Both production and performance are imperative for the manufacturing firms and hence hold immense significance. Production competence is considered to be extremely domineering and vital by the manufacturing firms for improving their performance. To achieve the goal of desired performance enhancement by the manufacturing firms, the firms need to ensure that the a) business strategies and production strategies should be aligned with each other and b) manufacturing practices should conform and continuously reflect upon increasing the performance of the firms. Now, being able to assess performance is the key to fostering performance-driven decision-making in the firms.
There are many ways to gauge the performance of the firms. First – one of the ways of assessing the performance is by adjudging the competitiveness of the firm. Firms always strive to maintain and improve their position in the market in comparison to their competitors (Barney, 1995; Gupta & Khan, 2017). Second – another way to analyse or critique a firm’s performance is through its financial well-being. Financially sound firms are considered to be performing well. Anyhow, financial gains are the fundamental reason for the existence of the businesses be it in any sector.
Third, the efficiency of the firms also demonstrates their performance. Efficiency relates to the capability of minimizing wastage of practically everything including raw materials, time, energy, efforts, etc. A firm is termed to be efficient when it is capable of utilizing the resources at its disposal at an optimum level. Interestingly, increased efficiency of the firms enhances both competitive advantage and financial performance. Moreover, efficient firms are able to create value for the firm. Hence, the firms always thrive to become efficient by increasing their performance and vice versa.
Achieving productivity performance targets is challenging the manufacturing firms owing to various intrinsic and extraneous factors. Manufacturing units face parity in their production, at the ‘intra’ and ‘inter-industry levels. Additionally, the manufacturing industry, per se, encounters many issues such as economic policy changes, fluctuations in global fuel prices, managing wastages, catering to governance, regulations and geopolitical expectations, one following CSR norms, adhering to sustainability practices, etc. Furthermore, several economic downturns such as recessions impact the efficiency of the manufacturing units. The manufacturing units also to brace for the unforeseen and unscheduled circumstances caused due to uncertainty and disruptions.
Author: Gunjan Sood, Assistant Professor – Unitedworld School of Business (UWSB)
