In the commercial world, organisations respond differently to outside events and the process of change. Some constantly seek opportunities for growth while others wait until changes are forced upon them. Some run out of energy and stagnate, while others develop and move forward in the face of stiffening competition. It is often said that ‘if you don’t think about the future, you won’t have one!’
Strategic planning is the process most successful companies embrace when determining the route to achieving their business objective. It is a powerful technique, which mobilises resources behind a plan and is one of the most important factors which distinguishes progressive organisations who have identified and communicated, externally and internally, the type of business they want to become. When Ford developed Ford 2000, it was accepted that the company, although successful, had reached a crossroads. The business faced many challenges in a number of its competitive environments and required innovative solutions to boost global competitiveness, in order to sustain continuous growth.
Global Manufacturing Practices
There are some 600 million cars in use across the globe. Automobile production is the world’s largest manufacturing industry, with sales per annum of £350 billion. The industry supports jobs not only in automobile manufacture but also in components, distribution, finance, insurance, repairs and maintenance, which in Europe alone amounts to 18 million jobs.
In recent years, the industry has been characterised by the global manufacturing practices of Japanese, Malaysian and Korean competitors, which have stimulated a series of innovative developments. A significant factor has been the adoption of lean production processes. ‘Lean production’ was first coined by researcher John Krafcik, who wrote that ‘lean production is lean because it aims to use less of everything’, compared to other forms of production. It resulted in fewer defects and fewer hours to develop products together with greater productivity and lower stock levels. The lean producer has therefore significant cost and marketing advantages, which reduce costs and improve choice.
The location of large new plants by Japanese companies on greenfield sites in the UK has added to the nature and type of competition. Such changes have created a need for companies like Ford to look again at their operations to view how they could improve their competitiveness in order to counter threats and reduce the performance gap between themselves and their global competitors.