Managing the Manufacturing Enterprise

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Dr. John Psarouthakis

Executive Editor.

We must recognize that the development and deployment of new technology is only one part of our competitiveness problem. Technology may, in fact, not be the primary or most important factor in regaining manufacturing competitiveness. Perhaps foremost among these other factors is a lack of ability in managing the manufacturing enterprise.

There are a number of ways in which our managerial shortcomings manifest themselves.

One is that many accepted management structures and practices do not interface well with advanced manufacturing technology. The product and process flexibility of new technologies, the linking together of different operational nodes on an electronic network, and the “knowledge-embededness” of the new technologies tends to make a traditional “bureaucratic” command structure obsolete. There is a much greater emphasis on inter-functional and interdepartmental integration in the organization of the future,as well as less of a need for hierarchy and accompanying rigid status structure. There is a requirement for multi-skilled employees, and greater responsibilities must be given to each of them than is required by task specialization.

For their part, manufacturing managers must become more actively involved in redesigning the organizations in which they work. Managers must excel at managing the process of change itself in a more flexible and rapidly changing environment. They must be risk-takers in this design process employing radically new forms of work organization, different kinds of communications patterns and more flexible work rules.

The onset of programmable automation technologies are only one set of changes that intrude on manufacturing. Markets are much more dynamic and graphically dispersed.

The character of the work force requires radical and dramatic change. Change, then atever increasing rates (accelerating), becomes the norm.

Thus, we require managers and management systems which can cope with never-ending improvement brought about by change. We must hasten the development of all management as an ongoing commitment to adjust to the dynamics of the current and future business climate.

To illustrate one area of management behavior which requires special emphasis I offer the following. Increasingly, competition in the world market has moved away from simple issues of cost and product design, to requirements of product integrity and quality. I view the inability of American manufacturing managers to manage for quality as pivotal in the declining position of U.S. manufacturing. For too many managers, quality is treated as an afterthought. As something to be monitored or controlled. A typical response is to introduce statistical process control training for operators and first line supervisors, and the purchase of new product quality monitoring technology. But, controlling quality will not do the job.

To manage-for-quality implies a top to bottom managerial commitment. Quality has become the goal for companies to accomplish. All new programs are justified on how they will improve quality from the customers’ point of view. Reward systems, management practices, and near-term objectives are oriented towards the ultimate goal of total quality – product, material, process integrity, people integrity and attitudes. These companies will have to achieve these goals at competitive costs so that we do not lose these businesses to other nations, China, India, etc.


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