The performance of Manufacturing is measured by Throughput i.e. number of pieces or quantity of goods produced over a period of time daily, weekly, monthly, quarterly, yearly etc. Improvement in its performance is tracked and rewarded based on increased Throughput during the given time period. Rewards for those working in manufacturing plants and factories are in direct proportion to the Throughput they achieve vis-a-vis agreed targets. Thus largely, performance of manufacturing is a secularly scalar metric, more the quantity better is the performance.
Over the past decade, the world in which manufacturing companies operate has changed dramatically. The business, competition and demand are volatile, uncertain, chaotic and changing. In fact, manufacturing field itself has become more complex in product portfolio, operating structure and value chain.
As a result, today’s manufacturing setup is subjected to frequent uneven demand in quantity as well as product variety. But a vast majority of manufacturing organizations still remain in the old paradigm of scalarity and continue to measure their production by scalar Throughput. They plan their production by quarterly forecasting and continue to produce goods in large batches. This leads to heavy mismatches between the demand and what they ultimately land up producing. With input costs skyrocketing they lock their money in overproduction that stay in their books, shop floors and warehouses for long enough to choke their cash flow and their ability to respond faster to changes in the market place.
For Full Details: Read the article, “Manufacturing in a Vectorial Space’ on pg 10, in the Manufacturing News, Feb 2014 :
31 March 2014