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The Flevy Blog covers Business Strategies, Business Theories, & Business Stories.
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Editor's Note: Take a look at our featured best practice, Lean Manufacturing (167-slide PowerPoint presentation). [NOTE: Our Lean Manufacturing presentation has been trusted by an array of prestigious organizations, including industry leaders such as Apple, DHL, Cummins, Stryker, Avery Dennison, Volvo Cars, Baker Tilly, Viasat, Rubix, Techaerospace, Pacific Helmets, BBA, to name just a few.] This [read more]
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When Ford introduced the first moving assembly line, he changed more than the car industry. He transformed the culture of our workforce and the expectations that consumers have of producers. Since then, manufacturers have become the role models of savvy business and global cultural awareness.
Unlike service providers who tend to have strict geographic limits, manufacturers have a global point of view that extends backward in the manufacturing process to suppliers and forward to delivery and customer care. Large scale manufacturers need to look at the entire supply chain and manage it on a worldwide level.
Amazon ranks as one of the best supply chain managers in the world, primarily because it has an eye on its delivery as well as incoming products and customer care. It is no coincidence that Amazon also ranks best in customer service.
When the supply chain breaks down, the innovative manufacturer needs to rapidly adjust accordingly. This is what happened in the mid-1980s when the AIDS epidemic caused a shortage of latex for gloves. Neil Tillitson and Luc DeBecker shored up the shortage by developing nitrile based gloves and starting a new market in the process.
The United States Department of Energy routinely offers collaborative opportunities between companies, educational facilities and the government. With the idea that innovation does not happen without some intellectual muscle, Purdue University has partnered with manufacturers and the U.S. Office of Energy Efficiency and Renewable Energy to develop new sustainable manufacturing processes.
This leads to the marketing aspect of a sustainable manufacturer. Sustainability in business and marketing has a specific and well-researched meaning. A sustainable business is one in which ecological, economic, social and cultural aspects force on the singular fact that man is part of nature. With that in mind, simply look at Elon Musk and Tesla as an example of marketing a sustainable business. Tesla’s entire business plan is developed around making affordable cars that are environmentally sound so that they can make better cars that are more environmentally sound.
Lean manufacturing is the implementation of systems so that there is little or no waste. Nike is a good example of a lean company. In 2013, it decreased energy usage by 13 percent, water by 10 percent and overall waste by almost nine percent, reports Triple Pundit. Besides its impact on sustainable marketing, waste has a solid influence on a company’s bottom line. Waste costs money to remove. In some cases, a lot of money. One Ohio auto manufacturer was spending $12 million annually just on the waste associated with the painting process. Even a 10 percent cut in waste costs could save a company millions.
A lot of important accounting practices have come out of the manufacturing process. One of them is Just-In-Time accounting. A producer wants to have both supplies and inventory on hand to manage workflow, but having too much will place an undue burden on storage space and can lead to spoilage of ingredients. JIT is a system of tightly monitoring supply and demand of supply chain components so that you always have just enough on hand to keep your customers happy. Take a look at Toyota as an example since it was one of the first manufacturing companies to put JIT into practice.
You can download in-depth presentations on Manufacturing and 100s of management topics from the FlevyPro Library. FlevyPro is trusted and utilized by 1000s of management consultants and corporate executives.
For even more best practices available on Flevy, have a look at our top 100 lists:
These best practices are of the same as those leveraged by top-tier management consulting firms, like McKinsey, BCG, Bain, and Accenture. Improve the growth and efficiency of your organization by utilizing these best practice frameworks, templates, and tools. Most were developed by seasoned executives and consultants with over 20+ years of experience.
