A manufacturing plan is comprised of the following, as a minimum:

1. Manufacturing strategy: who will actually do the work? Are the steps mapped out, the critical paths recognized? Is the planned production mapped appropriately to customer demand? On what basis do you decide whether to work in-house or by contract?
2. Facilities required: lease or own?
3. Quality assurance: how will you address compliance, certification, etc? Is there a process for ensuring customer satisfaction? How do you know the product is ready to go out the door?
4. Organizational issues: who in the company is responsible for implementation of the plan, and in what ways? Do you require outside relationships to execute the plan? to fulfill a contract?
5. Management team: does everyone understand their role? Are you prepared for things to go wrong?
6. Resources: do you have a plan for inventory control? machine maintenance/replacement? Do you know about how much money you'll need? when? for what?
7. Assembly steps: especially critical at component interfaces, which are common failure points.
8. Master parts list: at each step in the assembly, new parts being introduced must be examined and referenced to the list. Some companies automate this part of the process, using a method such as Electronic Data Interchange (EDI). If you adopt this method, be sure to recognize that as of 2000, there's no universal standard for
   • an information delivery system for EDI
   • part numbers -- which can especially be a problem because some parts differ only in specs and not in fundamentals
   and lacking a standard can cause a bottleneck at interfaces between your shop and a vendor's or supplier's.
9. Data collecting: at each step of the process, data is related to customer requirements.
   • Corrective actions are documented in many cases before they're needed.
   • Operators must recognize that the actual numbers being collected are secondary to the process behavior.
   • Missing data must be supplied via special knowledge (e.g. by experienced operators who recognize signs of regular behavior).

Manufacturing strategies can be implemented in phases. If you're in a small company, or working with a new technology, initial development may call for outside fabricators for your parts. In such a case, you may assemble prototypes in-house. Readers of the manufacturing plan will certainly be interested in your capacity for manufacturing and assembly; they'll also want to know about your relationships with fab shops.

Outside fabricators may still be useful even if you have your own facilities for technology development and commercialization. Such facilities, whether you lease or buy, provide engineering office space while allowing you to continue to manufacture and assemble prototypes and commercial products.

Quality systems are usually necessary to keep your products competitive. You may even find that compliance with such standards as ISO 900x will be necessary for you to compete for US government or international contracts. In such cases, a small company may find itself obliged to rely on outside fabrication. Complete implementation of quality systems will be a major hurdle in the transition from contract to in-house manufacturing.

As is the case with your business plan, your management team plays a vital role in the manufacturing plan as well. The difference is that while the management team must emphasize its strengths to investors through the business plan, in the manufacturing plan the team emphasizes its understanding of its various roles in the manufacturing process.

• CEO: strategic planning, business plan development, industrial partnering, investor liaison, customer negotiations, resource allocation, company policy, management recruitment.
• CFO: business plan development, financing, investor liaison, customer negotiations, contracting, purchasing, vendor relations, financial reporting, tax, risk management, insurance.

Sample management responsibilities (continued):

• COO: inventory control, safety, procurement, customer liaison, labor relations, machinery maintenance and replacement, assembly.
• VPs: business plan development, marketing plan development, human resources, sponsorship liaison, joint venture opportunities, corporate documentation, licenses, public relations, brochures, tradeshows, press releases, training, marketing.
• Chief/VP Engineer: Lead researcher status on certain contracts, product development, testing regimen, analysis, reporting, field service, compliance with codes and safety standards, quality assurance.

A cost-effective manufacturing plan reflects the relationships between process variables and product quality, where "quality" is defined in this case by design objectives. In order to discover relationships, you have to bring expertise in experiment design and analysis of variance to bear; "working harder" and paying more attention to specialty knowledge will not help you.

These relationships can tell you

• how to choose the most cost-effective processes
• when to add, replace, or service machines or tools
• when to add failsafe devices to overcome errors
• when to retrain or reassign workers
• when to add automation
• when environmental controls aren't performing well enough
• where to add redundancy
• where to add data acquisition
• when operator senses must be augmented (e.g. by cameras, accurate instrumentation, etc.)
• when a batch of raw material is "bad"
• how to dispose of non-conforming products
• whether specs are clear and/or achievable

To assess a manufacturing process and find the relationships with quality:

1. Identify steps in the process that result in some objective design characteristic.
2. Prepare detailed instructions for those steps.
3. Examine sample data for those steps; determine characteristic mean and variance.
   • Histogram gives a quick view of variance and tolerance.
   • Time plot reveals drift, cyclical changes, and sudden changes (e.g. step, impulse response).
4. Predict the final product's characteristic from this data.
   • Control charts show if you're under statistical control; if not, find out why and fix the problem
5. Choose tolerances to match this result.
   • If tolerance is less than three-sigma, try to either find better capability in this step or to relax the tolerance.
   • Otherwise, you may be able to tighten tolerances if to do so will help you in some other way (e.g. by reducing costs)

Capital Expenditures

Here are the most likely phases in a manufacturing project involving large investments of cash and resources:

1. justification
   • project planning
   • strategic direction
   • costs v. benefits
2. design/development
3. machine purchase/installation/operator training
4. production
   • supplies
   • labor
   • utilities
   • testing/data acquisition
5. maintenance
   • spare parts
   • downtime
   • support staff training
6. phaseout/changeover

References

Gryna, F. "Manufacturing Planning." In Juran, J. Quality Control Handbook. NYC: McGraw-Hill, 1951. ISBN 0-07033-176-6
"Six lifecycle phases in capital expenditure projects." Control Engineering, 02.2001.