Practice of manufacturing strategy: Evidence from select Indian automobile companies

Abstract

This paper presents findings based on an extensive survey of Indian automobile companies. Five companies have been selected for detailed case studies. Their experiences in the manufacturing strategy process are analysed. Although the companies represented a diversity in terms of sales volume, product range and geographic location, they shared several commonalties including use of advanced manufacturing technologies and other improvement activities. Competitive strength was sustained through quality, innovation and delivery. The process of strategy formulation varied among the companies in terms of participants, complexity and degree of formalization, the practice of each company is different. The process of manufacturing strategy formulation seems to be in line with corporate strategy, though the companies followed a traditional top down approach in formulation of manufacturing strategy under the umbrella of corporate strategy. A taxonomy is proposed using cluster analysis where the companies are classified in four strategic manufacturing groups: reactive enterprise, neutral enterprise, active enterprise and proactive enterprises. Competitive priorities, order winners and critical success factors are identified for these companies after rigorous discussions with the managers. Based on strategic manufacturing issues, the manufacturing competence index for the companies has been worked out. A framework for manufacturing strategy is also proposed based on experiences of the case companies.