Companies must link manufacturing objectives to their strategic business objectives. Manufacturing objectives such as improving quality, reducing costs, speeding throughput and increasing production flexibility help companies compete more effectively and meet their customers’ price, quality and delivery requirements.
Improving quality is a key manufacturing objective. Companies must produce quality products that meet or exceed customers’ expectations and minimize waste. Quality products can help to improve customer satisfaction, increase sales and improve customer retention. In sectors such as aerospace, automotive or pharmaceuticals, companies may have to meet customers’ or industry quality standards as a condition of conducting business. Poor-quality products can damage a company’s reputation and lead to loss of revenue if customers move to competitors. Poor quality also increases costs through time spent reworking defective products and the cost of replacing wasted materials.
Companies set cost-reduction objectives to ensure they can offer competitive prices and make a profit. Manufacturing teams can cut costs by reducing inventory, sourcing from lower-cost suppliers, increasing productivity, automating processes and implementing quality processes that minimize waste and reworking. Lean manufacturing techniques aim to minimize costs by producing more from the same resources, reducing the time between receipt of raw materials and distribution to customers, and minimizing logistics costs.
By setting increased flexibility as a manufacturing objective, companies can meet a wider range of market requirements and improve competitive advantage. Establishing flexible production facilities enables companies to offer customized products tailored to customers’ needs. Companies also can produce a wider range of model variations on the same production line. Outsourcing part of the production to contract manufacturers can help companies achieve flexibility objectives.
Improving the efficiency of the supply chain can help companies achieve their cost, quality and flexibility objectives. Improving communications by implementing a secure network, for example, can ensure that all supply chain members can respond quickly to changes in market demand or new business opportunities. Communication throughout the supply chain also helps to avoid excessive inventory and eliminate delays in supplying critical components. Companies may improve supply chain integration through mergers and acquisitions so they can secure access to strategic materials or implement consistent supply chain-wide quality standards.
Factors such as scarcity of raw materials, customer demands and regulatory requirements make sustainability an important manufacturing objective. Companies can improve green production through strategies such as getting supplies from sustainable sources, making use of recycled materials, reducing the environmental impact of their logistics operations and investing in manufacturing facilities that minimize energy usage.