is a business process that many companies employ to identify critical success factors that set the course for future growth and profits.
Lewis Carroll in "Alice in Wonderland" makes a good case for it: "Would you tell me, please, which way I ought to go from here?" said Alice. "That depends a good deal on where you want to get to," said the Cat. "I don't much care where…," said Alice. "Then it doesn't matter which way you go," said the Cat.
Like most business processes, the key to success is the effective implementation of the plan. Companies that do a good job of developing and executing their strategies can create a competitive edge that provides increased market share and higher gross profit margins. Organizations that turn their plan into a "dust collector" upon an executive bookshelf, will never achieve their full growth and profit potential.
Strategic plan knowledge for anyone ... anywhere ... anytime.
Most criticism of strategic planning is aimed at the planning process. They question the validity of a plan that has been based on market "guestimates", the questionable valuation of the depth and breadth of competitors and an optimistic assessment of the company's internal strength and weakness. The fact that strategic plans can be overly optimistic is not the core problem. Although the criticism may be appropriate, it puts the focus for improvement on the wrong end of the process - it is the implementation task that is critical to producing positive results and it is here where most companies fail at strategic planning.
Poorly implemented rational, strategic plans will produce limited positive results. On the other hand, overly optimistic strategic plans, effectively implemented, can produce results beyond everyone's expectations. This being the case, what is the key to effective implementation? In one word - commitment!
Companies that are good at strategic planning build commitment to the planning process and to each of the strategies within the plan. They build commitment throughout the organization, working with people from all business functions to build commitment before, during and after development of their strategic plan.
Strategic plan knowledge for anyone ... anywhere ... anytime.
Winners begin early in building a commitment to the strategic plan. Suggestions are encouraged from managers at all levels, from key executives who will participate in the planning sessions, and others who will share responsibility for implementing the resultant strategies. Together, they surface issues that will require changes in business process and/or culture and identify those constraints that will need to be overcome if implementation is to be successful
During planning sessions, key executives from each functional area are all encouraged to participate and contribute to the plan. These executives develop strategies that build on organizational strengths and consider resources required to accomplish those strategies. They assure that a key executive "owns" each strategy and commits to a time schedule for its accomplishment. The key executives give thought to resource planning - realizing that human resources are the key to making positive things happen in difficult, complex business environments - and they commit accordingly.
Following the development of their plan, those responsible for implementations develop their own "tactical plans." These action plans, when coupled with self-directed work teams, are major contributors to a successful Strategic Planning implementation. Teams use their plan to manage, to make decisions and to grow their business. Periodically, they review their "tactical plans" to monitor and report on the progress of implementation - keeping the plan "alive" by revising strategies and tactics when necessary.
Strategic plan knowledge for anyone ... anywhere ... anytime.
Finally, to insure successful implementation of their strategic plan, they work on the planning process itself. The planning group continuously "fine tunes" the planning process to insure that inputs from all business functions are given their due consideration and to insure that buy-in and commitment to the final plan is agreed upon throughout all levels of the organization.
So, why are most operations management teams outside of the strategic planning process? Why do many line managers view strategic planning as a make work project that produces little or zero value to customers? Maybe, it's because they did not participate in its development nor did they buy-into its validity - let alone commit to the execution of its strategic objectives. In short, they're not connected to the process! To achieve a company's full growth and profit potential, CEOs and business owners need to insure the active participation of operation management in the strategic planning process.
Lewis Carroll in "Alice in Wonderland" makes a good case for it: "Would you tell me, please, which way I ought to go from here?" said Alice. "That depends a good deal on where you want to get to," said the Cat. "I don't much care where…," said Alice. "Then it doesn't matter which way you go," said the Cat.
Like most business processes, the key to success is the effective implementation of the plan. Companies that do a good job of developing and executing their strategies can create a competitive edge that provides increased market share and higher gross profit margins. Organizations that turn their plan into a "dust collector" upon an executive bookshelf, will never achieve their full growth and profit potential.
Strategic plan knowledge for anyone ... anywhere ... anytime.
Most criticism of strategic planning is aimed at the planning process. They question the validity of a plan that has been based on market "guestimates", the questionable valuation of the depth and breadth of competitors and an optimistic assessment of the company's internal strength and weakness. The fact that strategic plans can be overly optimistic is not the core problem. Although the criticism may be appropriate, it puts the focus for improvement on the wrong end of the process - it is the implementation task that is critical to producing positive results and it is here where most companies fail at strategic planning.
Poorly implemented rational, strategic plans will produce limited positive results. On the other hand, overly optimistic strategic plans, effectively implemented, can produce results beyond everyone's expectations. This being the case, what is the key to effective implementation? In one word - commitment!
Companies that are good at strategic planning build commitment to the planning process and to each of the strategies within the plan. They build commitment throughout the organization, working with people from all business functions to build commitment before, during and after development of their strategic plan.
Strategic plan knowledge for anyone ... anywhere ... anytime.
Winners begin early in building a commitment to the strategic plan. Suggestions are encouraged from managers at all levels, from key executives who will participate in the planning sessions, and others who will share responsibility for implementing the resultant strategies. Together, they surface issues that will require changes in business process and/or culture and identify those constraints that will need to be overcome if implementation is to be successful
During planning sessions, key executives from each functional area are all encouraged to participate and contribute to the plan. These executives develop strategies that build on organizational strengths and consider resources required to accomplish those strategies. They assure that a key executive "owns" each strategy and commits to a time schedule for its accomplishment. The key executives give thought to resource planning - realizing that human resources are the key to making positive things happen in difficult, complex business environments - and they commit accordingly.
Following the development of their plan, those responsible for implementations develop their own "tactical plans." These action plans, when coupled with self-directed work teams, are major contributors to a successful Strategic Planning implementation. Teams use their plan to manage, to make decisions and to grow their business. Periodically, they review their "tactical plans" to monitor and report on the progress of implementation - keeping the plan "alive" by revising strategies and tactics when necessary.
Strategic plan knowledge for anyone ... anywhere ... anytime.
Finally, to insure successful implementation of their strategic plan, they work on the planning process itself. The planning group continuously "fine tunes" the planning process to insure that inputs from all business functions are given their due consideration and to insure that buy-in and commitment to the final plan is agreed upon throughout all levels of the organization.
So, why are most operations management teams outside of the strategic planning process? Why do many line managers view strategic planning as a make work project that produces little or zero value to customers? Maybe, it's because they did not participate in its development nor did they buy-into its validity - let alone commit to the execution of its strategic objectives. In short, they're not connected to the process! To achieve a company's full growth and profit potential, CEOs and business owners need to insure the active participation of operation management in the strategic planning process.
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