Manufacturing Strategy

Get moving on planning your business

There are companies that almost never plan their manufacturing strategy. They win a new piece of business, then start the production ramp-up process for that particular product or business; I’ve even talked with a couple of them in the past few months. Whether it was not knowing where to source key components from or how stable their machine capabilities were, they were building risk and a lot of potential stress and cost into their future. Early in my manufacturing journey, one of my mentors taught me about the 10x cost rule (he might of made it up but it still holds): taking ten minutes to create a top-level plan now will save a business 10 hours of the team’s time solving the problem if it’s caught during production and 10 days of the team’s time if the problem escapes to the customer. Scale the cost or time up or down based on the problem, but it is still easier to discuss and empower folks early to look for problems and solve them then and there, as opposed to spending time on the phone with customers and on the shop floor trying to collect past data.

Start planning early

While the plan may not be what occurs over time (Mike Tyson says everyone has a plan until they get punched…), building a manufacturing strategy, relevant to the stage of growth or program you’re working on, is invaluable in many ways. Going through the planning enables early communication across the team, provides a forum for everyone to raise their risks and opportunities, and sets a baseline to monitor progress from. It also helps the folks who are designing the products to forecast their workload, enables the people manufacturing the products to know what future skillsets are required, and allows the quality team to know what data to collect to resolve any issue that may arise. And those are only the internal benefits; a good plan also allows the supply chain folks to start communicating the supply demand and the sales folks to start communications with the customers.

Involve as much of the team as possible

Again, building out a plan is a great time to communicate across the team and empower and engage the team to build morale. Going through the planning process helps leadership to build out the visions and pressure test any objects that need to be met. It also creates a culture where people can bring forth interesting opportunities that may not have been considered. The planning process also highlights any constraints in the system. Two of the big constraints I always ran into were available capital for new equipment or upgrades and the organization design requirements for the new products. A strategic planning cycle is a great time to get the finance team and the facilities team together to plan and prioritize which pieces of capital are needed when and if you can move any of the payments. It’s also a great time to get each of the department leads into a room to discuss what skill sets are needed, are they already available, and what the hiring plan needs to be.

Review the plan regularly

In my previous businesses, we used to do a yearly strategic planning cycle where we would start with a vision and objectives creation session and build out the manufacturing, hiring, and financial plans. We would follow up on the plans quarterly to see how we were tracking. This timeline is not set in stone as businesses will differ.

For the first sessions, aim to set:

Vision and Long Term Objectives

Annual Objectives

Deployment and implementation plans (usually done by department or area)

• Set the review cadence for each of these plans (daily, weekly, monthly)

For manufacturing, build a 1-year future state value stream map

Create RACI Matrices

Think about the culture you want to build during the year, and may include:

• Importance of continuous improvement strategy
• Importance of finances: cash flow, the building of stock, equipment requirements
• Implications of quality: making room for QA
• Safety conscious culture

After the first round of planning, it should be “simpler” as you’ll have discussed the risks and opportunities, so unless there are massive changes in the business requirements, continue communicating and iterating. Also, make sure there is a hard tie to business development plans: customer demand without capabilities will move the business backward.

There are many frameworks and tools for assessing and planning a manufacturing business. Whether you use a BCG matrix to see where the development opportunities lie or a Hoshin Kanri 7 step process to standardize your review cycle, creating a plan will save you time and money in the long term.