Skip to main content Skip to Footer

The flexible manufacturer - Out-performing competition by changing the rules

Read how the concept of the Flexible Manufacturer can help companies beat their competition.

Overview

Large scale is going out of favour for the first time since the industrial revolution of the mid-nineteenth century. Permanent volatility is compelling manufacturing companies to shift their focus from a cost-centric approach to a service-centric model―by way of becoming lean and nimble. The ability to respond to changes in the business environment without increasing operational costs and with little or no delay in response time will be critical. We define this ability as “flexibility”.

Background
In our 2011 manufacturing study, we urged manufacturers in India to regroup and refocus after a protracted end to the economic crisis. Our advice to them was to stop fretting over infrastructural and regulatory constraints, and to look for internal sources of efficiency to achieve world-beating scale. In 2014, we wanted to understand how they had fared in the three years since. And we found that Indian manufacturing companies were fighting a losing battle against unprecedented volatility. This research was conducted with the goal of providing thoughtful guidance to clients on how to align their strategies and operations with market challenges and opportunities.

Key Findings

This research uncovers several insights critical to the task of navigating a manufacturing business through times of permanent volatility.

  • Manufacturing has been and will continue to be the key growth driver, even for the biggest post-industrial economies of the world.
  • Contrary to popular perception, manufacturing’s contribution to a nation’s exports is the true indicator of the sector’s strength, rather than its share in national GDP.
  • Giant manufacturing companies have been critical to the creation of the world’s biggest economies. While some thrive on world-class product quality and innovation, others compete on the basis of unbeatable costs.
  • In an age of permanent volatility, the benefits of being lean and agile are outstripping those previously related with large scale, such as efficiency and cost benefits.
  • Manufacturers must become flexible―able to respond to changes in the business environment without increasing operational costs and with little or no delay in response time.
  • Relatively unrestricted by the legacies of large scale, Indian manufacturers have a greater opportunity to build flexibility, than the global manufacturing giants.