Two plants are organized to produce a variety of products in batches. These plants involve a strategy in the lower middle range in which emphasis has been placed on the flexibility required by multiple products. A fourth plant is designed as a line flow set up to produce only a few auto part castings; where cost and availability are emphasized. Finally, the fifth plant is an automated pipe facility producing a highly standardized item in huge quantity on a continuous basis.
The Lynchburg examples indicate an enterprise may need to employ different joint strategies for different product process situations. The resulting planning and control policies and procedures need to be reflective of these quite different strategies; a uniform set of operations and control policies would be quite inappropriate.
It is unlikely that a strategy can remain static over long periods. As products or services mature in their life cycles, consumer preferences become known, designs become refined, and volumes build, and the appropriate joint strategy must reflect these changes. Normally, the progression involves a ore capital intensive productive process that is more integrated, and there is necessarily a loss of flexibility.
An observation concerning the producing strategy of the Lynchburg Foundry to note is that each of the five plants has been specialized in some way. By specialization of each plant, managers have a more restricted scope that allows them to deal with more limited objectives, presumably making it possible for them to do their jobs more effectively. The advantages of specialization apply to managerial tasks as well as to other forms of work.
Skinner (1985) has referred to this concept of specialization by a producing facility as the focused factory. These concepts are closely linked with the overall enterprise strategy and, indeed, are an integral part of that strategy.
A factory that focuses on a narrow product mix for a particular market niche out performs the conventional plant, which attempts a broader mission. Because its equipment, supporting systems, and procedures can concentrate on a limited task for one set of customers, its costs and especially its overheads are likely to be lower than those of the conventional plant. But, more important such a plant can become a competitive weapon because its entire apparatus is focused to accompany the particular manufacturing task demanded by the company’s overall strategy and marketing objective.
Thinking in terms of the five plants of the Lynchburg Foundry, each had been given a focus. The first was focused on one of a kind product. Two plants were positioned to produce multiple products in batches. The fourth was focused on the production of a few auto part castings in high volume, and the fifth was a highly automated pipe factory that was focused entirely on that product. The managers of each facility were presented with a narrower range of customer types to supply that had unique is a large organization, the same general concepts can apply to individual product lines in a smaller organization.
The opposite producing strategy would have been to attempt to gain economies of scale by assembling all of these diverse objectives in one huge manufacturing facility managed centrally through common control systems. Presumably, the overhead per unit of output should be lower, but there is a trade off in terms of meeting the diverse objectives of the several businesses that are involved.
Positioning Strategy for service systems
Mangers of service systems also have choices about how to match the nature of the productive system to the market situation. In the case of service systems, however, the productive system is often intimately bound up with the marketing and service concept. The impression that the service system makes on clients and customers is affected by the way the service is given by personnel and by the way the system is designed.