Manufacturing Competitive Advantage, Research Paper Example

Abstract

As the organizations within the United States move manufacturing and other business interests back into the United States a series of operational efforts are needed.  Manufacturing capabilities encompass increasing efficiencies, maintaining standard operating procedures and complying with the appropriate rules and regulations.  The business environment changes dynamically based on the increase responsibility to meet financial, operational and strategic goals and objectives while also maintain key effectiveness and efficiencies within the business model.

Business Aspects of Manufacturing Batteries

The organization is built on a corporation’s structure and business model.  The goals and objectives of the business include not only the tactical, short term, mission but also strategic planning of the business for future growth and opportunities.  Strategic planning and execution of business objectives incorporates many tools and techniques to facilitate the opportunity for the success of a project implementation.  Demand planning as well as the inherent variables, including dependent and independent variables, play a contributing role in determining the optimal pricing for goods or services.  The selection of price impacts the supply and demand for a product and the gravity of that impact is based upon the elasticity of the good or service provided.  The factors play a major role in planning the optimal price to provide the most amount of revenue for the good or service or could provide the key leverage point to gain market share in a competitive market. The business model of the organization’s battery division revolves around supply chain management and a centralized focus on distribution of products to their consumers.  With many companies that sell products to consumers, it is the sales force that drives market strategy and determines the best tools to provide key data to their customers. This is due to the fact that the more sales that are generated the more production supply is needed to meet that demand. The unique situation is the dual marketing strategy of corporations based upon their customer.

Factors affecting the manufacturing playing ground reach far beyond the cost of labor in the low wage countries producing parts and systems competing with U.S. goods.  Time to market, agility in manufacturing and optimizing the total supply chain become integral parts to reduce or eliminate non-value added processes to the final product.  In order for the United States to maintain their competitive advantage while maintaining wages for their employees other means to drive cost out of the product must be taken.  Implementing tools to better service the business such as lean manufacturing techniques, Designed for Six Sigma process lines, and 6 sigma methodologies will potentially negate the initial cost differentiation and ultimately lead to the highest quality product at the lowest cost to consumer.

Manufacturing is crucial to the United States economy in ways much more than just the finished good or part.  Manufacturing innovation causes a ripple effect in the microeconomic and macroeconomic environments.  Locally the innovation and process improvement leads to increased ability to produce goods at a lower cost.  This leads to more operating profit and a higher profitability to the shareholders.  When a company is doing well wages tend to increase and a pull demand for greater talent and leadership arises.  Like with any other limited resource, the talent pool for creative, intelligent and potential leaders is limited but with increased demand there would be generation of supply.  Educational opportunities would increase so that roles could be filled by the demand of manufacturing companies.The organization must focus on their goals and objectives in order to meet their strategic intent.

Time to Market

For manufacturing, focusing on optimization and utilizing the tools necessary to get the job done are imperative to success.  In order to be competitive in an ever changing market, products must be available for the consumer to purchase.  Time to market focuses primarily on the manufacturing side of the company.  The financial management portion of the company’s overall strategic portfolio has optimized its stance regarding market trends due to leadership’s push to lean forward and take a proactive approach to customer demands.  The manufacturing segment has multiple moving parts and the entire supply chain is impacted by every make, model or engineering change that occurs with the product (Vernvi, 2007).  With current disparate systems communication between engineers and suppliers or finance and invoicing take days to accomplish tasks.  The goal is to implement a product that allows each function to work in the same workspace allowing real-time access to work queues, messages, notifications or other action items.  Each section of the new product introduction will be reworked and revamped to streamline the process and reduce as much non-value add actions as possible.  The implementation of strategic battery manufacturing optimization not only will improve the functionality of the systems but allows the subject matter experts time to step back and redesign their processes to optimize and configure their work efforts.  The project lifecycle will also undergo a facelift allowing unnecessary approvals and project review stages to be eliminated due to the increased insight my peers, leadership and stakeholders.  Integrating project management enhancements will remove the roadblocks presented in the traditional business operating model and allow the free flow of information on demand when business decisions are being made.  This also allows leadership to manage not only projects at the operating level but make informed decisions on the portfolio of the business (Zenger and Folkman, 2009).

