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Effective use of materials is one possible component of a sustainable manufacturing strategy. There are many such strategies proposed in the literature and used in practice, with confusion over what they are, what the differences among them may be and how they can be used by practitioners in design and manufacture to improve the sustainability of their product and processes. This paper reviews the literature on sustainable manufacturing strategies that deliver improved material performance. Four primary strategies were found: waste minimisation; material efficiency; resource efficiency; and eco‐efficiency. The literature was analysed to determine the key characteristics of these sustainable manufacturing strategies and 17 characteristics were found. The four strategies were then compared and contrasted against all the characteristics. While current literature often uses these strategy titles in a confusing, occasionally inter‐changeable manner, this study attempts to create clear separation between them. Definition, scope and practicality of measurement are shown to be key characteristics that impact upon the ability of manufacturing companies to make effective use of the proposed strategy. It is observed that the most actionable strategies may not include all of the dimensions of interest to a manufacturer wishing to become more sustainable, creating a dilemma between ease of implementation and breadth of impact. The manufacturing strategy can be defined as a long range plan to use the resources of the manufacturing system to support the business strategy and in turn meet the business objectives. This in turn requires a number of decisions to be made to allow the formulation of the manufacturing strategy. What is Manufacturing Strategy?
Manufacturing Strategy PlanThe manufacturing strategy plan is concerned with the relationship of the manufacturing system and manufacturing recruitment to the business strategy. The manufacturing strategy plan describes the processes and techniques to support the business strategy. What are the business processes which must be developed? The means for manufacturing individual parts and components? The final assembly process? How will the production schedules be determined? What systems must be established to develop this plan? What skills are needed to develop and implement this plan? Who Needs to Know about Manufacturing Strategy:The concepts of strategy, as well as the executive board level decisions, must be described in easy-to-understand terms for the general managers of the manufacture functions. What are the objectives? What is required from manufacturing? What must manufacturing deliver? What is the relationship of manufacturing to the other functions? What are the metrics that will be used? The manufacturing strategy must be considered in the context of the business strategy. How does the manufacturing strategy fit into the markets being targeted for this business? What are the key market segments that will be developed for this business? The manufacturing community must focus from an outside-in perspective rather than an inside-out perspective. The interests of the customers must be established as the highest priority. Why do they buy? Why do they buy from the company? Why do they buy from the company or its competitors? It is very important to identify all of the external and internal factors affecting their behaviour. Procedures for manufacturing strategy:
The primary goal of the manufacturing strategy is to support the business strategy. Two Types of Strategy:
Audit the Current Manufacturing Strategy; Develop a Decision Framework“What is the current financing approach for the company? In most cases, once the internal growth plane is exploited, it is about cost reduction. The basic assumption is that once a company enters the matured stage of the product lifecycle, it must compete on minimizing costs and providing services. The result is a very high share of manufacturing. These companies become more and more dependent on external suppliers. The finance strategy is focused on these suppliers and any external customer. The development of a decision framework helps to address what is the financial structure of real manufacturing companies in the marketplace today. Most of the changes are the result of international competition. In addition, we need to know what is it about the competition itself and how the financial structure of the company in relationship to the competition? Is there anything wrong with the current strategy?” Risk Assessment; Risk Analysis; Management and Mitigation of the Problems“Thorough risk analyses must follow the manufacturing strategy. What are the competitor risks? What are the product risks? The risks are important, but it’s equally important to show what protection the company has to avoid the risks. It’s not enough to simply describe the risks and to develop the plans to avoid the risks. It is also important to understand how the risks can be managed and managed.” Main Elements in the Risk Assessment
How to pick a Manufacturing Strategy?As you can see there are a number of risks associated with new products and manufacturing. The goal is to achieve balance between achieving the objectives and minimizing the risks. There are three popular methods for evaluating new products and manufacturing strategies. These are considered tradeoffs since they do not remove all the risks. They just emphasize different risks. This is why they are effectively a method for “managing” as opposed to “reducing” risk. The three methods are: Conventional R&D, Market Penetration and Small Pilot Production. Conventional R&DThe quantity of R & D and product design development is limited. It is assumed that if there is no existing product, or the existing product has significant issues, that a significant amount of product redesign and modifications are necessary.Of course this will add to the product cost There is a risk that the development time will be much longer than planned. The development times can be long since multiple iterations of product development/improvement require refinement, revisions and testing. The risk here is that we will be stuck with a product that doesn’t sell. The market penetration strategy is unusual since it emphasizes speed over quality. More of the R & D efforts are directed towards reducing the time and cost to get the initial product to market. While we assume that good enough quality is required in order to sell the initial design, the slower nature of the conventional development will have the side effect of increasing the cost of the design. Of course this means that there are more opportunities for competitors so you will need to make sure that you will have a cost advantage. While the market penetration approach emphasizes getting the cost