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Contents
Reading 1.1: The Purpose of the Firm, A. Campbell.
Reading 1.2: Why do Companies Over-Diversify? A. Campbell.
Reading 1.3: Manufacturing Strategy Part 1 - Setting the Strategy, Tangram
Technology
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Additional Reading 1
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Brief Case:
The Purpose of the Firm
Andrew Campbell
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Additional Reading 2
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Andrew Campbell
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Additional Reading 3
UNSW, Copied under Part VB of the Copyright Act 1968, as amended, on December
1993.
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Despite these statements manufacturing strategy can be about all of these things
but only if they are appropriate to your business.
Strategy - The art and science of the planning and conduct of a war (or in this
case, a business).
Tactics - The art and science of the detailed direction and control of
movement or manoeuvre to achieve an aim, task or objective. Plans followed
in order to achieve a certain aim.
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Business strategy
Before we can set down a manufacturing strategy we must have some idea of the
overall business strategy after all this is the framework that manufacturing fits
into. A business strategy needs to he formed in several steps where you need to go
'around the loop' several time to ensure that it all fits together.
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Personnel Strategy
Marketing
Strategy
Manufacturing
Strategy
Financial
Strategy
Technical
Strategy
Organisational
Strategy
Personnel Strategy
Profit
Market Share
Growth
There should always be actual targets to aim for in both the long and short term. It
is not enough to say that you want to increase profit, you must state how much
you want to increase it by and over what period i.e. profit to increase from 1,000
to 2,000 in the next twelve months. The objectives should be bold (to provide a
challenge), measurable (to see if you get there), prioritised (to give focus) and
accepted by all staff.
Under no circumstances should these exceed half a page in length, nor should you
have more than four key objectives.
Marketing strategy
This involves looking at your market in terms of size, volume and trends, looking
at customers in terms of characteristics and needs and competitors in terms of
strengths and weaknesses. The most memorable method is to think in terms of
Manufacturing Strategy: Unit 1 - The Nature and Role of Manufacturing Strategy
November 2000
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SWOT Analysis
Strengths
Opportunities
Weaknesses
Threats
Price - Can you provide the required product at the market price?
Quality - Responsiveness
Product choice
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Every company needs to find out what the KFS are for their market and to try to
improve these. If there is nothing to distinguish you from the crowd then your
future is limited.
Manufacturing strategy
Having established the objectives, marketing strategy and KFS we can begin to
develop a manufacturing strategy to deliver the key factors for success at the
required level. The formulation of the marketing and other strategies must be
clearly understood by the engineers otherwise the design of the manufacturing
systems will not be effective.
It used to be assumed that cost-efficiency based on high machine and labour
utilisation was the way to be competitive. The market and battleground have
changed so that now total system effectiveness is the vital factor.
The new KFS are based around customer responsiveness and relate to factors such
as:
Minimal inventory
Zero defects
A major point in the strategy is the product itself and we need to achieve the
following:
Develop
Make
Faster
The Product
Change
Better
Cheapet
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