Quality

With an optimized process to get product to market it would be all-for-not if the product delivered was of poor quality. First focus of quality will be on the financial services segment of the business. Quality is of utmost importance when it comes to financial services but measuring quality is somewhat of an art form (Pettersen, 2009). The main objective is to provide line of sight for the customer to their investments.  The goal is to provide real time insight with the ability to make changes, increase or decrease funding, report out on investments, calculate ROI and view historical data and how it compares to multiple other factors such as market trends, S&P etc.  The investor utilizing the financial investment modules will have direct insight at any given time to the information regarding their investments.  This varies slightly from today’s model that requires financial closeouts and end of month/quarter/year postings prior to availability.  Although all information will still be available once the month, quarter or year closes the improved access for on-demand functionality will also be present.

Quality for manufacturing is greatly more tangible than financial services but also just as challenging if not more challenging to control. The requirements for quality are based on the lean management and six sigma methodology encompassing product design, supply chain management, and continual service/project improvement (Hanover, 2006). This being said, it is necessary to have the tools and insight into the entire supply chain so that each section can be measured, monitored and enhanced.  In the current systems available insight and visibility are not accessible so unnecessary time is spent tracking down potential areas for improvement instead of knowing where improvements could be made.  This allows the limited resources of time and funding to be applied in a more effective and efficient manner. The basis for the quality function is based upon defects per million which leads to the 6 sigma methodology (Sager and Winkelman, 2001). All projects for improvement will follow the DMAIC (Define, Measure, Analyze, Improve, and Control) methodology while still maintaining flexibility if new or improvement methods are needed. For the manufacturing section when new product lines are built they will be based upon DFSS (Designed for Six Sigma) (Holweg, 2007).  Having quality controls and processes for improvement will allow wing-to-wing opportunities for improvement which allows greater return on investment when optimizing and alleviating the problems.

Global Markets

Supply chain management is the management and control of goods from the point of origin to the ultimate point of consumption. This also includes all aspects of leading, monitoring and controlling the logistics, schedule, and cost of moving the goods along the supply chain. The increased flexibility and logistical opportunities that come with globalization there is an increased focus on creating value, through supply chain management, while also eliminating wasteful operations within the processes.  Implementation of the appropriate tools to provide customer satisfaction, decrease cost and increase capability in production and quality are essential in becoming a successful organization in the globally competitive market. Supply chain management is a key focal point for realizing potential opportunities in business management. The global markets will require specific investigation on demand and supply chain channels in order to leverage the ability of distribution and logistical operations. Manufacturing in the United States depends on innovation, leadership, total ownership of the supply chain process by American manufacturers.  Continual process improvement and allowing lean management techniques and 6 sigma processes to infiltrate the manufacturing process the manufacturing companies in the United States can maintain their market share and potentially garner greater share due to increased efficiency and quality. The total big picture encompasses the government not hindering companies and opening new venues for trade, suppliers providing agile support with a focus on quality and finished goods manufacturers managing and leading the entire product life cycle through an end to end view throughout the local and global markets.

Competition with other global entities involves trying to hit an ever moving target.  Competing with wind energy production in Germany differs vastly than competing with an automotive manufacturer in Korea but the bottom line to success is reducing non-value add processes through the utilization of proven techniques and tools such as 6 sigma and lean management.   Innovating new ways to compete and thinking of new solutions to get product to market faster is imperative to the competitive nature of global manufacturing.  The United States has the opportunity to shape the competitive environment by forcing productive changes up and down the supply chain and pushing the governing bodies to make changes to policies that hinder growth in a rapidly changing business environment.

Assessment

Assessing risk or problems entails assessing the probability of a specific outcome to occur. This assessment can be accomplished through the application of the basic probability theory. This theory is a mathematical theory that models specific events with different variables or risks to the outcome. This theory allows the user to derive outcomes based on the inputs of variables to the situation. This is extremely useful when trying to develop a picture of what could potentially occur when multiple risks are associated to the same project.

