people, group, discussion, manufacturing strategy

Manufacturers’ strategies don’t always deliver hoped-for results. In this article, we’ll consider the first of two simple steps to reduce risk and improve the chances of a successful manufacturing strategy.

Developing a Manufacturing Strategy

Manufacturers are no different from other organizations. They have strategies, and many struggle to make their strategies work. That’s not surprising because manufacturing is complex. Very complex. A myriad of different elements must come together to produce success.

The leaders of most manufacturers are competent. Their strategies make sense, and in theory, should work. So, what’s the problem?

Developing strategies requires hard work. But that work pales into insignificance when compared to execution. 

The execution of a strategy requires execution capability for that strategy. But before we discuss the two steps to improve the execution of strategies, let’s define what we mean by execution capability.

What is Execution Capability?

Execution capability is ‘the underlying ability to execute a strategy’.

If an organization does not have the underlying ability to execute a strategy, the strategy will fail. That’s common sense. Because of the complexities of manufacturing, it’s even more important to ensure execution capability.

Let’s draw an analogy with sport. Imagine two athletes preparing for the Olympics. They both hope to win.

man, running, manufacturing strategy

The first athlete has worked hard to prepare. He’s worked on strength, speed, fitness and motivation. He has a strategy for the race. And he has execution capability for his race strategy.

man, walking, manufacturing strategy

The second athlete may have enough strength and an excellent race strategy. He may have worked on his preparation, but he does not have execution capability. He cannot win the race. His strategy will fail.

Structured Planning in Manufacturing  

Manufacturing leaders follow a structured planning process. A typical planning process might look like the following:

planning process, manufacturing strategy

For a manufacturer, they may have a new goal of higher growth. So, the executives decide on a strategy of international expansion. They know this will result in a more complex supply chain. So, they develop initiatives to change the supply chain. They estimate the time to complete the initiatives. They then announce the new strategy and the launch date for their international expansion.

Overcoming Challenges in the Execution of Manufacturing Strategies

The company gets to work on the initiatives. But it’s harder than anyone expected. They need to modify processes, which is time-consuming. And some of the standard processes don’t work well in other countries. It proves difficult to find the right partners in other countries. And developing the right people skills presents a serious challenge. 

These problems cause delays. The launch doesn’t happen on time. Life becomes difficult for the CEO and the executive team. 

Reduce Delays: Schedule an Execution Capability Review

There’s an underlying assumption in the traditional model. Manufacturers assume they can achieve execution capability in the timeframe required. Often they (and most other companies) find this isn’t true, and at their expense.

There’s a step which will reduce the chance of delay or failure – an execution capability review. The review should occur before the manufacturer decides on initiatives. 

The planning process now looks like this:

planning process, manufacturing strategy

An execution capability review has two significant steps:

  1. Define the to-be state the company wants to achieve. In the case of our manufacturer, how will their business look and operate when they’ve completed their international expansion?
  2. Conduct an execution capability gap analysis. Consider the processes, systems, people skills and partners needed for the new to-be state to work. Then identify the gap between what’s needed and current capability. 

A gap analysis may provide a shock. Developing execution capability may prove more difficult than expected. And this might force a change in strategy. Perhaps the international expansion needs to be ready for next year, not this year. And this year, the manufacturer should adopt a simpler strategy they can execute quickly.

And even if the international strategy goes ahead, everyone now has a clear idea of the size of the task ahead. That will inform resourcing and funding decisions. And that will increase the chance of success.

Up Next: Learn about the second of two simple steps to improve the chances of success in the execution of a manufacturing strategy, in “How to Improve the Execution of Manufacturing Strategies (Pt. II).”