Focused Factory

1. 1
INDEX
BACK GROUND
Types of Manufacturing Plant Layout, 1970 Era
USA VS Japan Economy, Need for New Approach
BASIC CONCEPTS & CHARACTERISTICS
Study Across 50 Factories across USA by Prof
Wickham Skinner and Presented New Approach
TOWARDS FOCUS, HOW TO ACHIEVE
Major characteristics of Focus Factory, comparison
and how to achieve the objectives .
FOCUSED FACTORY
Study Across 50 Factories across USA by Prof
Wickham Skinner and Presented New Approach
INCONSISTENT POLICIES AND REASONS
The topic highlights inconsistent approach in
present conventional approach and reasons.
CONCLUSIONS
Conclusions on when and how the Focus Factory
Approach works. Existing factory vs New Factory
01.
03.
05.
02.
04.
06.
FOCUSED FACTORY – A NEW APPROACH
ERA – 1970’S
Presented by
SHASHIKANTH PATIL, IIM(A) SMP BL06 20122

2. 2
Wickham Skinner is considered the father of Manufacturing Strategy. His book "Manufacturing In The Corporate Strategy",
published in 1978, set out the principles on which most other work has been based. His seminal article "The Focused Factory"
was published in The Harvard Business Review in 1974.
Dr. Skinner, a graduate of Yale, is an emeritus professor at Harvard University, where he taught and researched in the field of
industrial management. Dr. Skinner has published three books, co-authored ten case books, and has written extensively for
business magazines and journals.
The article according to author is an analysis based on cases written in electronic, plastics, textile, steel and industrial equipment
industries supplemented by furniture industry. His research and teachings have cantered around problems and opportunities US
manufacturing companies particularly in regards to relationship between production operations and total corporate results.
Wickham Skinner

3. 3
BACK GROUND
Job Production, Fixed Layout : In fixed layout or Job Production
the Machine, Tools, Manpower and Material moved towards a fixed position for
assembly. Examples are Ship building, Aero plane, Pressure Vessels, Tanks. Plant
installation, Projects.
Batch production : In batch production, the manufacturing or products are produced
in batched following either PRODUCT LAYOUT or FUNCTIONAL Layout. Product layout is
the flow of processes are arranged in sequence where as in Functional layout the set of
similar processes are arranged in sequence or may be differently but the products /
components are produced in batches and brought in place for assembly.
Examples : Pharmaceuticals. Chemical Industry, Beer industry, Auto components,
Electronic,
Mass production : In Mass Production is the manufacturing of large quantities of
standardized products, often using assembly lines or automation technology. Mass
production facilitates the efficient production of a large number of similar products.
Examples : Automobile, Food Industry, Electronic, Home appliances.
Product design is generally similar, automation is major characteristic but still human
intervention is essential at various stages
Continuous Production: Continuous production system involves a continuous or almost
continuous physical flow of materials. It makes use of special purpose machines and
produces standardized items in large quantities. The examples are petrochemical, cement,
steel, sugar and fertilizer industries, refineries, Chemical Industries,
Mass customization is a marketing and manufacturing technique which combines the
flexibility and personalization of custom-made products with the low / Moderate unit costs
associated with mass production. Other names for mass customization include made-to-order
or built-to-order
JAPAN : Japan was able to soar from the 1950s to the 1970s. Furthermore, Japan also
completed its process toward industrialization and became one of the first developed
countries in East Asia. Japan's economic growth in the 1960s and 1970s was based on
the rapid expansion of heavy manufacturing in such areas as automobiles, steel,
shipbuilding, chemicals, and electronics. The secondary sector (manufacturing, construction,
and mining) expanded to 35.6% of the work force by 1970.
USA : The 1970s saw some of the highest rates of inflation in the United States in recent
history, with interest rates rising in turn to nearly 20%. It was a traumatic economic decade of
stagflation, a three day week and the return of unemployment.
ECONOMY OF JAPAN VS USA 1970’S
Productivity : The definition of “productivity” from a manufacturing perspective is “the
ratio of output to input in production” and is a measure of efficiency

