In the foregoing comparison of Hewlett Packard and Texas instruments, HP was the technology frontiersman. Its mission is to remain on the leading edge of technology with new product innovation. What this means for manufacturing strategy is that flexibility and quality are the dominant manufacturing competitive priorities. Price and off the shelf availability are of lesser significance. The production system and supporting organizations and controls must retain the flexibility necessary to deal with the continuing flow of new products and must sacrifice high quality as a trade off for lower production costs.
The elements of manufacturing strategy that are emphasized implement the HP mission are, first, in the positioning of the entire system to emphasize flexibility and quality. Second, the nature of the production job to be implemented emphasizes people and the design of jobs and work systems is of crucial importance in achieving high quality and maintaining flexibility. Also, in order to achieve these ends, the strategic nature of operating decisions must be emphasized. Finally, such complex, hi-tech products require a dependence on suppliers of high quality components on a timely schedule.
The outstanding example of the technology exploiter is Texas Instruments. Like HP, TI brings out a steady of new products, but unlike HP, it follows the product life cycle through to maturity. This aspects of the corporate mission means that the manufacturing strategy must not only retain the flexibility to deal with new products, but it must be able to capitalize on product success with low production costs in order to compete in price competitive markets. Therefore, product development has a closer link with design for low cost manufacture or production design. The processing system must evolve through its life cycle as the product life cycle develops through the volume requirements of introduction, growth, and maturity.
The manufacturing competitive must jointly emphasize flexibility and cost and in addition must be able to convert quickly to a make to stock system to make products readily available in the market place. New elements appear in the list of elements of manufacturing strategy to be emphasized. Because of the emphasis on cost, productivity becomes an overriding concern through process technology. Also, capacity and its location are central to the manufacturing strategy in order to provide sufficient capacity so that sales are not lost to take advantage of market plant location advantages or advantageous factor costs, such as low labor cost areas.
Firms in this category of missions also rely on technological leadership, but they concentrate on custom service to low volume markets, though the dollar volume is not necessarily. Boeing is an excellent example. It customizes its commercial aircraft to the specifications of airline customers. In order to do so, Boeing must maintain a very flexible manufacturing system. Also, the nature of the product requires high quality; compromises on quality would have very negative effects in the marketplace. Rockwell Missile Division faces similar manufacturing competitive priorities, where potential losses to the customers form quality compromises dominates the strategies choices
Positioning the manufacturing system to achieve the manufacturing priorities of flexibility and quality is central, but process technology choices are also significant in the manufacturing strategy. Operating decisions must be made strategically and these complex products require dependence on a system of reliable suppliers.
Customizers have the job shop manufacturing mission. They build to the custom designs of the customer in low volumes. The satellite givision of Hughes Aircraft, for instance must emphasize flexibility and quality. Quality defects could mean huge losses to customers that have been indemnified by insurance policies. Similarly the Rockwell Space vehicle Division deals with an even lower volume in terms of units, requiring a greater emphasis on flexibility. Compromises on quality cannot be tolerated because of the potential economic and human losses. As indicated, the elements of manufacturing strategy emphasized are those of the technological serviceman: positioning, process technology, operating decision, and dependable suppliers. Because of the low volumes, advantages can be found in the use of numerically controlled machine tools, FMS, and other forms of low volume process technology.