T12- 703, The Close North,
Nirvana Country, Sector 50,
Gurgaon, Haryana 122018, India

Manufacturing Strategy

Why is it needed?

Manufacturing was focused on cost control while Marketing emphasized other reasons for buying the product such as quality, delivery or variety.

Most cost reduction efforts were aimed at Direct Labor which represented a small and decreasing portion of the cost structure.

Many American factories had become so large and complex they were impossible to manage well

Optimizing Manufacturing Capability

Every firm wants to optimize their manufacturing. But, optimization requires some criteria. Many companies just assume that the criteria is cost and, especially, direct labor cost and capital cost. In fact, there are other factors that might be optimized

  • The ability to deliver quickly
  • The Ability to deliver reliably
  • The ability to produce high quality
  • The ability to build high variety
  • The Ability to introduce new products quickly
  • The ability to deliver to certain locations
  • The ability to handle volume fluctuations and remain profitable
Support of Marketing Strategy

Marketing may develop a strategy that manufacturing simply cannot fulfill. Or manufacturing may optimize on the wrong parameters. A factory built for low labor cost may not be suitable for a marketing strategy that requires the rapid and continual introduction of new products

Co-ordinating With Financial Strategy

The co-ordination of Marketing, Finance and Manufacturing strategies is critical for long-term competitiveness. This coordination is often lacking. Marketing may emphasize a Cost Leadership strategy, for example, while finance is unaware that such a strategy may require continual and long-term capital investment

Decision Guidance

One of the most important functions of Manufacturing Strategy is the guidance of lower level, shorter-term decisions. For example, should we buy this automated equipment or take a more manual approach? The automated equipment may bring lower direct labor costs but reduce new product flexibility. The correct answer depend upon whether Marketing is pursuing a cost leadership strategy or an innovation strategy. The innovation strategy may require many new product introductions and have far shorter product life cycles

Systems Thinking

Most manufacturing people visualize their factories as static of steady-state models. Such Mental Models can be quite misleading. Real systems often exhibit strange behaviors that are unpredictable with steady-state models. Systems Thinking is vital for the leader of any organization, particularly so in manufacturing.

WHERE? - Almost Everywhere


  • Workflow
  • Process Scale
  • Process Flexibility
  • Process Technology
  • Capacity Targets
  • Supplier Requirements
  • Supplier Relations
  • Make-Buy Police


  • Accounting System
  • Labor Reporting
  • Personnel Policies
  • Employee Skills
  • Education & Attitude
  • Corporate Culture
  • Management Style
  • Scheduling Approaches
  • Maintenance
  • Quality
  • Communications


  • Site Size
  • Utility Systems
  • Site Location
  • Site Focus
  • Plant Layout


It is never too early to develop a formal manufacturing strategy. It is sometimes too late if the firm is in the last extremity. In most cases, a firm has had recurrent difficulties with production, quality, new products or all the above. This situation may actually be essential for creating a sense of urgency. New leadership, especially when a difficult situation has existed for some time, often initiates the strategic debate.