4. 4
BASIC CONCEPTS AND CHARACTERISTICS
The conventional factory attempts to do too many conflicting production tasks within one inconsistent set
of manufacturing policies. The chief result is the plant is likely to be non competitive because of its policies
are not focused on the one key manufacturing tasks essential for successfully competing in its industry.
1. The perspective here is how can we increase productivity rather how can we increase
competency
2. Looking at efficiency of entire manufacturing organization
3. Learning to focus on each plant in limited concise, manageable set of products,
technologies, volumes and markets
4. Learning to structure manufacturing policies and supporting services so that they
focus on one explicit manufacturing task instead of many inconsistent, conflicting
implicit tasks
5. The factory that focuses on narrow product mix for a particular niche market will
outperform the conventional plant which attempts broader mission.
Basic Concepts
1. There are many ways to compete besides by producing at low cost
2. A factory cannot perform well on every Yardstick
3. Simplicity and repetition breeds competence
Major characteristics
1. Process Technologies
2. Market Demands
3. Product Volumes
4. Quality Levels
5. Manufacturing Tools
Lack of consistent policies
1. Size of the Plant and its capacity
2. Location of the Plant
3. Choice of equipment
4. Plant Layout
5. Selection of Production Process
6. Production scheduling system
7. Use of inventories
8. Wage system
9. Training and supervisory
approaches
10.Control system
11.Organization Structure
Reasons for inconsistency
1. Functional Goals not aligned to Organizational
goals, MFG task not made explicit
2. Manufacturing variability while supporting
department on same course
3. Inconsistency not recognized and acted upon
4. Management was focusing on plant utilization
than core MFG competence
TOWARDS MANUFACTURING FOCUS
1. New Management Approach with emphasis on core manufacturing competence
2. Focus on ENTIRE manufacturing system on limited task defined by competitive
strategy with common objective
3. Centralize the factory’s focus on relative competitive ability
4. Avoid the common tendency to add staff an overhead to save on direct labor and
capital investment
5. Let each manufacturing unit work on limited task instead of usual complex mix of
conflicting objectives, products, technologies
6. Centripetal Force that pulls inward towards once central focus
How to Achieve
1. Develop an Explicit brief statement of Corporate Objectives and strategy
2. Translate the Objectives and strategy statement onto what this means to
Manufacturing – SMART GOALS
3. Make careful examination of each element of the production system
4. Re organize the Elements of structure to produce congruent focus
5. If there are Multiple Products that presently being managed through same set up,
evaluate for Multiple Plant within Plant (PWP)
6. PWP are plant within plant that focuses its own manufacturing processes / task
with its own work force management, production control, organization structure,
workers training and incentive with clear focus. The engineering of processes ,
equipment and materials handling are specialized as needed

5. 5
Production system element
Present Approach
(Conventional Factory)
Implicit Manufacturing
Tasks of Present approach
Changed Approach
(Focused Factory)
Equipment and Process policies
One Large Plant : Special purpose
equipment : High Volume tooling ;
balanced capacity with functional
layout
Low manufacturing costs on steady
runs of a new large products with
minimal investment
Separate Old,
Standardized products
and new customized
products into two plants
within plants (PWP). For
new PWP provide general
purpose equipment,
temporary tooling and
modest excess capacity
with product oriented
layout
Work Force Management
Specialized Jobs with Narrow job
content : Incentive wages: few
supervisors : Focus on Volume of
production per hour
Low cost and efficiency
Create fewer jobs with
more versatility. Pay for
breadth of skills and
ability to perform a variety
of jobs, provide more
foremen for solving
technical problems at
work place
Production scheduling and
control
Detailed; frequent sales forecasts;
produce for inventory economic lot
sizes of finished goods; small
decentralized production
shceduling group
short delivery lead times
Produce to order special
parts and stock of
common parts based on
semi annual; forecasts.
Staff production control ti
closely schedule and
centralize parts
movements
Quality Control
Control Engineers and Large
inspection groups in each
department
Extremely reliable quality No change
Organization Structure
Functional; production control
under superitendents of each area;
Inspection reports to top
Top performance of the objectives of
each functional department, i, e
many tasks
Organize each PWP by
program and project in
order to focus
organizational efforts on
bringing new products into
production smoothly and
on time
EXHIBIT 1
CONCLUSIONS
1. The prevalent use of COST VS EFFICIENCY as yardstick for
planning, controlling, and evaluating US plants has helped
developing the focused approach.
2. The increased pressure on US industries due to low cost and
stagnant economy, the US industries with conventional
approach were not able to compete in many industries
3. Productivity and economies of scale cannot be the ONLY
guiding principle when any Unit is not making enough profits.
4. Reversing any Existing Business for BUSINESS reprocessing
to evaluate whether FOCUSED approach is viable or not a
completely impossible approach.
5. Manufacturing as USP or competitive weapon could be used
to offset additional capital investment while FOCUS approach
is implemented.
6. With CLEAR SENSE of direction, PROVIDES PUNCH AND
POWER which can easily understood and assimilated by
member of organization.