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IMT-51: Manufacturing Strategy-MT2

IMT-51: Manufacturing Strategy-MT2




Q1) What do you understand by manufacturing strategy? Explain various tools for developing manufacturing strategy.


Q2) Explain how manufacturing is related to the agreed market.


Q3) What is product-mix pricing? Explain the six situations of product-mix pricing.


Q4) Define reliability. Explain the basic elements of reliability.


Q5) What is meant by technical specification? What is technology strategy?




Q1) What is meant by product profiling? Explain the profiling procedure.


Q2) Explain in detail the factors to be considered for selecting a plant location.


Q3) Explain the concept of process rearrangement.


Q4) Define the goals and characteristics of JIT.


Q5) State and explain the three tasks of manufacturing.




Q1) Briefly explain the approaches in investment decision making.


Q2) Explain the two kinds of value and risks in portfolios.


Q3) Enumerate and explain the principles of customer-supplier relationships.


Q4) Differentiate between

a)    Solo sourcing and single sourcing

b)    Downsizing and down scoping

c)    Reliability and durability

d)    Focus regression and focus progression

e)    Operation time and time of operation


Q5) Write short notes on

a)    Supplier rating

b)    QFD

c)    Discriminatory pricing

d)    Benchmarking

e)    Focused plant





Company A produced five kinds of electronic gear for five different groups of customers; the gear ranged from satellite controls to industrial controls and electronic components. In each market a different task was required of the production function. For instance, in the first market, extremely high reliability was demanded; in the second market, rapid introduction of a stream of new products was demanded; in the third market, low costs were critical importance for competitive survival.


In spite of these highly diverse and contrasting tasks production management decided to centralize manufacturing facilities in one plant to achieve “economies of scale”. The result was a failure to achieve high reliability, economies of scale, or an ability to introduce new products quickly. What happened, in short, was that the demands placed on manufacturing by a competitive strategy were ignored by the production group in order to achieve economies of scale. This production group was obsessed with developing “a total system, fully computerised.” The manufacturing program satisfied no single division, and the serious marketing problems that resulted choked company progress.




a. Explain the problems faced by the company in terms of the manufacturing strategy.

b. What are your suggestions to improve the performance of the company?





Development and manufacturing have been integrated into one organization at Company. This was done during a recent major reorganization at the firm. Product design teams are used fairly extensively at the product-line levels and manufacturing is pulled into development process early. In the past, the organization was driven by products and the technical solutions to customer needs. A recent reorganization has caused the company to become more market driven, and marketing is now a major driver on annual strategic plans. This was a significant change in the strategic planning organization of Company. Marketing is done up front, is considered on a part with corporate research, and is pulled into the product design teams. Movement is toward becoming a “systems” company. The company views technology as a “strategic tool.”


A conscious decision was made to centralize research, however, development is moving toward decentralization; this has worked well for Company. University contacts for some R&D are made and maintained, however 95 percent of the research is internally funded. Company does very little outside research.


Company is concerned about monitoring technology and performing competitive benchmarking. The benchmarking process was recently strengthened in part because of the CEO’s interest and push in the area. It is considered an absolute necessity to evaluate competitor’s costs, delivery times, quality, customer satisfaction, goals, inventory, production effectiveness, staffing, and the like. A competitive analysis group is set up that does reverse engineering by obtaining all competitive products, dissecting them; estimating their costs, target price, production volume; and assessing the technical aspects and where competitive products are heading in their technology. Emphasis is not using the process as a product cost-estimating tool but as a way to understand technology processes. Benchmarking became a necessity in the 1980s, when Company learned that the Japanese could sell products for the cost of Company manufacturing.

Central information systems at Company provide a “view of the world” and aid the monitoring process. Monthly letters outline what’s at the trade shows and technical information libraries are maintained.


There is no single responsibility in the company for technology forecasting, although occasionally internal teams are formed for technology assessment. Every few years the company performs a ten-year strategic assessment of upcoming basic technology trends. Basic trends are analysed under the jurisdiction of corporate strategy. Much of the technology forecasting in Company industry is done by “journalists.”


Company’s culture is supportive of technology. Recently the company has increased the percentage of technical people at senior levels, although the company has not had a CEO or president with a technical background as of yet. The emphasis on marketing is also important to Company’s corporate culture. Company views technology management as a cultural and people problem.


Company does not specifically perform technology audits. Technology considerations are integrated during annual strategic planning process by matching technical needs with strategic directions. Business and research directions are becoming more tightly linked. The vice-president for corporate research tries to maintain a link between corporate strategy and the technical directions of the business units.


Because of the movement toward an emphasis on marketing and systems, Company has enhanced its interfaces with customers. Marketing research focus panel are one example of how this interface is managed. Company is also following the trend toward qualification of suppliers. The number of suppliers has been reduced by a factor of 10 in the previous five years.


Strategic alliances have been quite successful for Company. One 50-50 arrangement that originally emerged as an exchange of Company’s technology for Japanese markets now does its own research, product development, manufacturing, distribution, sales, and service. Company has had a long history of European alliances as well. More recently the company has formed a number of alliances specifically for the development of new technologies.

Company recognises and rewards innovation and creativity. An annual patent dinner is held to recognize scientists and engineers, a dual career ladder is available for those who wish to stay in technical careers but are also interested in advancement and top salaries, and Company will often fund an individual’s venture if they don’t specifically fit company plans.


When asked about the key characteristics of their success in technology management, Company executives listed (1) having a clear sense of strategic direction in which to examine technology, (2) moving technical people into key executive positions, (3) fostering a culture that recognizes technology as a key component in maintaining a competitive position, (4) maintaining a balance between technology and marketing, (5) sensing the urgency in the pace of change of technology and markets (movements toward electronics and software in products), (6) willing to delegate more responsibility to project teams, (7) seeking quality individuals who are creative and innovative, and (8) receiving the steady support for technology from top management.



a) Discuss the key characteristics of the company’s success in view of the manufacturing strategy.

b) What is competitive benchmarking? How far company considered it an absolute necessary to evaluate competitors?

c) Explain the role of management and organisation culture in achieving success.

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