With any type of business activities in which risk is defined it then needs to be measured in both a qualitative and quantitative perspectives.  When measuring risk there are the two different areas of measure. There are also different tools for measuring the types of risks and inputting those results into the project. For qualitative risk management the first important tool is the risk management plan. This pulls together all the findings, risks, mitigation plan, and other pertinent information required for the project team to perform their duties regarding to project scope, schedule and cost. Other tools that help facilitate the qualitative risk assessment include a risk probability and impact assessment, assessment on the risk data, risk urgency assessment as well as incorporation of a probability and impact matrix.  All of these tools would be executed and documented in the risk management plan.  The qualitative risk management tools and techniques all provide the insight into the risks and allows for a prioritization of those risks which facilitates risk planning.

The business model of the battery manufacturer revolves around supply chain management and a centralized focus on distribution of products to their consumers. With many companies that sell products to consumers, it is the sales force that drives market strategy and determines the best tools to provide key data to their customers. This is due to the fact that the more sales that are generated the more production supply is needed to meet that demand.  With the changing marketing environment, consumers have the ability to shop from the luxury of their homes and gather key data prior to going to the actual brick-and-mortar locations to see the products in person. This is why the strategy of the battery manufacturer must embrace not only their internal view of product quality but also present that information externally through the use of ecommerce. The focus on the internal and external technology systems will provide the ability to synchronize the internal systems to ensure quality products to the consumer while also meeting their demand schedule and allowing the availability needed by end consumers to have the product on-demand and in the specifications they desire (Monk, & Wagner, 2009).

Within the planning function supply, resource and planning capabilities are split into separate organizations in which each own a specific responsibility. The Supply function encapsulates supplier management, procurement activities and the logistics for delivery to the plant locations.  The second area focuses on resource planning.  Resource planning includes port management, intra-organizational logistics, forecasts for part supply and part usage as well as the ability to understand the demand of the customer and how it translates into the manufacturing and supply chain management.  The tertiary pillar of the supply chain management operations within the organization is the Demand Management function. The customer collaboration extends to not only the end customer and ensuring the quality products reach the consumer but the customers include retail chain stores, service providers and other outlets. The customer collaboration efforts allow for a synergistic leveraging between customer and the organization to create an environment for success within the supply chain.  The opportunities to reduce cost, increase transit availability and improve efficiencies between organizations all occur due to a collaborative nature among partners. The graph below is depicting the organizational supply chain breakdown based on the three pillars.

With the planning aspects working between the three pillars, the opportunity to hone the supply chain becomes relevant. This organization’s strategy depends on the optimization of these pillars and must embed the ability and drive to continually improve operations, tasks, procedures or any other aspect within the organization that can receive a benefit from improvement. By aligning the business philosophy to achieve a superior supply chain management operation through the installation of best practices as a framework and then working to continually improve the capabilities allows the company to operate on the cutting edge of technology in many regards while also focusing on internal processes and procedures to achieve maximum capability, efficiency and effectiveness.

References

Hanover, B. (2006). Deliciously lean – a mouth-watering introduction to lean manufacturing for printing professionals and sandwich makers alike. SGIA Journal Fourth Quarter 2006. Retrieved from: http://tpslean.com/pdfs/introtolean.pdf.

Holweg, Matthias. (2007). The genealogy of lean production. Journal of Operations Management 25 (2): 420–437.

Monk, E., & Wagner, B. (2009). Concepts in enterprise resource planning. (3 ed.). Boston, MA: Course Technology CengageLearning.

Pettersen, J. (2009). Defining lean production: some conceptual and practical issues. The TQM Journal, 21(2).

Sager, T and Winkelman, S. (2001). Six sigma: positioning for competitive advantage. Retrieved from:  http://www.crowell.com/documents/DOCASSOCFKTYPE_ARTICLES_492.pdf.

Vernvi, B. (2007). Where are the real problems in manufacturing? Retrieved from: http://americanmachinist.com/Classes/Article/ArticleDraw.aspx?HBC=iCopyright&NIL=False&CID=71108&OASKEY.

Zenger, J. H., & Folkman, J. (2009). The extraordinary leader, turning good managers into great leaders. New York, NY: McGraw-Hill Professional.