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Putting manufacturing on the offensive

De Meyer, Arnoud
Ferdows, Kasra
Vereecke, Ann
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Publication Type
Journal article with impact factor
Editor
Supervisor
Publication Year
2023
Journal
Production and Operations Management
Book
Publication Volume
32
Publication Issue
1
Publication Begin page
227
Publication End page
236
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Abstract
The path for elevating the role of manufacturing in the company strategy in the last few decades has been rather clear: improve the basic production capabilities—typically quality, reliability, lead times, and cost efficiency of production processes. Leading Japanese companies, like Toyota, showed the way. But as many have heeded the advice and followed suit, this approach has become essentially a defensive strategy; you must do it not to fall behind. Has manufacturing lost its potential to create capabilities on which a company's strategy can rest? Our answer is absolutely not. In fact, unlike before, manufacturing has multiple paths for creating a competitive advantage and these paths require development of new and often non-traditional capabilities. We identify five sets of new capabilities, and since it is hard to excel in all of them, we provide a framework for choosing the right mix depending on the company's business strategy. The framework focuses on the implications of two recent trends: increasing information density embedded in products and increasing connectedness of manufacturing processes. We suggest specific mixes of the five groups of capabilities that can support and accelerate a company's strategy to exploit these trends. We use examples from three multinationals to illustrate the process. These new opportunities change the traditional role of manufacturing executives. Their focus will need to shift exceedingly to collaborating and interfacing with colleagues in other functions as well as managing relationships beyond the boundaries of the company.
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Keywords
Manufacturing, Connectedness of Manufacturing Processes, Information Density of Products,, Manufacturing Strategy, Supply Chain Capabilities
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