Production strategy

from Wikipedia, the free encyclopedia

The production strategy is the fundamental orientation of a production system for the manufacture of goods and services. It serves to achieve the company 's goals and to maintain or improve the competitiveness of a company. To achieve these goals, production concepts and production tools must be used.

Fields of action

The design of the production strategy is based on specifications in the fields of activity of production:

  1. Location : number, locations, size, collaboration
  2. Production depth : core competencies , make-or-buy , know-how protection
  3. Production resources : technology , capacity utilization , flexibility, standardization, specialization, automation
  4. Production structure / logistics : segmentation , control , lot sizes , flow principle , production layout
  5. Suppliers : number, skills, connection and involvement
  6. Employee structure: number, qualifications, wage costs
  7. Process design: Design processes in parallel or sequentially across the individual plants, customer decoupling point

Differentiation from operational business

The production strategy does not stand alone in a company. Derived from the corporate strategy , it is a functional strategy in combination with other sub- strategies in the company, for example the marketing strategy , the financial strategy or the strategy in the field of research and development. In contrast to the operative business, the strategy comprises fundamental, rather long-term decisions and determinations, which also often exclude other options. If, for example, a company uses the “local for local” strategy to position itself internationally in the vicinity of its customers at its production sites, this is a long-term commitment, as implementation ties up extensive resources. In addition, it cannot realize all potential cost advantages through maximum concentration of production ( economies of scale ) and thus excludes this.

The terms production concept, production method and process, with which the term production strategy is often used synonymously, must also be clearly delineated .

Notes on design

As part of the corporate strategy , the production strategy serves to achieve the corporate goals and must therefore also support the underlying business model in its design . The design in the above-mentioned fields of action can, however, vary depending on the product area or product family . In order for the strategy to be conclusive, i.e. also recognizable as a strategy, the decisions / specifications in the fields of action mentioned should be coordinated. If, for example, a product of low complexity is to be produced in very large quantities with hardly any variance over a long period of time, then it makes sense to manufacture on very specialized systems (short cycle times ) with rigid interlinking (no process branching) at a location with low costs . This approach is referred to by D. Miller as asset intensity . A very flexible manufacturing concept that i. d. Usually a lot of highly qualified employees are required, would not make sense here because it is not necessary.

Conversely, the strategy described would be completely unsuitable if the product were very complex, the variance was high and one also had to react to fluctuations in demand at short notice. Then the rigid manufacturing concept trimmed for cost efficiency (high effort for setting up and converting) with the possibly insufficiently qualified employees (quality problems) and the great distance from the market (high response time) would become a disadvantage. At Miller you can find the term means of production economy (English asset parsimony ).

It is therefore crucial that the selected production strategy fits the existing structures ( company structure , product structure , market structure ) as well as the other strategic determinations, in particular the market and competitive strategy . For example, if the competitive strategy is aimed at differentiated products, then the production strategy cannot be aimed at the mass production of identical goods.

Another challenge is to find a long-term production strategy that can be operationally translated to the individual product families when a new product is launched.

swell

  1. ↑ N. Akca, A. Ilas: Production strategies . (= Work report. No. 28). Essen 2005.
  2. ↑ a b D. Miller: Configurations of strategy and structure: towards a synthesis. In: D. Asch, C. Bowmann (Eds.): Readings in Strategic Management. Macmillan, Basingstoke 1986 - quoted in Course Team Choosing Strategies, Open University. Milton Keynes, 2002, ISBN 0-7492-9273-3 , p. 22.
  • T. Blecker, B. Kaluza: Production strategies - a neglected research area? In: A. Braßler, H. Corsten (Hrsg.): Developments in production management. Munich 2004, pp. 4–27.
  • H. Wildemann: Manufacturing strategies. 3. Edition. Munich 1997.
  • E. Zahn: Production as a competitive factor. In: H. Corsten (Ed.): Handbuch Produktionsmanagement. Wiesbaden 1994, pp. 241-258.
  • E. Zahn: production strategy. In: HA Henzler (ed.): Handbook Strategic Leadership. Wiesbaden 1988, pp. 515-542.
  • P. Henrich: Strategic design of production systems in the automotive industry. Aachen 2002.