Evolution of Manufacturing Strategy

Changing customer demand and technological innovation have always influenced the organization of manufacturing enterprises. Starting with Henry Ford’s moving assembly line, the operations strategy of successful enterprises were a key part of their competitive advantage.

QRM’s companywide focus on time enables companies to exploit the most powerful trend in manufacturing today: the increasing demand for customized products at shorter lead times. Driven by technological innovation and customer demand, and accelerated by the vast possibilities of modern communication technologies, product customization is a powerful development destined to dominate 21st century markets.

Evolution of management strategies in manufacturing:

In the 1960s, U.S. manufacturers enjoyed a golden era with almost limitless opportunities. The ongoing recovery from World War II and the Depression drove exceptional growth while traditional competitors like France, Germany, Italy, Japan, and the United Kingdom were still rebuilding their industrial capacity. U.S. firms dominated the world markets and scale was the most important factor for success. Ever larger factories sprang up, their size only limited by managerial constraints. Giant U.S. corporations such as Ford, General Motors, General Electric, and IBM flourished.

When European and Japanese firms reentered the world markets int eh 1970s their ability to produce goods more cheaply (but not necessarily better) started to erode U.S. market share. In response, U.S. firms concentrated their competitive strategy on cost/price issues. Controlling and reducing cost became the order of the day. This focus on scale- and cost-based thinking is still firmly entrenched in may organizations today.

In the 1980s, Japanese companies proved that there does not have to be a trade-off between cost and quality. A focus on improving quality could actually lead to cost competitiveness. Many U.S. firms were late to realize this new manufacturing paradigm and lost significant market share.

The most recent paradigm shift in manufacturing has led to a focus on speed. To take the quality paradigm a step further, a company competing on speed can see improvements in both quality and cost—in addition to short lead times. Companies following this new paradigm have a clear competitive advantage in markets increasingly demanding customized products.