What is the purpose of a factory?
Most people would say it is to produce.
Famed Harvard Professor Wickham Skinner would say a factory’s purpose is actually to be competitive.
Skinner’s idea of “the focused factory” first arose in 1974 as an oppositional ideal to the traditional flexible factory. Here’s how a focused factory works and the benefits competition brings.
What Is the ‘Focused’ Factory?
The focused factory was first described by manufacturing leader Wickham Skinner. He published the textbook “Manufacturing In The Corporate Strategy” in 1978 and the article “The Focused Factory” in 1974, both of which became foundational texts in mass manufacturing.
The main thesis of the focused factory is that conventional manufacturing facilities try to do too many things at once, and this complicated workflow leads to a drop in productivity – or, what Skinner calls a “lack of competitiveness” in its industry.
Too many simultaneous workflows with different targets overwhelm the manufacturing operation because everything is relying on a limited pool of resources – time, equipment, labor, and materials.
One way of describing a focused factory is to say that it is low-mix/high-volume (LMHV), which is true but doesn’t tell the whole story.
There are 5 characteristics of the focused factory according to Skinner:
- Process technologies: limit unproven technologies to one per factory
- Market demands: limit each factory to 1-2 demands
- Product volumes: segregate short runs and custom orders
- Quality levels: neither overspecify nor overcontrol
- Manufacturing tools: limit to 1-2 at a time
Skinner goes into more detail of each of these in his academic texts, but for our purposes the above will suffice. To summarize, each of these characteristics works to achieve the following: a narrower focus will result in a more competitive factory.
Competitive Advantage of a Focused Factory
The focused factory is just one type of manufacturing, another being flexible or mixed manufacturing. Thus, Skinner’s belief doesn’t work for everyone – there are many factories which lack the capability and investment to become focused, and there are also companies which provide more artisanal or handmade products which cannot be produced on a mass scale.
Therefore, there are mixed benefits and drawbacks to a focused factory depending on the company.
Benefits to a Focused Factory
The first benefit of a focused factory is that long-term operating costs will be lower because only the bare minimum amount of equipment will be used on a specific production line. There will be less wasted time due to machine changeover or attunement errors.
The second benefit is that you will be more competitive in your defined niche. By narrowing your ideal market or customer base, you can make your operations extremely lean with minimal waste. There will be less physical material waste because you don’t experiment with processes, and there will also be less waste from unsuccessful product variations due to lack of consumer demand.
Drawbacks to a Focused Factory
One downside to a focused factory approach is that you may need a large investment to begin producing at mass volume in order to see monetary returns. To operate production lines at peak performance, you will likely need top-of-the-line machinery that can create products en masse with little unexpected downtime. This large investment will only be balanced by monetary payoff once you are well into supplying your product line.
Another disadvantage is that while you may be more competitive in a smaller niche, that niche market will be much narrower than if you were catering to different customer bases or several industries. This is similar to playing the game of “higher risk, higher reward” because you have to be fully able to capture that smaller market base.
How to ‘Focus’ Your Factory
So if you aren’t sold on the idea of a focused factory – or if you have decided that your operations wouldn’t benefit from strictly applying Skinner’s advice – you can still take individual insights from his research and apply them today for small improvements.
Repetition & Process Control For Leaner Operations
Repetitive processes performed along the production line is one way to ensure minimal variability. Skinner wrote this about limiting each factory to one or two product lines, but we can add to that in our contemporary era.
Another way to strengthen repetition and muscle memory is to direct workers to perform the same order of operations during assembly with detailed work instructions. By telling each employee on a line the exact actions they must complete in order to produce an item, the whole plant will benefit from increased quality compliance.
Develop a Low-Mix/High-Volume Product Line
You may operate a mixed production factory with many product lines being produced at once, which will make Skinner’s focused factory all but impossible to implement. To experiment with his methodology, try combining one or two under-performing product lines to see if this will simplify your workflow.
You don’t have to provide every single customized option under the sun – in fact, some customers may get overwhelmed with choice.
Another way to become more of a LMHV-oriented facility is to revisit your workflows. Perhaps you can centralize similar workstations so that different products flow through assembly points more fluidly. Perhaps your changeover procedures could be improved to be more efficient overall as you move between product lines. There’s lots to consider in this area of operations.
Find Other Ways To Be Competitive Without Becoming Cheaper
Offering cheaper products or using cheaper materials is just one of the many ways factories can compete within their industries.
One of Skinner’s foundational ideas of the focused factory is that a factory cannot be good at everything. You can prioritize cost, efficiency, productivity, etc., but not all at once.
So instead of being competitive by only focusing on the dollar amount, try another way such as targeting human error, analyzing incident report metrics, or streamlining your supply chain.
Differentiate Between Facilities
Finally, one simple but extremely effective way to become focused is to decentralize your manufacturing operations if you have several different facilities.
In other words, instead of producing many different items at each of your plants, try separating product lines among your factories so that one factory produces Product A, while another produces Product B, and yet another produces Product C.
This way you can develop smaller, more manageable manufacturing ecosystems for higher productivity and competitiveness overall.
