ALIGNING A FIRMS MANUFACTURING STRUCTURE WITH ITS BUSINESS STRATEGY - A METHODOLOGY AND CASE-STUDY IN A MEXICAN COMPANY

It has been suggested in the literature that a prerequisite for superior performance and business competitiveness is a strong fit between manufacturing and business strategy. This paper presents a diagnostic tool that determines the degree of alignment between a company's manufacturing structure and its business strategy. Implicit in this analysis is the study of the fit between the firm's product line and production processes. The types of business strategies included in this methodology are based on an adaptation of Porter's generic typologies [1], such as cost leadership and differentiation. The intended generic business strategy followed by the firm under study is identified through a survey of competitive methods. Similarly, the manufacturing structure of the business is defined by analysing manufacturing along two important dimensions: (1) process structure systemization, and (2) product line complexity. These dimensions are determined by using quantitative and qualitative manufacturing structural measures (MSMs). The overall analysis of all the MSMs yields a profile of the firm's manufacturing structure which can then be compared with the generic business strategy to determine the degree of At between the two. The methodology has been successfully tested in VILPAC, one of the largest heavy truck manufacturers of Mexico.