A Service-oriented Manufacturing Strategy
Introduces the concept of a manufacturing strategy based on a service
orientation. Traditional manufacturing strategies have often been
driven by cost minimization decisions and have encouraged the
over-reliance by managers on inventories to satisfy demand. In today's
business environment, a reliance on inventory is often not feasible.
Suggests a reliance on capacity available to meet demand, as used by the
service industry. Such a strategy is in direct conflict with most
cost-accounting systems because of the absorption of overhead costs
based on direct labour. Proposes two alternatives for changing the
accounting system, to enhance the move towards the service-based
strategy. Lastly, presents a case study of a US plant to illustrate the
results that a company adopting this approach should expect.
Keywords: Capacity; Cost Accounting; Inventory; Manufacturing; Motor Industry; Service Industries; Usa; World-Class Manufacturing
Document Type: Research Article
Publication date: 01 October 1994
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