This document discusses order winning criteria and distinguishes them from order qualifiers. Order qualifiers are the minimum requirements needed to be considered as a supplier, while order winners are the criteria that actually result in winning an order when competitors have met the qualifiers. Some key order winning criteria discussed are price, delivery (speed and reliability), quality, ability to meet demand increases, and product range. The document emphasizes the importance of identifying and prioritizing the most important order winning criteria for a company's products in order to focus manufacturing efforts.
Information is a key driver of supply chain performance. It consists of data regarding facilities, inventory, transportation, costs, prices, and customers throughout the supply chain. Information has a direct impact on all other supply chain drivers and can make the supply chain more responsive and efficient. Key performance metrics for information include data accuracy, system uptime, data accessibility, and timeliness of sharing and reporting data. Information plays an important role in creating strategic fit between the supply chain strategy and competitive strategy by enabling responsiveness to meet customer needs while achieving production and distribution efficiencies.
This document discusses Ford Motor Company's vision to provide sustainable transportation that is affordable. It outlines Ford's short and long term corporate goals. The strategic directions to achieve Ford's vision include integrating with customers, suppliers and internally, changing from sequential to real-time information sharing, reducing supply chain costs, and aligning IT with goals. It also discusses the competitive forces in Ford's industry and compares Ford's current complex supply chain model to Dell's simpler single-tier model. Recommendations are provided on how Ford could apply some of Dell's approaches to improve its supply chain and customer service.
Global supply chain management involves coordinating activities across countries. A global supply chain connects organizations worldwide to source materials and produce goods for customers. Managing such a complex network introduces challenges like long distances, currency fluctuations, and differing business environments. However, companies also benefit from expanded markets, lower costs, and competitive advantages. To operate efficiently, firms must integrate worldwide operations and have the agility to respond to various global factors. For example, a large computer company redesigned its supply chain from 33 plants across many countries to 12 plants within 3 regional zones, reducing costs and improving profits.
This paper provides lessons on how leaders can enable procurement change within their organization. It identifies seven key obstacles that tend to arise within the firm, and provides suggestions and examples on how these can be tackled.
The document discusses Dell's supply chain segmentation strategy. It provides background on Dell and analyzes its market situation and competition. It then explains how Dell segments its supply chain to reduce complexity and better meet customer needs. Specifically, Dell creates distinct supply chains optimized for different customer segments. This allows Dell to connect more closely with customers, reduce costs and complexity, and improve forecasting. The document also presents a case study on how a hospital segmented its supply chain to more efficiently manage inventory.
The 12 Fundamental Best Practices of Supply Chain ManagementIntalere
This article highlights the fundamental best practices of healthcare supply chain management. Intalere assists our customers in managing their entire non-labor spend, providing innovative technologies, products and services, and leveraging the best practices of a provider-led model.
Reverse logistics involves the movement of goods from their point of use back to the manufacturer for reprocessing, repairs, recycling, or disposal. It has become an important competitive tool as organizations use services like replacing defective goods, refurbishing returned products, and product recalls to add value for customers. Effective reverse logistics requires planning systems for product collection, recycling centers, and documentation to support product tracking throughout the reverse supply chain.
The document discusses inventory management and logistics costs in global sourcing processes. It provides insights into global sourcing strategies used by multinational corporations. Some key challenges to global sourcing mentioned include sustainability concerns, developing expertise in local emerging markets, and developing the necessary human resource capabilities to support global sourcing efforts. Factors influencing global sourcing decisions include product characteristics, organizational characteristics, and country characteristics. The total cost of ownership model can help evaluate sourcing and logistics strategies based on these factors.
Information is a key driver of supply chain performance. It consists of data regarding facilities, inventory, transportation, costs, prices, and customers throughout the supply chain. Information has a direct impact on all other supply chain drivers and can make the supply chain more responsive and efficient. Key performance metrics for information include data accuracy, system uptime, data accessibility, and timeliness of sharing and reporting data. Information plays an important role in creating strategic fit between the supply chain strategy and competitive strategy by enabling responsiveness to meet customer needs while achieving production and distribution efficiencies.
This document discusses Ford Motor Company's vision to provide sustainable transportation that is affordable. It outlines Ford's short and long term corporate goals. The strategic directions to achieve Ford's vision include integrating with customers, suppliers and internally, changing from sequential to real-time information sharing, reducing supply chain costs, and aligning IT with goals. It also discusses the competitive forces in Ford's industry and compares Ford's current complex supply chain model to Dell's simpler single-tier model. Recommendations are provided on how Ford could apply some of Dell's approaches to improve its supply chain and customer service.
Global supply chain management involves coordinating activities across countries. A global supply chain connects organizations worldwide to source materials and produce goods for customers. Managing such a complex network introduces challenges like long distances, currency fluctuations, and differing business environments. However, companies also benefit from expanded markets, lower costs, and competitive advantages. To operate efficiently, firms must integrate worldwide operations and have the agility to respond to various global factors. For example, a large computer company redesigned its supply chain from 33 plants across many countries to 12 plants within 3 regional zones, reducing costs and improving profits.
This paper provides lessons on how leaders can enable procurement change within their organization. It identifies seven key obstacles that tend to arise within the firm, and provides suggestions and examples on how these can be tackled.
The document discusses Dell's supply chain segmentation strategy. It provides background on Dell and analyzes its market situation and competition. It then explains how Dell segments its supply chain to reduce complexity and better meet customer needs. Specifically, Dell creates distinct supply chains optimized for different customer segments. This allows Dell to connect more closely with customers, reduce costs and complexity, and improve forecasting. The document also presents a case study on how a hospital segmented its supply chain to more efficiently manage inventory.
The 12 Fundamental Best Practices of Supply Chain ManagementIntalere
This article highlights the fundamental best practices of healthcare supply chain management. Intalere assists our customers in managing their entire non-labor spend, providing innovative technologies, products and services, and leveraging the best practices of a provider-led model.
Reverse logistics involves the movement of goods from their point of use back to the manufacturer for reprocessing, repairs, recycling, or disposal. It has become an important competitive tool as organizations use services like replacing defective goods, refurbishing returned products, and product recalls to add value for customers. Effective reverse logistics requires planning systems for product collection, recycling centers, and documentation to support product tracking throughout the reverse supply chain.
The document discusses inventory management and logistics costs in global sourcing processes. It provides insights into global sourcing strategies used by multinational corporations. Some key challenges to global sourcing mentioned include sustainability concerns, developing expertise in local emerging markets, and developing the necessary human resource capabilities to support global sourcing efforts. Factors influencing global sourcing decisions include product characteristics, organizational characteristics, and country characteristics. The total cost of ownership model can help evaluate sourcing and logistics strategies based on these factors.
The team achieved profit in each period of the business simulation game, with growth in the first 4 rounds and a slight decrease in the last 2 rounds. The overall strategy was to make integrated decisions across all departments to minimize costs and maximize benefits, while evaluating the effects of decisions. Some difficulties included fully predicting decision impacts and aligning strategic goals across departments. The team was able to increase gross margins, negotiate better service levels and supplier contracts, optimize production and inventory, and decrease raw material costs over the 6 rounds.
The document discusses objectives and principles of logistics and supply chain management. The key objectives are to minimize costs while maximizing customer service. Principles discussed include increasing communication along the supply chain to ensure smooth flow, controlling costs through inventory reduction while maintaining service levels, and standardizing parts. Metrics and data collection on factors like quality, delivery, flexibility, and cost are important for benchmarking performance. Customer service standards will differ depending on the type of firm.
Transportation plays a key role in supply chain efficiency and responsiveness. Different modes of transportation like ship, truck, rail, air, and pipeline are used to move products from locations of production to locations of consumption. The choice of transportation mode involves tradeoffs between transportation costs, inventory costs, and customer responsiveness. An effective transportation network is tailored based on factors like customer characteristics, product attributes, and infrastructure constraints.
The document discusses reverse logistics, which is defined as the process of planning, implementing, and controlling the efficient flow of raw materials, inventory, finished goods, and related information from the point of consumption to the point of origin for the purpose of recapturing value or proper disposal. Some key aspects of reverse logistics covered include handling returns, recycling and reuse, and hazardous materials disposition. Several industries that deal significantly with reverse logistics such as publishing, electronics, automotive, and retail are examined. Challenges of reverse logistics and key management elements like avoidance, gatekeeping, compacting disposition cycle time, information systems, zero returns, and remanufacturing are also summarized.
Management Strategy: The Core Competence of the Corporation.
Based on Harvard Business Review with same title article written by C.K. Prahalad and Gary Hamel
Supply Chain of Dell Inc.
Covering the foll. topics:
- Overview
-Value Chain
-Pull/Pull view
-Responsiveness v/s efficiency
-strategic fit
-Drivers of supply chain
-Distribution
Dell pioneered a direct sales model that eliminated retail partners and focused on building PCs to order. This allowed Dell to cut costs, reduce inventory, and increase speed of fulfillment. Dell also segmented customers and focused on more profitable segments like large business customers. Dell was an early adopter of the internet, using the web to further increase efficiency and build relationships with suppliers and customers.
Outsourcing of Supply Chain Management VINAY KENKERE
The document discusses outsourcing and third-party logistics. It describes how outsourcing can replace entire business functions and has become a major strategy. There are six steps to selecting outsourcing partners and making the right decision is important for business success. Third-party logistics providers offer various services and range from basic to highly integrated with customer operations. Fourth-party logistics providers focus on allocating resources and integrating supply chains.
This document discusses reverse supply chains, which refers to the movement of goods from customers back to vendors, completing the supply chain loop. It describes the key processes in a reverse supply chain as product acquisition, reverse logistics, inspection/disposition, remanufacturing/refurbishing, and marketing. Examples are given of industries that utilize reverse supply chains like electronics, automotive, and retail. Managing returns can help reduce costs and increase profits. Reverse logistics is becoming increasingly important as a strategic business process.
Third party logistics providers typically specialize in integrated operation, warehousing and transportation services
&
Fourth party logistics (4 PL) companies serve as consultants who manage the relationship between the principal company and one or more 3PLs to make sure all operations are running smoothly.
Tesco has grown to become the largest supermarket chain in the UK through innovations in supply chain management. The company adopted lean principles from Toyota to reduce waste and implement just-in-time inventory practices. This included point-of-sale scanning, centralized ordering and distribution, and automated warehouse control. While Tesco has achieved supply chain efficiencies through these methods, international expansion presents challenges in adapting practices to diverse global markets and suppliers.
This document discusses optimization opportunities across the supply chain, including demand forecasting, location planning, capacity planning, vendor selection, transportation optimization, warehouse utilization, inventory optimization, production planning, and waste reduction. The key areas of focus are network design and optimization, production planning, and revenue optimization throughout the supply chain from inbound logistics to outbound logistics. Optimization aims to minimize costs while meeting customer requirements and maintaining quality and service levels.
Supply chain challenges and opportunitiesRahul Hedau
The document discusses supply chain challenges and opportunities in the retail industry in India. It provides an overview of the retail industry and major retailers in India. It then discusses supply chain functions and challenges in retail like purchasing, store replenishment, and transportation damages. Opportunities in the growing retail sector are also outlined. The document also discusses Big Bazaar's distribution network and future supply chains, detailing expertise and solutions offered.
The case study optimizes the HP DeskJet printer supply chain by redesigning the network using component commonality and risk pooling. The redesign leads to considerable savings to the business.
This document summarizes key aspects of vehicle routing problems (VRP). It discusses the traveling salesman problem (TSP) as a special case of VRP where a single vehicle must visit multiple locations. It also describes more complex VRP formulations that involve multiple vehicles with capacity constraints serving multiple customers. Heuristics for constructing initial feasible routes and improving routes are described. Finally, an example employee pickup VRP problem in Bangalore, India is presented to illustrate a real-world application of VRP.
This chapter discusses global logistics. It begins by describing the objectives of learning about the similarities and differences between domestic and global logistics. It then discusses reasons for the rise in global business like reductions in trade barriers. It also explains Porter's diamond theory of competitive advantage. The chapter covers critical changes in global logistics, different transportation options, and the effects of trade agreements and changing political environments in various regions on logistics. It emphasizes the increasing complexity and coordination required for effective global logistics.
This document discusses distribution network design in supply chains. It describes several options for distribution network structures, including manufacturer direct shipping, distribution through intermediaries, and retail models. Key factors that influence distribution network design are discussed, such as customer needs around response time, product variety and availability, and costs of inventory, transportation, facilities and information. Tradeoffs between these factors are considered for different network designs. Examples of various companies' distribution choices are provided.
Supply Chain Management in the Motor Vehicle Industry, the Example of Mini.aguesdon
The powerpoint presentation based on my dissertation. It is much less complete than the dissertation itself, as the presentation must only last 3 minutes.
Please feel free to leave any comment or suggestion !
Unit 5 strategic issues in logistics lscm (32 pages)logistics management Suzana Vaidya
This document discusses logistics pipeline management and time-based competition. It defines logistics pipeline management as linking manufacturing and procurement lead times to meet market needs, while increasing response speed. The goals of logistics pipeline management are listed as lower costs, higher quality, more flexibility, and faster response times. Drivers requiring logistics pipeline management include time-based competition, globalization, increasing shareholder value, and customers taking more control. Specific goals of logistics pipeline management are also outlined, such as reducing costs by minimizing inventory levels, delivery times, and the overall order-to-collection cycle.
The document outlines several challenges that companies face in managing their global supply chains. Key challenges include selecting strategic global suppliers, reducing supply chain costs while meeting customer demands, ensuring high product quality and safety, implementing lean initiatives, consolidating suppliers, accessing new technologies, reducing operating costs, managing omni-channel selling, responding to changing customer preferences, expanding into new markets, balancing trade-offs, dealing with increasing complexity, and fully understanding supplier capabilities. Taking proactive steps to address these challenges will help companies better serve customers, operate efficiently, and grow profitably.
The team achieved profit in each period of the business simulation game, with growth in the first 4 rounds and a slight decrease in the last 2 rounds. The overall strategy was to make integrated decisions across all departments to minimize costs and maximize benefits, while evaluating the effects of decisions. Some difficulties included fully predicting decision impacts and aligning strategic goals across departments. The team was able to increase gross margins, negotiate better service levels and supplier contracts, optimize production and inventory, and decrease raw material costs over the 6 rounds.
The document discusses objectives and principles of logistics and supply chain management. The key objectives are to minimize costs while maximizing customer service. Principles discussed include increasing communication along the supply chain to ensure smooth flow, controlling costs through inventory reduction while maintaining service levels, and standardizing parts. Metrics and data collection on factors like quality, delivery, flexibility, and cost are important for benchmarking performance. Customer service standards will differ depending on the type of firm.
Transportation plays a key role in supply chain efficiency and responsiveness. Different modes of transportation like ship, truck, rail, air, and pipeline are used to move products from locations of production to locations of consumption. The choice of transportation mode involves tradeoffs between transportation costs, inventory costs, and customer responsiveness. An effective transportation network is tailored based on factors like customer characteristics, product attributes, and infrastructure constraints.
The document discusses reverse logistics, which is defined as the process of planning, implementing, and controlling the efficient flow of raw materials, inventory, finished goods, and related information from the point of consumption to the point of origin for the purpose of recapturing value or proper disposal. Some key aspects of reverse logistics covered include handling returns, recycling and reuse, and hazardous materials disposition. Several industries that deal significantly with reverse logistics such as publishing, electronics, automotive, and retail are examined. Challenges of reverse logistics and key management elements like avoidance, gatekeeping, compacting disposition cycle time, information systems, zero returns, and remanufacturing are also summarized.
Management Strategy: The Core Competence of the Corporation.
Based on Harvard Business Review with same title article written by C.K. Prahalad and Gary Hamel
Supply Chain of Dell Inc.
Covering the foll. topics:
- Overview
-Value Chain
-Pull/Pull view
-Responsiveness v/s efficiency
-strategic fit
-Drivers of supply chain
-Distribution
Dell pioneered a direct sales model that eliminated retail partners and focused on building PCs to order. This allowed Dell to cut costs, reduce inventory, and increase speed of fulfillment. Dell also segmented customers and focused on more profitable segments like large business customers. Dell was an early adopter of the internet, using the web to further increase efficiency and build relationships with suppliers and customers.
Outsourcing of Supply Chain Management VINAY KENKERE
The document discusses outsourcing and third-party logistics. It describes how outsourcing can replace entire business functions and has become a major strategy. There are six steps to selecting outsourcing partners and making the right decision is important for business success. Third-party logistics providers offer various services and range from basic to highly integrated with customer operations. Fourth-party logistics providers focus on allocating resources and integrating supply chains.
This document discusses reverse supply chains, which refers to the movement of goods from customers back to vendors, completing the supply chain loop. It describes the key processes in a reverse supply chain as product acquisition, reverse logistics, inspection/disposition, remanufacturing/refurbishing, and marketing. Examples are given of industries that utilize reverse supply chains like electronics, automotive, and retail. Managing returns can help reduce costs and increase profits. Reverse logistics is becoming increasingly important as a strategic business process.
Third party logistics providers typically specialize in integrated operation, warehousing and transportation services
&
Fourth party logistics (4 PL) companies serve as consultants who manage the relationship between the principal company and one or more 3PLs to make sure all operations are running smoothly.
Tesco has grown to become the largest supermarket chain in the UK through innovations in supply chain management. The company adopted lean principles from Toyota to reduce waste and implement just-in-time inventory practices. This included point-of-sale scanning, centralized ordering and distribution, and automated warehouse control. While Tesco has achieved supply chain efficiencies through these methods, international expansion presents challenges in adapting practices to diverse global markets and suppliers.
This document discusses optimization opportunities across the supply chain, including demand forecasting, location planning, capacity planning, vendor selection, transportation optimization, warehouse utilization, inventory optimization, production planning, and waste reduction. The key areas of focus are network design and optimization, production planning, and revenue optimization throughout the supply chain from inbound logistics to outbound logistics. Optimization aims to minimize costs while meeting customer requirements and maintaining quality and service levels.
Supply chain challenges and opportunitiesRahul Hedau
The document discusses supply chain challenges and opportunities in the retail industry in India. It provides an overview of the retail industry and major retailers in India. It then discusses supply chain functions and challenges in retail like purchasing, store replenishment, and transportation damages. Opportunities in the growing retail sector are also outlined. The document also discusses Big Bazaar's distribution network and future supply chains, detailing expertise and solutions offered.
The case study optimizes the HP DeskJet printer supply chain by redesigning the network using component commonality and risk pooling. The redesign leads to considerable savings to the business.
This document summarizes key aspects of vehicle routing problems (VRP). It discusses the traveling salesman problem (TSP) as a special case of VRP where a single vehicle must visit multiple locations. It also describes more complex VRP formulations that involve multiple vehicles with capacity constraints serving multiple customers. Heuristics for constructing initial feasible routes and improving routes are described. Finally, an example employee pickup VRP problem in Bangalore, India is presented to illustrate a real-world application of VRP.
This chapter discusses global logistics. It begins by describing the objectives of learning about the similarities and differences between domestic and global logistics. It then discusses reasons for the rise in global business like reductions in trade barriers. It also explains Porter's diamond theory of competitive advantage. The chapter covers critical changes in global logistics, different transportation options, and the effects of trade agreements and changing political environments in various regions on logistics. It emphasizes the increasing complexity and coordination required for effective global logistics.
This document discusses distribution network design in supply chains. It describes several options for distribution network structures, including manufacturer direct shipping, distribution through intermediaries, and retail models. Key factors that influence distribution network design are discussed, such as customer needs around response time, product variety and availability, and costs of inventory, transportation, facilities and information. Tradeoffs between these factors are considered for different network designs. Examples of various companies' distribution choices are provided.
Supply Chain Management in the Motor Vehicle Industry, the Example of Mini.aguesdon
The powerpoint presentation based on my dissertation. It is much less complete than the dissertation itself, as the presentation must only last 3 minutes.
Please feel free to leave any comment or suggestion !
Unit 5 strategic issues in logistics lscm (32 pages)logistics management Suzana Vaidya
This document discusses logistics pipeline management and time-based competition. It defines logistics pipeline management as linking manufacturing and procurement lead times to meet market needs, while increasing response speed. The goals of logistics pipeline management are listed as lower costs, higher quality, more flexibility, and faster response times. Drivers requiring logistics pipeline management include time-based competition, globalization, increasing shareholder value, and customers taking more control. Specific goals of logistics pipeline management are also outlined, such as reducing costs by minimizing inventory levels, delivery times, and the overall order-to-collection cycle.
The document outlines several challenges that companies face in managing their global supply chains. Key challenges include selecting strategic global suppliers, reducing supply chain costs while meeting customer demands, ensuring high product quality and safety, implementing lean initiatives, consolidating suppliers, accessing new technologies, reducing operating costs, managing omni-channel selling, responding to changing customer preferences, expanding into new markets, balancing trade-offs, dealing with increasing complexity, and fully understanding supplier capabilities. Taking proactive steps to address these challenges will help companies better serve customers, operate efficiently, and grow profitably.
Business level strategies—Porter’s framework of competitive strategies, Conditions, risks and benefits of Cost leadership, Differentiation and Focus strategies,
Strategic Analysis and choice—Corporate level analysis (BCG, GE Ninecell, Hofer’s product market evolution and Shell Directional policy Matrix)
Industry level analysis; Porter’s five forces model, Qualitative factors in strategic choice.
Executing a Total Solutions Strategy - And Other Complex Selling and Pricing ...CIT Group
This document discusses how companies are moving from traditional product-focused strategies to "Total Solutions" strategies in order to better meet customer needs and combat commoditization. It outlines the evolution from standalone products to more customized bundled offerings and total solutions. A total solutions strategy involves complex product structures incorporating multiple components from both in-house and third-party suppliers. It also requires sophisticated billing, invoicing, and accounts receivable/payable systems to handle the complex pricing structures and ensure accurate allocation of payments. While challenging to implement, a total solutions approach can provide a sustainable competitive advantage through highly customized offerings that are difficult for competitors to replicate.
The document summarizes the key steps in a successful divestiture process when selling part of a company. It discusses 5 steps:
1. Capability scoping - Identifying the important capabilities associated with the assets being divested.
2. Baseline analysis - Understanding the components of key capabilities and how they enable products/services.
3. Impact testing - Analyzing options for transferring capabilities to a buyer and their potential impacts.
4. Transition planning - Creating detailed plans and work teams to carve out the divested assets and ensure they have needed capabilities.
5. Post-deal management - Establishing service agreements and relationships to facilitate a smooth transition for the buyer.
Strategy Development
Week 3
Objectives Week 3Develop strategic objectives.
Create organizational objectives and goals.
Articulate value proposition, key activities, resources, and channels to market.
Quote……
“Successful business strategy is about actively shaping the game you play, not just playing the game you find.”
Adam M. Brandenburger and Barry J. Nalebuff
Quote……
“The essence of strategy lies in creating tomorrow’s competitive advantage faster than competitors mimic the ones you posses today”
Gary Hamel and C.K. Prahalad
Quote……
“Competitive strategy is about being different. It means deliberately choosing to perform activities differently or to perform different activities than rivals to deliver a unique mix of value”.
—Michael E. Porter
Quote……
“Winners in business play rough and don’t apologize for it. The nicest part of playing hardball is watching your competitors squirm”
—George Stalk, Jr., and Rob Lachenauer”
Long-Term ObjectivesStrategic managers recognize that short-run profit maximization is rarely the best approach to achieving sustained corporate growth and profitability.Strategic decision makers confronts:
Should they eat the seeds to improve the near-term profit picture and make large dividend payments through cost-saving measures such as laying off workers during periods of slack demand, selling off inventories, or cutting back on research and development?
Or should they sow the seeds in the effort to reap long-term rewards by reinvesting profits in growth opportunities, committing resources to employee training, or increasing advertising expenditures?
Long-Term ObjectivesTo achieve long-term prosperity, strategic planners commonly establish long-term objectives in seven areas: Profitability Competitive PositionEmployee RelationsTechnological Leadership Productivity – In-OutEmployee DevelopmentPublic Responsibility
Qualities of Long-Term ObjectivesWhat distinguishes a good objective from a bad one? What qualities of an objective improve its chances of being attained?There are five criteria that should be used in preparing long-term objectives:
Flexible
Measurable
Motivating
Suitable
Understandable
The Balanced ScorecardThe balanced scorecard is a set of measures that are directly linked to the company’s strategy
Developed by Robert S. Kaplan and David P. Norton, it directs a company to link its own long-term strategy with tangible goals and actions.
The scorecard allows managers to evaluate the company from four perspectives:
financial performance
customer knowledge
internal business processes
learning and growth
The Balance Scorecard
The Balance Scorecard
The Balance ScorecardPerspectiveObjectiveKPIGoal for 2014FinanceBecome industry Cost Leader% Reduction in Cost per Unit20%Utilization of AssetsUtilization Rate7%Increase Market ShareMarket Share30%CustomerCustomer Retention% Retention 75%On Time Delivery% of On Time Delivery90%Zero Defects% of Good Quality.
INDUSTRY ANALYSIS One of the major competences that str.docxcarliotwaycave
INDUSTRY ANALYSIS
One of the major competences that strategic managers need is the ability to define their business, conduct an effective industry analysis,
and identify the "key success factors" for firms competing in their industry. This brief note discusses the steps most often found in a
solid analysis of an industry.
A.DEFINE THE INDUSTRY.
The boundaries for an industry analysis are determined by the markets and products that best describe the domain of the industry. Once
you fully understand the business segment that is to be analyzed, you are in a position to identify the capabilities required to participate
successfully in that industry, and the competitors that are likewise able to effectively target the same business segments. These
elements set the parameters for understanding and analyzing the industry. As industries converge and shift, business definitions become
more difficult. In virtually all industries, consumers are becoming more demanding for customized products and services. These
demands encourage the development of innovations, products, and competitors.
B. DESCRIBE THE INDUSTRY STRUCTURE.
For each product-market segment, an industry analysis will describe the "five-forces" of competition. The five forces discussed briefly
below predict the long run profitability of an industry and are an important first step in analyzing the industry once it has been identified.
1. Bargaining Power of Buyers: This primary force comes from the customer segments that make up the markets in which firms
compete. The size and importance of customers influences their power to negotiate prices and terms that reduce the overall
profitability of the industry. The sizes and types of buyers present in an industry determine their potential influence on product
development and influence the level of competition to be found in the industry.
2. Intensity of Rivalry: A second force comes from the competitors and the ways they compete. Each competitor offers a set of
products and services that attempts to provide higher value to the product-market segments they address. Strategies can be
designed to provide combinations of higher performance, more fashion and features, higher quality, or lower price. Increased
rivalry always leads to price or service competition that reduces the profitability of the industry.
3. Bargaining Power of Suppliers: A third influence on the profitability of an industry comes from its suppliers. In some industries,
suppliers might control critical inputs that can affect all firms’ ability to compete. Analogous to Bargaining power of Buyers,
whenever suppliers are large or few, their leverage tends to be high. Limited access to critical factors of production, equipment,
materials, or components can increase prices and accordingly limit profit potential.
4. Threat of New Entrants; a fourth force represents the ease with which a new competitor can compete for exi ...
This document discusses strategic lead-time management. It argues that reducing lead times provides both cost and customer service benefits. Long lead times require more inventory and less responsiveness. The document outlines various pressures that have increased the importance of time-based competition, such as shortening product life cycles and customers' drive for reduced inventories. It discusses concepts like order-to-delivery cycle, cash-to-cash cycle, and the benefits of logistics pipeline management and reducing non-value adding time to compress lead times.
This document provides information on an organization's vendor quality improvement process from 2013-2014. It discusses upgrading existing vendors like HSG Machinings and Catcher & Co. castings. It also covers quality improvement efforts for existing and new castings, as well as bearing and housing machining. The document outlines the vendor selection process and provides examples of evaluation criteria and formats for selecting and developing vendors. It discusses strategies for negotiating contracts and common negotiation mistakes to avoid.
- Ties Only Limited has experienced strong sales growth in its first two quarters, increasing from $420,000 to $680,000. However, its gross profit margin declined from 52% to 50%.
- While the company reported losses over $188,000, many of the costs it incurred like website development and launch marketing are one-time startup costs that will not continue in the future.
- The decline in gross profit margin is a potential concern that needs investigation, but overall the financial performance is not as bad as it initially appears given that the company is still in its early startup phase.
The document discusses several topics related to quality and company economics from different perspectives:
- Quality affects company economics through its impact on both costs and income. Higher quality can reduce costs through fewer defects and increase income by better satisfying customer needs.
- Customer needs may be stated differently than their real or underlying needs. Companies must understand both stated and real customer needs to provide quality that customers truly value.
- The concept of lifecycle costing aims to find the optimal set of conditions that meets supplier and customer needs while minimizing their combined costs over the entire lifecycle of a product.
Master the Field with CPIM-SMR Certification Exam A Comprehensive GuideAliza Oscar
Elevate your career with the CPIM-SMR certification exam. Discover its benefits, exam details, and effective preparation strategies in this comprehensive guide. Position yourself as a supply chain strategy expert
Physical distribution management (PDM) involves ensuring efficient movement of goods from production to consumption. It includes order processing, inventory management, warehousing, and transportation. PDM aims to balance cost and customer service by integrating these functions and optimizing individual efforts. As customer demands have increased, such as just-in-time manufacturing requiring minimal stock levels and rapid deliveries, PDM has grown in importance for coordinating efficient product flows within tight timeframes.
This document discusses core competencies and competitive advantage. It defines a core competency as a unique skill or expertise that provides benefits to customers and is difficult for competitors to imitate. It then provides examples of Apple's core competency in user interfaces and Walmart's in low prices. Competitive advantage is gaining an edge over rivals through lower costs or differentiation. The document outlines Porter's four generic strategies: cost leadership, differentiation, cost focus, and differentiation focus. It explains each strategy and how firms can achieve a competitive advantage.
How to beat the competition with smart market positioning
What is a competitive advantage? What is positioning? Cost leadership/ differentiation. How can you assess the competition?
The document discusses Michael Porter's generic strategies model which identifies three strategies for gaining competitive advantage - cost leadership, differentiation, and focus. It provides details and examples of each strategy. Cost leadership involves producing standardized products on a large scale at low cost. Differentiation focuses on making the product unique through features, quality, design or service. Focus involves targeting a narrow market segment and achieving either cost advantage or differentiation within that segment. The risks of each strategy are also outlined. The document then provides examples of Dell's successful implementation of virtual integration and targeting of customer segments to achieve cost leadership.
Process excellence being efficient & effectiveSumit K Jha
This document discusses process excellence and how it can be applied holistically across an organization's key processes to improve efficiency and effectiveness. It provides examples of how processes in areas like product development, marketing, sales, finance, HR, outsourcing, and innovation can impact business performance if not managed effectively and efficiently. The document also introduces two common frameworks used for process excellence - Lean and Six Sigma. It notes that while these frameworks overlap, they differ in their underlying philosophies and both have been adopted by many global and Indian companies to improve processes.
2. 2
Order Winning Criteria
According to Hill, manufacturing's' strategic task is to provide, better than the manufacturing
functions of competitors, those criteria which enable the products involved to win orders in
the market place.
It is necessary here to define the difference between order winners and order qualifiers. In
most markets it is necessary for a business to achieve certain criteria to even be considered
as a possible supplier. Furthermore, they will need to retain the criteria to remain a
competitor in the market. However, providing or attaining these criteria does not alone
win orders.
Order winners are those criteria which, assuming all competitors have qualified, actually
result in a won order.
With order qualifiers, companies need only to be as good as their competitors, with order
winners they need to be better than those competitors.
For instance, to distinguish between order qualifiers and winners, when Japanese companies
entered the UK colour television market they changed the way in which products won
orders from predominantly price to product quality and reliability in service. The relatively
low product quality and reliability in service of the existing television sets meant that
existing producers were losing orders to the Japanese companies, i.e. existing manufacturers
were not providing the criteria which qualified them to be in the market.
Some time later product quality was raised by those concerned so that they again qualified
to be in the market. As a result the most important order winning criterion reverted to
price.
Manufacturing must therefore provide the qualifying criteria in order to get into or remain
in a given market. These alone will not win orders, they merely prevent a company losing
existing orders to its competitors. Once the qualifying criteria have been achieved
manufacturing must turn its attention to the ways in which orders are won and to provide
these better than any of its competitors.
There exists a range of order winners and qualifiers, not all of them supported by
manufacturing so they would not all form part of that functions strategic role.
The following are manufacturing related and manufacturing specific criteria.
Price
3. 3
In a study of East Midlands manufacturing organisations the single most important order
winning criterion, as considered by their management, was price.
In many markets, particularly in the growth, maturity and saturation phases of the product
life cycle, price becomes an increasingly important order winning criterion.
Where this is the case then the low margins required give manufacturing the task of
reducing costs in order to provide the low costs necessary to support the product in a
price sensitive market place.
Achieving cost reduction is easy to evaluate but difficult to achieve. In most manufacturing
companies direct labour is only a small part of the total cost.
Materials followed by overheads are usually the two main areas of cost. Many companies
do not concentrate their efforts in the area of these, greatest, costs, leading in many
instances to most effort being directed towards reducing direct labour cost and driving
down the headcount
Although there is need to improve productivity at all levels, focusing on the area of greatest
cost will tend to yield the best results. As materials and overheads account for 85 - 90% of
total costs, giving these the attention they deserve makes sense.
Delivery
It is necessary here to clarify the aspect of delivery. Separating the issue of on time as
distinct to that of short lead times is an essential part of understanding the market. In
some markets delivery on time may only qualify the company to be in the market whereas
short lead times may actually win the order. In other markets the reverse may be true.
It is therefore necessary to examine both aspects as attempting to describe both under one
word will hide essential insights.
Delivery Reliability
The aspect of delivery reliability concerns the task of supplying the products on the agreed
due date. On time delivery is a major concern of the manufacturing function as well as the
distribution organisation.
As stated, in many markets, this criterion constitutes a qualifier and, often, an order losing
criterion. If companies persistently miss due dates then customers will increasingly stop
considering them as potential suppliers.
4. 4
For the manufacturing function the aspect of delivery reliability involves considerations of
capacity, scheduling and inventory in the form of work in progress and finished goods.
Recognition of the increasing need to qualify on this term has prompted efforts by the
manufacturing function to reduce the variability involved in the manufacturing process.
While delivery reliability is increasingly an order qualifier for customers operating on very
low inventory systems this may still be an order winning criterion where even a very slight
irregularity in delivery may cause the customer increased costs or increased delivery times
to their customers.
Delivery Speed
In some markets the ability of a company to deliver more quickly than its competitors, or
when it is able to meet the delivery date when only some or even none of the competition
can do so, can prove to be an order winning criterion.
Products which compete in this way need a manufacturing process that is capable of
responding to this requirement. Where process lead time is shorter than the required lead
delivery time, but delivery date is still difficult to achieve because of the current order
backlog then measures such as short term capacity increases, by overtime working or
rescheduling existing jobs, may be necessary.
Where the process lead time is greater than the required delivery time the manufacturing
can only meet the customers requirements by increasing short term capacity or by holding
completed product inventory in anticipation of winning these types of orders, to reduce the
lead time by completing part of the order before the order point.
Where process lead time and existing backlog do not exceed the customers delivery
requirement then delivery speed is no longer an order winning criterion.
