Some hundreds of tow-bars were constructed to a high degree of quality in a record time period, A high degree of production efficiency in terms of output per labour unit and other simple measures of Productivity on a partial factor basis was achieved.|
The estimated market demand for these towbars was in the order of ten per month.
This contribution to the stock-holdings for this smaller company whilst being of high efficiency from a Production viewpoint was not in the best interest of the Company unless the demand for specialty paper-weights was realised within a short period of time.
Of course the larger corporate companies would never make such a fundamental oversight with the use of the sophisticated MRP and other business tools.
Or would they, how many marketing executives decide to mass produce the latest wonder-product without a consideration of whether the packaging, product delivery mechanisms and process scheduling fits with an existing job-shop method of manufacture. And more importantly whether a mass producing unit can maintain the flexibility for changing styles that has been a characteristic of the market in the past.
The manufacturing operation is a collection of different functions designed to transform raw inputs through a Process mechanism into value added products to satisfy a market need.
At the highest level Management develop a Strategic Plan with the typical requirement to create added value or profit for the stake and shareholders in the industry.
This Strategic Plan, and we mean more than the annual budget manouvres here, must spread right throughout the organsisation and all significant decisions should have a minimum and rapid input from ALL areas in the organisation.
Traditional company structures divide the collections of differing functions into areas of expertise such as Marketing, Production, Financial, Technical, Procurement and Administration and arm these with collections of Key Performance indicators and other useful mechanisms to ensure compliance on an annual basis.
However these collection of differing functions should all have specific strategies consistent with the overall strategies of the firm and these strategies shall inter-relate and be understood by differing business functions. In particular Production, Technical and Marketing strategies should all be congruent.
Any strategic business unit of a company should operate in the context of its existing corporate resources, the general and competitive industry environment and the specific corporate goals of the company and in particular ensure that all of the areas within the Corporate structure are included in the development of ongoing strategies.
In any area that a manufacturer chooses to compete is a set of specific market based criteria for success which can be loosely termed as consisting of requirements for
and it is the ability of all the functions working together within the organisation to meet the "Market based criteria" that will determine the ongoing success of the organisation. All efficiency, KPI, Marketing bonus and other performance indicators should be continually monitored to ensure that they actually do reflect benefits to the overall corporate.
- Efficiency: or minimising the use of scarce resources whilst maintaining high outputs to produce a cost advantage
- Effectiveness: or the ability to meet specific criteria such as delivery schedules and technical capability
- Quality: or the degree to which the product meets customer expectations (not necessarily the rigorous adherence to a pre-determined paper trail) and
- Flexibility or the capability to change as business conditions change