Manufacturing process innovation is crucial for creating a competitive manufacturing industry. This section examines the important features that have to be addressed when designing how your internal manufacturing operations and supply chain should work. 
The Japanese Techniques
The ability to design cost effective manufacturing processes capable of delivering high quality products on time was the significant critical success factor for the Japanese companies that have transformed manufacturing industries. Fifty years ago, these companies employed their organisations’ best people to establish new manufacturing paradigms focused on delivering value to their customers.  These paradigms were totally contrary to those of the contemporary traditional western organisations, as shown in Table 1.
 
Table 1 Contrasting approaches in the 1950s – Japanese vs Western
 

Item
Traditional approach
Japanese approach
Stock levels
High stocks, considered an asset
Low stocks to avoid the waste of overproduction
Batch quantities
Large batch quantities deliver higher productivity
Small batch quantities, adjusted daily meet customer needs
 
Labour
Dedicated labour, focusing on single, defined tasks
Flexible labour, able to perform a variety of tasks and suggest improvements
Quality control
Independent inspectors verify quality
Capable process, quality confirmed by operators
Facilities
Machines grouped to perform specific, like operations
Machines grouped in cells making complete products

 
Companies in the West now understand and, in some cases, have embraced, many of the Japanese concepts such as;
·         Lean Manufacturing
·         Just in Time
·         Total Productive Maintenance
·         Single Minute Exchange of Dies (SMED)
·         Etc
 
The areas which your senior management team will need to consider if the best outcome is to be achieved for your company are listed below and discussed in the following sections:
 
1.      Manufacturing strategy
2.      The new product introduction process
3.      Design of manufacturing processes
4.      Continuous improvement programmes
1          Manufacturing Strategy
If you are considering a move toward the Japanese techniques, or, indeed, any major changes, it is vitally important that before you begin you are absolutely clear on what you need to achieve.
 
Your senior management team will need to ensure that they have developed a clear and explicit manufacturing strategy that fully supports and aligns with the overall strategy for the business and will deliver the operational results specified there.
 
One technique for developing a manufacturing strategy is to describe the factory you wish to see when entering the front door, providing a commentary on the following aspects of your future factory:
 
o    Overview of manufacturing facilities
o    Vertical integration and strategic sourcing
o    Suppliers and supply chain management
o    Location of factory and facilities
o    Manufacturing systems and equipment
o    Core manufacturing activities that protect product and manufacturing knowledge and retain intellectual property
o    Factory capacity and equipment process capability
o    Master scheduling, production planning and material control systems
o    Measures of performance, methods of collection and reporting process
o    Organisation, operations management and support activities
o    Quality systems and continuous improvement initiatives
o    Policies for health and safety of employees and environmental protection
o    Human resources and training requirements
o    Involvement and resources needed for new product introduction
o    Investment in process innovation
2          The New Product Introduction Process
The processes needed for manufacturing new products should be designed at the same time as the product itself.  People experienced in manufacturing should be establishing the costs and technical implications of all aspects of the product design, including:
·         Complexity
·         Materials
·         Dimensional tolerances
·         Tooling investments
·         Production volumes
·         Product variety
·         The investment needed in:
o    Capital plant
o    Equipment
o    Facilities.
 
It is acknowledged that 70% of the final product costs and many of the product reliability issues are incurred and fixed at the design phase.  This is understood very well by automotive companies with a dominant manufacturing presence, such as Toyota and Porsche, which devote extensive resources to ensure that the design phase of their products minimises the manufacturing difficulties and, hence, cost. (Toyota is now the largest car manufacturer). 
3          Design of Manufacturing Processes
If you are setting up a new manufacturing facility, or if you are considering a major change in your business in order to achieve your strategy, your senior management team will need to realise that they must allocate the best people to designing how the internal manufacturing modules and supply chains will operate. The future of your business may depend on the quality of the design.  Few companies have the resources to attempt this a second time, so you will be living with the consequences for some time.
 
The design team will need to identify the most effective way to manufacture the company’s products, using your supply chains to provide specialist technologies or reduce costs, whilst retaining the intellectual property and tacit knowledge which protects your business from competitors. 
4          Continuous improvement programmes
The development of manufacturing strategies and the design of effective production processes by experienced engineers are important and must be fully supported by senior managers, but these only offer partial solutions.
           
Looking at the experience of companies entering MX tells us that the more successful companies invest considerable effort and resources into continuous improvement programmes.  The programmes involve people who actually perform the tasks being given, initially, training and then working time to improve the way they work. 
Conclusion
It is the combination of these two aspects:
·         the excellent manufacturing process design
·         followed by consistent and continuous improvement
that can ultimately lead to world class performance.

Guides:

Strategy and process innovationStrategy and process innovation

Strategy and process innovation

Designing manufacturing processesDesigning manufacturing processes

Designing manufacturing processes

Responsive manufacturing operationsResponsive manufacturing operations

Responsive manufacturing operations

Monitoring and controlling process innovationsMonitoring and controlling process innovations

Monitoring and controlling process innovations

Customers and process innovationCustomers and process innovation

Customers and process innovation

The environment and process innovationThe environment and process innovation

The environment and process innovation

Investing in manufacturing equipmentInvesting in manufacturing equipment

Investing in manufacturing equipment