of the initial product down, the small pilot production emphasizes getting the overall cost of the process down. It does this by developing the manufacturing process and verifying the quality of the product before significant capital expenditures are made. There are strategies where you combine the market penetration and small pilot production approach. Which approach is better? The conventional approach is very low risk since all your time and money is spent in R & D. This means that almost all the critical path is within engineering. The market penetration approach does not produce as many critical path issues but if there are issues with the plans and the development of the product they will either result in market share losses or additional R&D. This means that the schedule and cost will extend out as all the issues are resolved. The market penetration approach also exposes you to the additional risk that you may be too optimistic about the timing, the cost or the quality of the plan. Small pilot production approach is very risky too although for different reasons. If you cannot verify the product cost or are dissatisfied with the product quality, you will need to start over. This is a risk because the product development risk is much higher in small pilot production than conventional R&D. This means that any problems you have can cost you dearly. Although the small pilot production method looks very similar to a market penetration approach, it is really a much more risky approach since you are moving towards large scale manufacturing before you have a good understanding of the risks. The three approaches have different timing. The conventional approach is very slow to get started. You are shifting most of the emphasis to the back end of the project. The market penetration and small pilot production approaches are focused on the front end of the project and will spend most of their time on the first two steps: Exploratory Activities, and Product Development . Market Penetration ProductionMarket Penetration Production approach is a high risk approach since you are shifting most of the emphasis to the front end of the project (Project Planning and Allocation step). The main assumption is that we realize that the process development and the project management steps are difficult to justify. You are justified in the belief that there is a great deal of inefficiency in the project management processes and there is a need for significant process development. The risk with the Market Penetration Production approach is that the development time will be much longer than planned. The development times can be long since multiple iterations of product development/improvement require refinement, revisions and testing. The risk here is that we will be stuck with a product that doesn’t sell. The other risk of the Market Penetration Production approach is that the product price is likely to be higher than expected since regular project management processes are not established. You will have to make sure that you are balancing the cost of development with the profit potential of the project. The Market Penetration Production approach emphasizes getting the product to market faster and cheaper than the other approaches. However, the manufacturer must keep a careful watch on the cost and the risk. You don’t want to rush the quality or the prudence of the product. This could cause you to lose customers later. Managing the RiskThere are some steps that can be taken to manage the risks. You can have a combination of strategies. If you combine these strategies, you can reduce your risk and provide better and more efficient results. The first steps that you can use to manage the risks are: Determine how long your product will be in development before the market has a chance to respond to the product. The second step that you can use, “Cost and Timing Sensitivity Analysis” is used to make sure that you are simulating the risks in the project. Build a project scheduleProject organization should be used to manage the project. This includes: The third step is project staffing. This is a combination of organization and team development. It is important to get projects staffed properly so that you can be more efficient. The project should be staffed by experienced people who have a hands-on experience in the project. If you are going to have an inexperienced team, you should use them in support roles instead of project roles. The fourth step is used to supplement the project plan when you add timing and cost uncertainty. This results in the Probabilistic Project Plan. The fifth step is used to give an overall status and balance the project risk. This is the Status and Issue Management Process. The sixth step is to analyze the project. This is a necessary step when you look at a Project Risk Analysis. The seventh step is scheduling software and project management software. The next step is the develop the plan. This is the best way to adjust the project schedule. The initial planning is critical to making sure that all the unknown variables are visible. Planning includes everything from quality, project management, accounting, human resources, and project staff. The second set of steps is to develop an execution strategy. The first step is to provide a plan of approach to the project. The next steps are the techniques used to help the project manage. These steps are:
The risks of the project are manageable by using these steps. Some of the methods used for project risk assessment are:
The final step to manage the risks is to develop your corrective action plan. This will be implemented in the correct phase of the project. Market Penetration Production is a high risk approach since you are shifting most of the emphasis to the front end of the project (Project Planning and Allocation step). The main assumption is that there is a great deal of inefficiency in the project management processes and there is a need for significant process development. The other risk of the Market Penetration Production approach is that the product price is likely to be higher than expected since regular project management processes are not established. You will have to make sure that you are balancing the cost of development with the profit potential of the project. You could end up having a lack of necessary skills to develop the product. Initial stepsThere are a few steps that you will need to take:
The project should be staffed by experienced people who have a hands-on experience in the project. You need qualified and experienced people. If you are going to have an inexperienced team, you should use them in support roles instead of project roles. This post contains affiliate links. Affiliate disclosure: As an Amazon Associate, we may earn commissions from qualifying purchases from Amazon.com and other Amazon websites. |