|
The
resources necessary to cope with the complexity of
many products, processes or customers generally involve overhead
rather than direct labor
and materials.
This
chart shows the number of overhead employees at each of eight
plants owned by a manufacturer of circuit breakers. The number
of product families ranged from 4-55.
The
correlation is clear:
the more product families in a plant, the greater the overhead
cost for a given sales
volume.
This
particular firm had adopted a marketing strategy of offering a
complete line of circuit breakers from smallest to largest. They
competed against many smaller firms that offered much more
focused product lines, generally, an untenable position.
|
This
example also illustrates
the complex interplay between marketing and manufacturing
strategies.
Adapted
from: Stalk, George & Hout, Thomas M., Competing
Against Time, The Free Press, New York, 1990.
Other Studies
Up
Reduced Overhead In Focused Factories
Multi-Division Companies
Steel Foundry Focus
Basic Metals
Workcell Level Focus
|
