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THE FOCUSED FACTORY by Whickham Skinner
Transcript of THE FOCUSED FACTORY by Whickham Skinner
Five Characteristics of focused factory
1) Lack of consistent policies
The conventional factory attempts to do many conflicting production tasks/procedures within one inconsistent set of manufacturing policies. The result? The factory is unlikely to be competitive because its policies are not focused on the key manufacturing task essential for competing in its industry.
“The productivity crisis”
Skinner talks about the period before 1970s where industrial health and leadership sectors were taken for granted which resulted to a decline in global market position and a weaker dollar.
The Pessimistic view of the US manufacturing scene VS The Optimistic View of Skinner during the productivity crisis:
Basic Concept in Focused Manufacturing
Towards Manufacturing Focus
A new management approach is required whereby the entire manufacturing system is focused on a limited task relative to the company's competitive strategies and available technology and economics.
Centralize the factory's focus on relative competitive ability.
Avoid the tendency to add staff and overhead.
Let each manufacturing unit work on a limited task.
This results in greater simplicity, lower costs, and a manufacturing and support organization towards successful competition.
The Focused Factory by Wickham Skinner
Heng Mui Sing
History oF the Writer
Proffesor of business administration at the Harvard business school.
Five time HBR author including the "Anachronistic Factory" Report of (Jan-Feb 1971)
Acheiving The Focused Plant
Introduction: Concept of Focused Factory
Basic Concepts in Focused Manufacturing
Lack of Consistent Policies
Reasons For inconsistencies
Towards Manufacturing Focus
Acheiving the focused plant
Factories which focus on a narrow product mix for a particular market niche will outperform the conventional plant which attempts a broader mission.
Example from : American Printed Circuit Company (APC)
2) Reasons for inconsistency
The writer goes on to pinpoint three basic concepts underlying the focused manufacturing after study of approx 50 plants:
a) There are many ways to compete besides producing at low cost
Most industries assume that companies that start out with higher manufacturing costs than its competitors are in trouble regardless of what it does.
However after his research, he noted that many US companies were being forced to shift to products with technological innovation in the form of advanced features as a more critical element of competitive advantage than cost.
b) A factory cannot produce well on every yardstick
c) Simplicity and repetition breed competence
There are a number of common standards to measure manufacturing performance e.g
Dependable delivery processes
Superior product quality and reliability
Ability to produce new products quickly
Focused manufacturing is based on the concept that simplicity, repetition, experience and homogeneity of tasks breeds confidence.
Each key functional area in manufacturing must have the same objective derived from corporate strategy.
a) Process Technologies
Managers usually pick two to three mature and easy to use technologies,otherwise uncertain technologies are limited to one per factory.
b) Market Demands
Usually a given plant will do a good job on one or two demands at any given period of time.
c) Product Volumes
Plants produce product volumes according to consistent philosophies
d) Quantity Levels
These employ a common attitude and set of approaches so as to neither over specify nor over control quality and specifications.
e) Manufacturing Tools
These are limited to only one or two at most at any given time.
However, measures of manufacturing performance necessitate
certain tasks must be compromised to meet others. eg hospital cancer treatment facitities,cosmetic industry
Mangers must determine what to trade-off with the aid of an explicitly defined co-corporate strategy which has its roots in the corporate marketing plan
Professionalism’ in the plant :Production system elements are now set up or managed by professionals in their respective fields e.g. personnel, labour relations, inventory management etc. Each with different production ideologies
The manufacturing task for the plant changed while most operating and service departments kept on the same course as before.
The manufacturing tasks were never made explicit
The inconsistencies were never recognized
Product Proliferation: More and more products are piled into existing plants, resulting in an often futile attempt to meet the manufacturing tasks of a variety of markets ,technologies and competitive markets.
Different manufacturing tasks require different manufacturing policies. Some of the elements of a policy include:
Size of the plant and its capacity
Production scheduling system
Use of inventories
Therefore instead of designing elements of manufacturing policy around one manufacturing task
most factories have six or more inconsistent elements of manufacturing structure ,each of which is designed to achieve a different implicit objective.
Such inconsistency usually results in high costs
Modine Manufacturing Company
Skinner's optimistic View
1. Nowadays, strictly low-cost,high-efficiency strategy is apparently less viable in many industries.
2. Focused plant is a rarity becouse businessmen keep adding new products to plants which were once focused, manageable and competitive.
3. Capital investments can be covered by better customer service and competitive position in order to support higher margins.
The Productivity Phenomenon
The conventional measure of success in manufacturing is productivity.
Since the US companies in many industries were getting beaten hands down by overseas competitors with lower unit costs, there was the notion that “ a good plant is a low cost plant”.
However according to skinner,the failure to focused manufacturing on a limited objective is a common managerial blind spot