Strategic Objectives for Manufacturing

Strategic objectives transform a business’s mission and vision statement into a set of specific performance targets. They are measurable, specific, appropriate, realistic and timely, and most are focused on generating profit. Strategic objectives for a manufacturing department support high-level company objectives, set a course for accomplishing common department goals, provide ways to measure and track performance and inspire and motivate department employees.

Strategic manufacturing objectives act as leading indicators to predict future performance. The goal is to create strategic objectives that strengthen a business’s competitive edge, market position and ultimately increase profitability. This is one reason why manufacturing strategic objectives can’t be lukewarm but must instead be both challenging and achievable to ensure the department continually operates according to its full potential. Long-term strategic objectives that extend out for three to five years are critical for creating short-term strategic objectives and action plans that consider what the department can do now to ensure it continues to perform optimally in the future.

Strategic objectives most often relate directly to aspects of business competition and establish a link between market requirements and manufacturing actions. Objectives focusing on cost, quality, flexibility and delivery are the most common, but some departments also include innovation and service. An example of a cost-oriented strategic manufacturing objective might be stated as “produce and distribute the product at a low cost.” A quality-oriented objective might say “manufacture products with high quality and performance standards.” A flexibility-oriented objective might say “readily able to handle product and product mix modifications” and a delivery objective might say “deliver completed products on time and with a short delivery lead time."

A strategic objective can only be as good as its performance yardsticks allow. Performance measurements include both quantitative and qualitative yardsticks that measure performance both within the manufacturing department and from the customer’s perspective. Internal department measurements are mainly numbers-based quantitative assessments. For example, internal flexibility measurements might include tracking set-up time, set-up costs, the length of the production schedule and operating capacity. Measuring performance from the customer’s perspective involves mainly qualitative assessments. Customer-based flexibility measurements, for example, might include a customer’s opinion on product range, the variety of products manufactured and the departments’ ability -- or lack of ability -- to handle product and product mix modifications.

With strategic manufacturing objectives in place, the department can move forward with creating action plans for fulfilling strategic objectives. Action plans address the “hows” of strategic objectives and specifically define, for example, how the manufacturing department will produce products in a cost-effective manner, how the department will achieve quality standards, how the department will respond to changing customer needs and how the department will differentiate and distance itself from the competition.