COMPANIES NEED TO FOCUS MORE ON MANUFACTURING, EXPERTS SAY
COLUMBUS, Ohio -- If U.S. industry is to succeed in the global
marketplace, corporate leaders need to give more attention to
manufacturing strategy, according to researchers at Ohio State
"It seems that many corporate managers are more interested
in the intricacies of finance than the details of making good
products," said G. Keong Leong, associate professor of operations
management at Ohio State's Max M. Fisher College of Business.
"Manufacturing has to become a bigger priority in the minds
of managers," Leong said.
But one problem has been the lack of a clear definition of what
manufacturing strategy should include. To remedy this, Leong
and Peter Ward, also an associate professor of operations management
at Ohio State, developed what they call "The six Ps of Manufacturing
Strategy." Their list was published recently in the International
Journal of Operations and Production Management. Here are their
- Planning. Many companies develop plans to help guide what
they hope to achieve in their manufacturing process. The problem,
Leong says, is that many companies believe having a plan is the
same as having a strategy. "Just having a business plan
is not enough to ensure success," he says. That leads to
the remaining Ps.
- Proactiveness. "One of the reasons U.S. companies have
fallen behind foreign competitors is that manufacturing has taken
a subordinate role to marketing and finance functions," Leong
said. "This means manufacturing is always reacting to decisions
by other units of the company and is always concerned with short-term
issues." To be proactive, companies must anticipate the
potential of new manufacturing practices and technologies and
make sure that manufacturing is involved in major engineering
and marketing decisions.
- Pattern of actions. While it's important to have a manufacturing
plan, what counts is the real-life actions and decisions made
by management. These actions will determine whether a manufacturing
strategy is successful or not. "The pattern of actions of
a company reveals the real strategy of the firm," Leong said.
- Portfolio of manufacturing capabilities. These are the special
abilities that a company has in manufacturing. Some examples
of manufacturing capabilities include cost, quality, delivery,
and performance. Managers should emphasize those capabilities
at which the company excels. For example, if a company has the
ability to make products more cheaply than competitors, that ability
should be exploited, he said.
- Programs of improvement. These are the programs companies
develop to improve manufacturing capabilities needed to succeed
in the marketplace. For example, a company may need to find ways
to cut costs in manufacturing if competitors can offer less expensive
products in the marketplace.
- Performance measurement. Managers need to find ways to evaluate
how their company is doing at meeting its strategic goals. For
example, a business that stresses rapid delivery of products needs
to find ways to measure and reward delivery performance within
"The value of the six Ps is that they allow manufacturing
strategy to be viewed from a broad perspective," Leong says.
"Companies that develop such a perspective will be more
successful in the global marketplace."
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Contact: G. Keong Leong, (614) 292-5250
Written by Jeff Grabmeier, (614) 292-8457
Jeff Grabmeier, Managing Editor (firstname.lastname@example.org)
Earle Holland, Director, Science Communications (email@example.com)