Manufacturing Strategy and Operations Assembling a competitive advantage in operations DOWNLOAD

Despite years of experience with operations improvement methods such as Lean and Six Sigma, many manufacturers aren’t able to conduct rapid, integrated operations transformations across a complex production system. It’s a capability they need to address global manufacturing competition, increasing customer expectations and shifting global economics. Companies that can rapidly develop high performing production systems can also develop competitive advantage just as quickly.

Our Manufacturing Strategy and Operations offering brings improvement from the tactical level to the strategic, where operating strategies are clearly linked to customer expectations and business performance. We have helped companies achieve step-function performance improvements in a number of industries and products. From improving plant operations and overall equipment effectiveness to managing global production networks and integrating operating strategies with business strategies – Deloitte has helped clients achieve tangible results. Learn more about the offering.

Case study

Battle ready
Revolutionizing major weapon system production for a major global aerospace and defense company.

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Meet our people

• Doug Gish, Principal, Deloitte Consulting LLP
• Mike Reopel, Principal, Deloitte Consulting LLP
• Allan Krul, Principal, Deloitte Consulting LLP
• Sudhir Menon, Senior Manager, Deloitte Consulting LLP

Related offerings

• Supply Chain Strategy
• Supply Chain Planning
• Sourcing and Procurement
• Product Development
• Logistics and Distribution
• Business Analytics 
• Benchmarking

Learn more about the offering

More than some of the parts
Manufacturers face common challenges when it comes to their production systems. They need to understand what drives core operations. They must exceed customer requirements at a reasonable cost. They have to pinpoint where to add value inside and outside their company on a global basis. Delivering rapid, transformational, sustainable improvements across an entire production system is a difficult task for companies at best. So is working with suppliers to improve delivery performance, reduce cost and bolster quality. And where M&A is involved, targeting and delivering operational synergy is even more complex.
Our Manufacturing Strategy and Operations team provides the methods and experience to achieve breakthrough performance across complex value chains. Our systematic, results-oriented improvement process can help a company and its people achieve tangible, strategic results. We back up the advice and improvement capabilities we bring to clients with a delivery model based on results, not activity.

How we can help

Our Manufacturing Strategy and Operations offering brings improvement from the tactical level to the strategic, where operating strategies are clearly linked to customer expectations and business performance. We have helped companies achieve step-function performance improvements in a number of industries and products. From improving plant operations and overall equipment effectiveness to managing global production networks and integrating operating strategies with business strategies – Deloitte has helped clients achieve tangible results.

Our services include the following areas:

• Manufacturing strategy development
• Facility rationalization and manufacturing expansion
• Production systems and lean operations improvement
• Supplier collaboration and development
• M&A-related operational synergy realization

Bottom-line benefits

A strategic operations transformation supports a company’s cost, service and quality objectives by dramatically reducing delivered unit cost, improving responsiveness, removing process variance and reducing operational risk. We help our clients generate benefits such as:

• Up to 50 to 90 percent reduction in lead times
• Up to 15 to 30 percent reduction in internal costs
• Up to 30 to 70 percent reduction in inventory
• Up to 10 to 40 percent reduction in purchased costs

Five ways to get more value now

Link to the overall business plan. The decisions that shape manufacturing shouldn’t be distinct from the ones that shape the future of the company. Make sure Operations has a seat at the table when overall strategy is created, then translate that enterprise-wide view into a clear set of directives that operations can run with. Define the objectives well enough that any person in any plant can understand and execute them.

Look beyond the “four walls”. If you focus only on plant level improvements, you may make tactical gains while missing strategic improvement. Instead, look beyond the four-walls to examine each product’s end-to-end production network, including external factors that affect it before and after it’s in your hands. Many manufacturers talk about managing the product value stream, but few can translate that into functional steps that save money.

Move problems off the line, not along the line. Focus hard on a specific problem area and you may move that problem instead of solving it. Instead of pushing issues up and down the line, take a systems engineering approach so you can understand where they arise and what the root causes are. If there’s excess inventory at one point in the chain, the answer may lie in line usage rates, space allocation, sourcing or how parts are used.

Use pilots to gain momentum. Don’t let best get in the way of better and don’t let your plan for a comprehensive production overhaul stop you from realizing quick wins. Pick a pilot value stream and execute a systematic improvement approach – you’ll learn from it, demonstrate value and be better able to sell change to the organization. This brings a better focus to the improvements you execute tomorrow.

Insist on results. Start with a clear understanding of what success is and how it will be measured. At the end of the day, an operational transformation effort must have a meaningful impact on overall business performance. Tactical improvements don’t add up to strategic change. When you hear about dramatic improvements, insist upon a clear link to business impact and value.

Manufacturing Strategy and Operations in action

When this aerospace and defense company landed a major military contract, it needed to develop a global production model to deliver a complex weapon system faster and more efficiently. Deloitte helped the company define the overall production system and its governance and a detailed implementation roadmap for managing the transition to full-rate production. Then we helped the client implement it. The company is on its way to increasing throughput by a factor of 10 in less than four years while generating hundreds of millions of dollars in benefits.

As used in this document, “Deloitte” means Deloitte & Touche LLP, which provides audit, assurance and risk management related services, Deloitte Consulting LLP, which provides strategy, operations, technology, systems, outsourcing and human capital consulting services, Deloitte Tax LLP, which provides tax services and Deloitte Financial Advisory Services (FAS), which provides financial advisory services. These entities are separate subsidiaries of Deloitte LLP. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting.