Application of the analytic hierarchy process in manufacturing strategy formulation

This paper analyses the formulation of a manufacturing strategy in five small and medium sized manufacturing companies. The developed methodology uses concepts of the Analytic Hierarchy Process (AHP). A manufacturing strategy is formulated by creating a 5 level hierarchy: focus, company objectives, strategic business units, critical success factors and manufacturing decision areas. It allows a strategic diagnosis of the current manufacturing system and the generation and evaluation of action plans to improve the company competitiveness. The paper concentrates on the way the process was carried out and improved as experience was gained. The results show that the proposed methodology is appropriate for formulating a manufacturing strategy.