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Operations Essay

7953 words - 32 pages

Competing Through
Manufacturing

by Steven C. Wheelwright and Robert H. Hayes

Harvard Business Review
Reprint 85117

HBR

J A N U A RY– F E B R U A RY 1 9 8 5

Competing Through Manufacturing
by Steven C. Wheelwright and Robert H. Hayes

M

anufacturing companies, particularly
those in the United States, are today facing
intensified competition. For many, it is a
case of simple survival. What makes this challenge
so difficult is that the “secret weapon” of their fiercest competitors is based not so much on better product design, marketing ingenuity, or financial strength
as on something much harder to duplicate: superior
overall manufacturing capability. For a long ...view middle of the document...

This is all to the good. What
managers still lack, however is a powerful descriptive framework for understanding how their manufacturing organizations are contributing overall strategic goals, as well as the other kinds of contribution those organizations could be asked
to make. This article provides such a framework.
Drawing on their extensive field research, the authors outline a developmental continuum of four stages that, taken
together, identify the different roles that manufacturing can play in a company’s efforts to formulate and achieve its
strategic objectives. Even more important, they make clear the key choices and managerial challenges at each of these
stages.
Mr. Wheelwright, the Kleiner, Perkins, Caufield, and Byers Professor of Management at Stanford Graduate School of
Business, is a recognized expert on manufacuring industries and the coauthor, with Mr. Hayes, of two previous articles
in HBR.
Mr. Hayes is William Barclay Harding Professor of Management of Technology at Harvard Business School and the
coauthor of three McKinsey award-winning articles in HBR: “Managing Our Way to Economic Decline” (July–August
1981), and “Managing as if Tomorrow Mattered” (May-June 1982) with David A. Garvin.
This article is adapted from their new book Restoring Our Competitive Edge: Competing Through Manufacturing
(Wiley, 1984).

Copyright © 1985 by the President and Fellows of Harvard College. All rights reserved.

EXHIBIT 1
Stages in Manufacturing’s Strategic Role
STAGE 1

Minimize Manufacturing’s Negative
Potential: “Internally Neutral”

Outside experts are called in to make
decisions about strategic manufacturing
issues
Internal, detailed management control
systems are the primary means for
monitoring manufacturing performance
Manufacturing is kept flexible and
reactive

STAGE 2

Achieve Parity with Competitors:
“Externally Neutral”

“Industry practice” is followed
The planning horizon for manufacturing
investment decisions is extended to
incorporate a single-business cycle
Capital investment is the primary means
for catching up with competition or
achieving a competitive edge

STAGE 3

Provide Credible Support to the
Business Strategy: “Internally
Supportive”

Manufacturing investments are screened
for consistency with the business strategy
A manufacturing strategy is formulated
and pursued
Longer-term manufacturing developments
and trends are addressed systematically

STAGE 4

Pursue a Manufacturing-Base
Competitive Advantage: “Externally
Supportive”

Efforts are made to anticipate the
potential of new manufacturing practices
and technologies
Manufacturing is involved “up front” in
major marketing and engineering
decisions (and vice versa)
Long-range programs are pursued in
order to acquire capabilities in advance
of needs.

far more complex than is suggested by the simple
dichotomy between “weakness” and “strength.”
There is no single end that every manufacturing...

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