22 November 2004                       www.strategosinc.com

When Strategy Is Derelict

In most companies, Manufacturing Strategy (or Operations Strategy) is not so much faulty; it is non-existent. The negative consequences are wide-ranging, severe and difficult to correct. Here are some examples:

• Functional departments become Balkanized.

• Marketing promotes unprofitable products.

• Scheduling optimizes software at the expense of inventory.

• Manufacturing Engineers buy disproportionately  large-scale equipment that increases material handling and inventory. 

• Accounting focuses on direct labor when the real problem is overhead cost. 

• Short-term operating decisions produce long-term negative consequences.

• Manufacturing outsources inconvenient products while purchasing is unprepared to cope with the resulting inventory and quality issues. 

An excellent  manufacturing example is Wickham Skinner's classic case study, "The Great Nuclear Fizzle."

Is Lean Manufacturing not a Manufacturing Strategy? Well, the original development at Toyota was certainly strategy. As practiced by many firms today it is more of a prescription: strategy without the strategic thinking. Our series of articles on Lean Strategy explains how to forge the collection of lean techniques into an effective strategy, customized for your markets, products and processes. 

I hope these articles stimulate your thinking. They can lead to a more effective Lean implementation, improve profitability and help your organization succeed. 

All the best for the coming holiday season from the Strategos team.

Quarterman Lee

qlee@strategosinc.com