Lean Manufacturing: Ever since Henry Ford invented the assembly line, industrial innovators have constantly focused on improvement through a variety of different manufacturing strategies. Lean manufacturing is a manufacturing strategy that seeks to produce a high level of throughput with a minimum of inventory. Originally a Japanese methodology known as the Toyota Production System designed by Sakichi Toyoda, lean manufacturing centers on placing small stockpiles of inventory in strategic locations around the assembly line, instead of in centralized warehouses. These small stockpiles are known as kanban, and the use of the kanban significantly lowers waste and enhances productivity on the factory floor. In addition to eliminating waste, lean manufacturing seeks to provide optimum quality by building in a method whereby each part is examined immediately after manufacture, and if there is a defect, the production line stops so that the problem can be detected at the earliest possible time. The lean manufacturing method has much in common with the Total Quality Management (TQM) strategy. Both strategies empower workers on the assembly line, in the belief that those closest to production have the greatest knowledge of how the production system should work. In a lean manufacturing system, suppliers deliver small lots on a daily basis, and machines are not necessarily run at full capacity. One of the primary focuses of lean manufacturing is to eliminate waste; that is, anything that does not add value to the final product gets eliminated. In this respect, large inventories are seen as a type of waste that carries with it a high cost. A second major focus is to empower workers, and make production decisions at the lowest level possible. Additionally, supply chain management factors heavily into lean manufacturing, and a tight partnership with suppliers is necessary; this facilitates the rapid flow of product and parts to the shop floor. Lean manufacturing strategies can save millions of dollars and produce excellent results. Advantages include lower lead times, reduced set-up times, lower equipment expense, and of course, increased profits. It gives the manufacturer a competitive edge by reducing costs and increasing quality, and by allowing the manufacturer to be more responsive to customer demands.    Agile Manufacturing: Derived from direct definition, ‘agile’ means able to move quickly and easily. This meaning then turns out gave an idea to the modern manufacturing industry to increase its quality and productivity. Agile Manufacturing is an operational strategy focused on inducing velocity and flexibility in a make-to-order or configure-to-order production process with minimal changeover time and interruptions. Agile Manufacturing products compete directly with standard products, providing a customer with configurable opportunity to specialize a product. Core concept of agile manufacturing are outlined in the manufacturing below :
'Core Competence Management' relates to workforce at an organizational level (i.e. what skills, knowledge and expertise are required). 'Capability for Reconfiguration' is the ability for an agile organization to take advantage of an opportunity through realignment of their business. The concept of 'Knowledge Driven Enterprise' comes from the belief that a successful business has a strong knowledge and information infrastructure. The 'Virtual Enterprise' is a large, agile organization that can adapt its business units into a different configuration, to allow it to refocus on other tasks/competencies. Smaller, agile organizations can network in such a way to deliver quantity and quality of products or services that they would have been unable to do individually. Therefore, it is an approach that focused on meeting the needs of customers while maintaining high standards of quality and controlling the overall costs involved in the production of a particular product. This approach is geared towards companies working in a highly competitive environment, where small variations in performance and product delivery can make a huge difference in the long term to a company's survival and reputation among consumers. The structure of agile manufacturing :  The aim of this concept is simple, which is to put enterprises or companies in front of primary competitors. One fundamental idea is the idea of using advance technologies to lever the skills and knowledge of people or workers of the organizations involved. Workers must be put together in dynamic teams formed around identified market opportunities, so that it becomes possible to lever one another's knowledge. Through these processes we should seek to achieve the transformation of knowledge and ideas into new products and services, as well as improvements to our existing products and services. The main driving force behind this concept is change. Manufacturing has experienced gradual change and adjustment in response to the existing market circumstances. The changing manufacturing requirements that have culminated in a broad scale of competitive criteria will be briefly reviewed. Clear understanding of the requirements of modern manufacturing is important in order to set a proper plan for strategy implementation. One of the requirements of agile manufacturing is an agile supply chain to function optimally. Supply chain agility represents network capability that the organization possesses. Key to the success of an agile supply chain is the speed and flexibility with which these activities can be accomplished and the realization that customer needs and customer satisfaction are the main goal for the network. The close understanding of this process can be achieved by knowing its characteristics. The characteristics of agile manufacturing are : · Short time-to-market · Fast new product development · Modular design · Modular assembly · Short/fast order processing · Configure to order · Make-to-Order · Low volumes · Low quantities · High product mix · Configurable components · Fast supplier deliveries · Short lead times · Short cycle times · Highly flexible and responsive processes · Highly flexible machines and equipment · Deployment of Group Technology principles · Use of Solids Modeling · Use of advanced CAD/CAM · Quick changeover · Collocated machines, equipment, tools and people · Compressed space · Multi-skilled employees · Empowered employees · High first-pass yields with major reductions in defects. Order Qualifier Criteria: Definition The terms "order winners" and "order qualifiers" refers to the process of how internal operational capabilities are converted to criteria that may lead to competitive advantage and market success. There are interactions and cooperation between operations and marketing. The operations people are responsible for providing the order-winning and order-qualifying criteria that is identified by marketing which enable products to win orders in the marketplace. This process starts with the corporate strategy and ends with the criteria that either keeps the company in the running which is the order qualifiers or wins the customer's business. Order Qualifiers The criteria required in the marketplace and identified by marketing can be divided into two groups, order qualifiers and order winners. An order qualifier is a characteristic of a product or service that is required in order for the product or service to even be considered by a customer. An order winner is a characteristic that will win the bid or customer's purchase. Therefore, firms must provide the qualifiers in order to get into or stay in a market. To provide qualifiers, they need only to be as good as their competitors. Failure to do so may result in lost sales. However, to provide order winners, firms must be better than their competitors. It is important to note that order qualifiers are not less important than order winners; they are just different. Firms must also exercise some caution when making decisions based on order winners and qualifiers. Take, for example, a firm producing a high quality product (where high quality is the order-winning criteria). If the cost of producing at such a high level of quality forces the cost of the product to exceed a certain price level (which is an order-qualifying criteria), the end result may be lost sales, thereby making "quality" an order-losing attribute.
