Manufacturing
S trategy

THE UNIVERSITY OF
NEW SOUTH WALES

Manufacturing Strategy: Unit 1 - The Nature and Role of Manufacturing Strategy
November 2003

1-0

Manufacturing
Strategy

Unit 1
The Nature and
Role of
Manufacturing
Strategy

Manufacturing Strategy: Unit 1 - The Nature and Role of Manufacturing Strategy
November 2003

1-1

Contents
Overview
Learning Outcomes
What is Strategy?
Organisational Goals
Characteristics of Strategy
Corporate Strategy and the Strategic Business Unit
Linking Manufacturing Strategy with Corporate and Business
Strategies
Conclusion

1-2

Manufacturing Strategy: The Nature and Role of Manufacturing Strategy
November 2003

Overview
This unit examines the nature of manufacturing strategy, and its relationship with corporate strategy on the one hand, and with other functional strategies of marketing and finance on the other.
The first section commences with a description of the goals of a typical manufacturing organisation in terms of purpose, mission and objectives, and how the overall strategy formulation process is concerned with formulating means of achieving an organisations objectives in the presence of competitive forces.
The second section examines the differences between strategic and operations planning in terms of time scale and level of detail. From here we move on to consider the notion of corporate strategy, which considers the corporate mission of the organisation as a whole, the markets in which it will or will not participate, and the nature and role of the separate individual strategic business units of which it is composed. The functional strategies
(manufacturing, marketing and financial) of the individual strategic business units, and how these relate to each other and to the overall business strategy.
In particular, a blueprint for a new role for manufacturing in the strategy formulation process is developed, and reasons are examined for the subsidiary role often taken by manufacturing in the past
Finally we look briefly at how manufacturing strategy and its formulation should be linked by a process of continuous iteration, with corporate and business strategies.

Learning Outcomes
After studying this unit, you should be able to:
•
•
•
•
•

analyse the goals of an organisation in terms of its purpose, mission and objectives appreciate the key characteristics of strategy and the strategy formulation process. understand the differences between strategic and operational planning. appreciate the concepts of corporate strategy, and strategic business units understand the role of manufacturing strategy and its relationship to corporate strategy, and to marketing and financial strategies.

Manufacturing Strategy: Unit 1 - The Nature and Role of Manufacturing Strategy
November 2003

1-3

What is Strategy?
Strategy, according to the dictionary, is variously defined as:
“the art or skill of careful planning towards a desired end”
“the art of devising or employing plans towards a goal”
“skillful management of getting the better of an adversary”:
“science or art of combining and employing resources in planning and directing major (military) operations”
For many years, strategy was used in a military context to denote “grand plans” made in the light of what an adversary might or might not do. In the context of modern business, strategy still has a competitive implication (in relation to an enterprise’s business rivals), but it is also used increasingly to denote broad, overall courses of action, and some form of implied deployment of both emphasis and resources to achieve some comprehensive set of objectives. Note that strategy is defined as being both a science and an art. In this subject we shall inevitably focus on the more systematic (and hence more “scientific”) aspects of strategy development, rather than the
“gut feel” aspects associated with strategy development as an art.

Organisational Goals
Before we look at the concept of strategy in more detail, we must examine
the