Taking manufacturing advantage of Europe's single market

This article is a sequel to the Manufacturing 2000 Executive Report 'Manufacturing Strategies in Western Europe'1 which described how manufacturing companies were modifying their manufacturing strategies and practices within the region. The present article focuses on the ways in which some manufacturers have been able to alleviate the impact of downward pressure on costs, to slash excess capacity and to realize the promised synergies of merger and acquisition initiatives through the adoption of Pan-European manufacturing strategies. The fundamental aspects of a Pan-European manufacturing strategy are described together with the benefits to be achieved. This article highlights how companies have surmounted the challenge to implementing such strategies. Eliminating excess capacity, effecting the integration of operations, marketing and sales, rationalizing plant location decisions, adopting 'rigid flexibility' in manufacturing and overcoming barriers to change are discussed and illustrated with examples from practice. Lastly, the lessons to be learned from the European experience are summarized and inferences drawn regarding the crafting of pan-regional manufacturing strategies for manufacturers operating in NAFTA, SAFTA and the Asia Pacific Region. Six criteria are identified: avoid manufacturing myopia; build product focused plant networks; create pan-regional organization structures; adopt 'rigid flexibility'; standardize systems and procedures, and identify obstacles to implementation.