Raghav Narsalay, Aarohi Sen, and David Light summarized results from 250 manufacturers over a decade for Hbr.org. Only 11% of firms could increase demand fulfillment while lowering costs. Key factors included: 1) fewer components, even when increasing the number of SKUs; 2) digitization for design, prototyping, and possibly production; 3) cross-training machine operators to employ multiple skills and give broader feedback on improvements. The authors conclude with the importance of focusing on flexibility as an “increasingly important barometer of future success.”
The 11% that mastered demand fulfillment at lower costs show mastery of technology for efficiency gains but also the importance of balancing human factors with technological ones. Reduction in components is an efficiency gain that could still enable customization for end-customers and meet their preferences. Likewise, enhancements on the shop floor implied new skills and expectations for workers.