Increasingly companies are finding that lead time are reducing. Others are endeavouring to
shorten them in line with their perception of the market or to get a competitive edge.
Techniques such as just-in-time are widely practised to reduce lead times. In addition
companies can hold excess capacity, maintain low/zero order backlogs or hold inventory at
any or all stages in the process.
Quality
It is important here to separate the word "design" from "quality". Both are related but
whereas the former concerns creating a product specification the latter concerns the task of
5. 5
meeting that specification. Whilst one is a task of the design function the other is the task
of the manufacturing function.
Many companies have failed to compete on this dimension. In part this is because the
definition of the word has been broadened to encompass many dimensions resulting in a
lack of understanding and subsequent lack of direction.
In the context of manufacturing the aspect of quality which is most important is that of
conformance. In most markets this aspect has been changed from an order winner in to an
order qualifier and is becoming more so. In part this has been brought about by Japanese
companies who saw the provision of higher quality as a competitive edge over domestic
manufacturers in many markets.
The recent attention attracted by quality based approaches in management has further
highlighted the emphasis on the competitive advantage of improvements in product quality.
Demand Increases
In some markets a company's' ability to respond to increases in demand is an important
factor in winning orders. These orders may reflect the high seasonality of customers
requirements or be of a spasmodic or one off nature.
This factor concerns the level of predictability surrounding demand itself as well as others
such as product shelf life and the frequency of product modifications in line with market
requirements. All will affect manufacturing in terms of its responses.
Product Range
Markets are increasingly characterised by difference not similarity.
However, the balance between levels of customisation and the volume base for repetitive
manufacturing has to be addressed by bringing together the relevant parts of the
organisation to select from alternatives.
Manufacturing's role is to continue to develop processes and procedures that are flexible in
terms of product range difference and also low cost results. Process developments need to
reflect the broadening nature of the product base and the lower volume implications that go
with it.
This is reflected in reduced set-up times to enable companies to cope with the lower
volume nature of these changes yet retain the economies of scale associate with higher
volumes.
This is particularly evident in the Automotive industry.
6. 6
Quantifying Order Winning Criteria
Having identified the order winning criteria pertaining and distinguished them from qualifiers
it is then necessary to distinguish between the importance of each criterion.
Hill's approach to quantifying order winning criterion is as follows.
Firstly identify all the products that are offered by the company. In most cases this is simply
the "made in" parts from the price list. If the firm makes to order rather than to stock then
representative product types must be chosen.
A list of all order winning criteria is drawn up, this list must cover both marketing and
manufacturing perspectives. It is tempting for marketing to list everything as an order
winning criterion, while marketing are the experts at understanding the customers
requirements this temptation should be resisted.
Once order winners are agreed then appropriate weightings can be applied in line with their
relative importance, this takes the form of points out of 100.
It is likely that an initial allocation will exceed 100 points, sufficient iterations will resolve
this.
The products are then grouped together by comparable order winning criteria and volumes,
similar to groupings when developing a group technology manufacturing system.
As markets are dynamic then order winners and their associated weightings will change
over time. In order to monitor this change and complete the analysis fully it is necessary to
repeat this analysis for several future time periods to reflect the different stages in the
product life cycle.
As the product ages in its life cycle initial order winning criteria such as novelty of design
reduce in importance compared with (say) price and volume flexibility becoming more
important. Manufactured quality may initially be important but can soon become a
qualifying criterion rather than an order winning one.
Professor New of the Cranfield Institute uses a similar approach but one in which
comparisons with competitors are more easily seen. This is achieved by multiplying the
weighting factor by a rating which expresses the performance of the company relative to the
competition.
7. 7
Some order qualifiers have the potential to become order winners. In this way a decision
on whether to invest in manufacturing so as to initiate this change can be considered.
In a similar way order qualifiers can become order losing sensitive, marketing must identify
these as it is important for manufacturing to be fully aware of any qualifying criterion which
are directly sensitive in order losing terms.
Performing Excellently on a Range of Order Winning Criteria
Attempting to win on every criterion appears to be the strongest strategy.
The problem with this is that it is usually not possible, and even if it were, it would be
uneconomic. many order winning criteria are in direct conflict with one another and
improving one may deteriorate another.
Being good at everything is not the same as excellence at everything. In practice firms
which demand a wide spread of performance criteria do not get them. rather they achieve
a level of mediocrity instead of excellence.
A major consequence of trying to win on too many aspects is that the available talents
become spread too thinly. After an initial period management and the workers become
overwhelmed by the tasks.
This is rapidly followed by a decline in performance normally taking the form of cost
increases, poorer delivery and deteriorating quality levels.
In only a very few businesses is it necessary to do well on all criteria. It may only be
necessary to try to win on certain criteria.
Identifying where the competition must be beaten, as opposed to drawing with it is
sufficient, is important. Looking at the opposition in these terms can help firm up the ideas
of what is desirable and what is necessary.
Small highly focused firms can offer considerable threats to their larger opponents.
Sometimes the challenge comes the other way around. The threat is from a larger firm
which is using its muscle to overpower smaller competitors through features such as
standard products, ex-stock delivery and low prices.
Facing simultaneous challenges would be unusual, however, considering its possible impact
might help to overcome the idea that trying to do everything is automatically the right
approach