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| Order Winning Criteria, Order Qualifying Criteria and Process Choice Order Winner: The terms "order winners" and "order qualifiers" were introduce by Terry Hill, professor at the London Business School, and refer to the process of how internal operational capabilities are converted to criteria that may lead to competitive advantage and market success. In his writings, Hill emphasized the interactions and cooperation between operations and marketing. The operations people are responsible for providing the order-winning and order-qualifying criteria identified by marketing that enable products to win orders in the marketplace. This process starts with the corporate strategy and ends with the criteria that either keeps the company in the running (order qualifiers) or wins the customer's business (order-winning). (Reference for BusinessEncyclopedia of Business, 2nd ed.) Terry Hill argues that the criteria required in the marketplace can be divided into two groups: order qualifiers and order winners. In this assignment we focus on order winner only. An order winner is a characteristic that will win the bid or customer's purchase. Therefore, firms must provide order winners, firms must be better than their competitors. Firms must also exercise some caution when making decisions based on order winners. Take, for example, a firm producing a high quality product (where high quality is the order-winning criteria). If the cost of producing at such a high level of quality forces the cost of the product to exceed a certain price level (which is an order-qualifying criteria), the end result may be lost sales, thereby making "quality" an order-losing attribute. Order winners are related to market-specific and time-specific with different customers. While, some general trends exist across markets, these may not be stable over time. For example, in the late 1990s delivery speed and product customization were frequent order winners, while product quality and price, which previously were frequent order winners, tended to be order qualifiers. Hence, firms need to develop different strategies to support different marketing needs, and these strategies will change over time. Also, since customers' stated needs do not always reflect their buying habits, Hill recommends that firms study how customers behave, not what they say. When a firm's awareness of order winners and qualifiers the customer's perception that both are very important they are impact to the sales performance. Unfortunately, the researchers found that good sales performance shown when there was a good fit between a firm's and customer perception of the product. On the other hand, when firms with high opinions about their competitive strengths had customers who did not share this opinion, sales performance was negative. The product life cycle also influence a product's set of order winners and order qualifiers. The length of and the sales at each stage of the cycle, as well as the overall length of the life cycle, vary from product to product and depend on such factors as the rate of technological change, the amount of competition in the industry, and customer preferences. During the early part of the product life cycle a production facility with high flexibility (job shop) can generate order winners such as customization. For a mature product a dedicated facility (i.e., a flow shop) can produce high quality and low cost, which are the order winners for many, but not all, mature products. In the other word, different product characteristics require different production processes, and without communication between marketing, which identifies the order winners, which develops the operational capabilities to deliver these characteristics, market success cannot be achieved. Therefore, Hill developed a tool product profiling to ascertain a certain level of fit between process choices and the order-winning criteria of the products. The purpose of profiling is to provide comparison between product characteristics required in the market and the process characteristics used to manufacture the products and make the necessary adjustments. For example, Toyota Company used this factor to wining business. They are regarded by customers as key reasons for purchasing the product or service. Raising performance in an order wining factor will either result in more business or improve the chances of gaining more business. (Jones, Robinson 2007) For Automotive industry, due to high level of competitiveness, Toyota companies are struggling to keep their sales high. Even little problems within car or company may impact company’s future sales dramatically. If we look over market share of Toyota within North America, which takes place of its most sales in comparison with other regions around world, has faced with a serious decline in market share within 2008-2009. Ford and GM also try to improve their market share within North America, while Toyota loses customers during 2008-2009. Therefore, Order winners for Toyota are continuous innovation of Toyota and standardized quality. People, who choose Toyota, are mostly satisfied with innovative internal and external features of Toyota’s cars. Since, Toyota always spares huge amounts of money about research and innovation for car manufacturing. In conclusion, figure 1 show the process for developing the manufacturing strategy and order winner as a one of the marketing plan that can we use in companies strategy, it is lay down in process that to know the external factor of the product for opportunities and the threats in the product group (SWOT analysis).  Reference 1. Hill, Terry. Manufacturing Strategy: Text and Cases. 3rd ed. Boston: Irwin McGraw-Hill, (2000). 2. OPPapers journal by wentian : Order Qualifiers And Order Winners For Toyota (2011) 3. Paul. M. Swamidass: Encyclopedia of production and manufacturing management (2000). |
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