Do You Need an Operational Strategy for Remaining Competitive as a US Manufacturer? Embrace LEAN Manufacturing
Firms that fail to fully exploit the strategic power of operations will hamper their competitive abilities and be vulnerable to attack from those competitors who do take advantage of their operations strategy. To exploit the power of operations effectively, operations must be involved throughout the whole of the corporate strategy. Corporate executives sometimes assume that strategy is only for marketing initiatives. Erroneously, they assume that operations have the flexibility to respond positively to changing demands. These assumptions place unrealistic demands upon the operations function. In the run up to the global economic downturn of 2008 and 2009, to a large extent, manufacturers had given up on improvement initiatives such as Lean. Initiatives were still prevalent but core principles had not been adhered to. A “build it and we can sell it” attitude had been adopted with a narrow focus on pure output maximization. Executive management was focused on decreasing headcount and supporting corporate sustainability issues. In years past the focus around head count was all on an aging workforce and preserving tribal knowledge in more automated work flows.
Since the collapse, manufacturers have responded to business changes with aggressive cuts to inventory and head count. With the recent cuts in employment, today it is all about learning to do more with fewer people by increasing flexibility, cross training, and ensuring safety requirements are not sacrificed. Doing more with less requires leadership and better communication at all levels which results in increased job performance and more accurate information. Analyzing more accurate information gathered with the use of tools such as Key Performance Indicators and Sales & Operations Planning, managers today can examine what has changed and determine how to intelligently ramp up production and inventory, with an eye toward recapturing core Lean principles.
It is important to remember that the adoption of Lean as a manufacturing strategy is the start of a journey, one that can be very profitable. Certain changes will take longer to effect than others. When Lean is implemented and used properly it can become an effective tool to drive continuous improvement. Once integrated into the culture of the business it becomes the standard for daily operations. Decisions revolve around optimizing all activity and keeping waste to a minimum. Companies that do this better than the competition will be the winners regardless of economic conditions.
Question: Could your company gain a competitive advantage by incorporating LEAN initiatives and tools?
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