Developing a Strategic Plan for Manufacturing Companies
It was one of the world’s largest and most profitable manufacturing icons. Its advertising slogan was, “You press the button, we do the rest.”
Can you guess the company?
In 1884, George Eastman patented the first practical roll film holder for cameras. Before that, photographers had to insert a fragile glass plate for each exposure. Soon, Eastman was selling cameras preloaded with a roll of 100 exposures. Dubbed Eastman Kodak, the company went on to dominate sales of film and cameras. Products like the Brownie, Instamatic, and Kodachrome became synonymous with taking pictures.
Headquartered in Rochester, New York, this blue-chip manufacturer was enormously successful, employing up to 145,000 workers. But in 2012, it filed for bankruptcy. Obviously, something went wrong….
Why Is a Strategic Plan for a Manufacturing Company Important?
If Kodak was the Titanic, their iceberg was a lack of strategic planning. Based on their commanding market share, their business model remained unchanged from the 1930s to the 1970s. For decades, they made no mergers or acquisitions which would’ve brought new perspectives. R&D remained focused on film production—which caused them to fall behind Polaroid and Xerox in developing instant cameras and photocopiers.
A price war with film rival Fuji cost Kodak millions and forced layoffs. Then things got worse. The global switch from film to digital was the death blow.
Surprisingly, it didn’t have to be.
Strategic Planning Makes All the Difference
Ironically, it was a Kodak employee—Steven Sasson—who invented the first handheld digital camera in 1975. In fact, Kodak’s own tech team predicted a complete shift to digital photography by 2010. However, execs were reluctant to pivot towards digital technology, since it would require heavy investment and make their core business less profitable.
Blockbuster… IBM… Pan Am… Whenever change alters the landscape of an industry, some businesses adapt and thrive, while others continue using the old model till it’s too late. The difference is strategic planning.
Strategic planning makes sure manufacturing businesses remain relevant, have a sustainable path to growth, and are able to withstand any unexpected challenges with minimal impact on growth.
What Is Strategic Planning?
Strategic planning is the structured process of coming up with a clear pathway to make reaching shared objectives a reality. Surprisingly, many manufacturing companies attempt to operate without a central plan. This lack of strategic planning can make it impossible to react promptly to changes or reversals in the market. Other bad outcomes of neglecting to plan include lost revenue, inefficiency, and stagnant growth.
With a business strategy in place, everybody is on the same page and focused on the same mission, values, and goals—with an eye to the future.
Is Strategic Planning Only Applicable to Large Manufacturers?
You’re never too large or too small to have a strategic plan—our process is completely scalable up or down to fit your precise needs.
According to the Small Business Administration, 355,467 American manufacturing companies have no employees! 187,862 other manufacturing companies have between 1 and 20 employees. Only 60,099 have between 21 and 500 employees. It’s my belief that every single one of these size categories would benefit from strategic planning.
Building a Manufacturing Company Strategic Plan
The Six Phases of Strategic Planning for Manufacturers
I’ve had a long career in coaching and consulting highly effective and profitable companies in virtually all sectors of manufacturing. In that time, I’ve come to learn that these six vital phases are imperative when developing a strategic plan:
- Phase 1: Perspective – Where Are We Now? Begin with defining current realities. “Perspective before planning” is the key to success. I’ve found that if you have the right perspective, the strategic plan almost writes itself.
- Phase 2: Core Plan – Where Are We Headed? Equipped with proper context, a team can now develop a living core strategic plan. At this point, they have a solid rationale and a set of shared fundamental beliefs upon which to develop this plan.
- Phase 3: Action – What’s Important Now? By identifying key issues, they’re ready to move forward as one cross-functional group. The team-developed core plan is the basis for creating a unified action plan aligned with the master plan.
- Phase 4: Structure – What Form Best Facilitates the Plan? With the action plan in place, the requirements needed to implement it are addressed. Ensure that organizational structure, culture, systems, processes, and staffing all support the plan.
- Phase 5: Management – How Are We Doing? Provide ongoing, systematic feedback to help manage strategic plan implementation. Regular weekly, monthly, and quarterly reviews should be instituted.
- Phase 6: Renewal – What Needs to Change? Team leadership should meet annually to review and renew the core strategic plan. At this session, action items, opportunities, trends, objectives, and goals should all be reset for the coming year.
A Manufacturing Strategic Plan Template
Certainly, I’m biased, but I believe the most effective way to develop a strategic plan is via the help of an outside facilitator. However, not every organization has the bandwidth or budget to support that option. If you recognize the need for strategic planning and want to “self-implement”, I offer up this self-guided strategic plan template that you can use with your team.
Working with a Consultant on a Manufacturing Company Strategic Plan
I consult with manufacturers of every size and specialty—from automotive suppliers to makers of OEM equipment. They all benefit from having an outside, third-party perspective guiding and advising them. In the manufacturing business, the best way to get targeted, unbiased advice is to bring in a third-party strategic planning facilitator.
Coaches like myself can provide objective input on whether your plan is sustainable and achievable, and help you with the essential details involved in developing a detailed strategic plan that lessens the risk of losing your edge—or worse yet, becoming obsolete.
Let’s Get Started
High-profile companies like Kodak, Nokia, and Myspace stumbled badly due to not having a good strategic plan in place for adapting to disruption. The alternative to playing “catch up” is to be proactive! If you’d like to discuss strategic planning or goal-setting ideas for your organization, feel free to contact me. I’ll be happy to set up an informal chat with you.