Microsoft PowerPoint gos-chapter4-Competency ppt [Compatibility Mode]
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Fig.4.6
Approaches to achieving time ‐ based competency Time ‐ based organization Time ‐ based competency Time ‐ based NPD Time ‐ based BPR Time ‐ based facilities Vertical integration Logistics time compression IT application White ‐ collar JIT 4.5 TIME COMPETENCY 4.5.2 Time-based global operations strategy (1) Time-based organization Time-based organization is the foundation required to achieve TBC. Firms can build a flat management structure which is able to make decisions rapidly. Organizational restructuring can empower employees to make decisions and share more information with their fellow employees; both actions will contribute to the building of a rapid-response team. (2) Vertical integration A firm can consider three varieties of vertical integration—upstream vertical integration, downstream vertical integration and balanced (encompassing both upstream and downstream) vertical integration—to achieve TBC. While balanced vertical integration can lead to high costs, a firm can use partial vertical integration, backward (upstream) vertical integration to control its subsidiaries that produce inputs or forward (downstream) vertical integration to control its distribution centers and retailers to improve response time. To achieve TBC, Zara uses vertical integration to improve the control and coordination of its design, manufacturing, distribution and sales departments. 44 4.5 TIME COMPETENCY 4.5.2 Time-based global operations strategy (3) Time-based business process reengineering Firms can identify, evaluate and redesign workflows and processes to achieve time competency via BPR. Banking and insurance companies, for example, identify bureaucratic redundancies, eliminate non-value-adding activities and require that customers deal with some paperwork on their own to increase time competency and customer satisfaction. A successful time-based BPR should be able to: • eliminate non-value-adding activities and processes; • shorten value-adding activities and processes; and • improve the coordination of value-added activities and processes. 45 4.5 TIME COMPETENCY 4.5.2 Time-based global operations strategy (4) Time compression in logistics A direct method by which to achieve TBC is to compress time in logistics and in supply chains. DHL, UPS, Federal Express and TNT all seek to reduce the total transportation and logistics time in order to achieve time-based delivery. Apparel and fashion industry companies reduce the cycle time of their supply chains to achieve a competitive advantage. (5) Time-based facilities Stalk (1988) proposed the concept of time-based factories with optimal facility layout and planning to reduce the average throughput time of products. Different from traditional factories organized by process technology centers, time-based factories are organized by products. The manufacturing activities for a product are put in close proximity to one another, to minimize the handling of materials and the manufacturing time of the finished product and its components. Other types of facilities, like cross-docking distribution centers, can also be utilized to achieve TBC. 46 4.5 TIME COMPETENCY 4.5.2 Time-based global operations strategy (6) Information technology application Information technology is critical to efforts focused on gaining TBC. First, firms use communications technologies to acquire new market information and rapidly respond to fluctuations in global demand. Walmart, for instance, uses a satellite- based communications system to collect information from their global network of customers. Second, firms use communications technologies to reduce trading and business time. Levi Strauss, for instance, have used electronic data interchanges (EDI) to speed trading time. Third, IT provides a platform from which to create new business modes, such as e-commerce, which enable reductions in the response time to customers. Finally, firms use IT to share information spontaneously with employees, and to create fast response times within the firm. (7) White-collar JIT Time-based competition can be applied in white-collar activities like new policy applications in insurance companies, consumer loans in commercial banks and patient billing in hospitals. Blackburn (1992) found that the percentage of time devoted to value-adding activities is often less than 5%, while more than 95% of time is devoted to white-collar activities. Blackburn (1992) proposed that JIT systems could work in office settings as well as in manufacturing facilities. 47 4.5 TIME COMPETENCY 4.5.2 Time-based global operations strategy (8) Time-based new product development A firm can achieve TBC by reducing the cycle time of NPD. The traditional method seeks to improve project management by optimizing the scheduling of various NPD activities. A second method forgoes centrally-controlled optimization efforts, with the target firm instead empowering researchers to conduct new projects meant to rapidly respond to market opportunities. A third method utilizes cross-functional integration between R&D functions and marketing, manufacturing and distribution. HP used the concept of “stretch objectives”, referring to its efforts to reduce all of its product failure rates to one-tenth their previous values over a ten- year period, to integrate its functions and reduce NPD time. 48 CASE EXAMPLE: TIME-BASED COMPETENCY OF ZARA Case questions 1. How has Zara achieved its TBC? 2. Why did Zara try to achieve TBC? What are the benefits? 3. What are disadvantages of a time-based GOS for Zara? 49 4.6 VALUE-BASED COMPETENCY 4.6.1 Concept of value-based competency Global operations strategies increasingly deal with not only economic value, but also environmental and social values, through such value-based global practices as “environmentally friendly operations”, “green operations”, “socially responsible operations”, and “sustainable operations”. A sustainable GOS tries to achieve a sustainable balance between three pillars—people, planet and profit. Companies previously thought making any contribution to social value would bring about cost pressure, and therefore argued that a company needs to make a trade-off between its social contributions and the value of its business. Instead of regarding business success and societal development as a zero-sum game, Porter and Kramer (2006, 2011) went beyond this trade-off and proposed the so-called CSV framework, which sought to link competitive advantage and CSR. CSV is not just about philanthropy, social responsibility or environmental protection, but is rather a new means of achieving competencies. Value-based competency is of relevance to globalization since values differ across countries. The same manufacturing and service operations will have different social consequences in different contexts. Production of the same chemical product, for example, may contribute to poverty reduction in China but environmental pollution in the US. Value-based competency will therefore be seen to have different definitions across different regions. 50 4.6 VALUE-BASED COMPETENCY 4.6.2 Approaches to achieve value-based competency 4.6.2.1 Creating a unique VBC • Product and service innovation • Process innovation • Business model innovation • Social organization innovation 51 4.6 VALUE-BASED COMPETENCY 4.6.2 Approaches to achieve value-based competency 4.6.2 .2 Combining VBC and other competencies • Combining value-based competency and quality competency. • Combining value-based competency and cost competency. • Combining value-based competency and flexibility competency. 52 CASE EXAMPLE: GRAMEEN BANK—BANK FOR THE POOR Case questions 1. What is the unique competency of Grameen Bank? 2. How does Grameen Bank’s unique competency influence its operations in terms of resource and process? 53 4.7 OTHER COMPETENCIES 4.7.1 Revenue In “revenue management industries” (e.g., airlines, hotels, car rentals, public storage warehousing, theaters and sporting events), revenue—not cost—is the primary competency a firm will pursue. In 1978, PEOPLExpress was a rapidly rising company with competencies in achieving both low costs and low prices. Its rival, American Airlines (AA), found that its planes were flying only half-filled, which meant that AA was producing some number of seats at a cost approaching zero. In this scenario, the revenue competency was more important than the cost competency since the cost was regarded as zero. American Airlines built a revenue management system to act as a competitive weapon, eventually beating PEOPLExpress. Both AA and PEOPLExpress admitted that successful revenue management was the primary factor which allowed AA to emerge as the winner in their competition. 54 4.7 OTHER COMPETENCIES 4.7.2 Scalability Scalability is an increasingly popular competency associated with capacity investment in dynamic environments, and refers to the ability of a system or process to handle growing marketing demand with low scale-related costs, or to the ability of a system or process to be expanded or enlarged to accommodate that growth, or to an underlying business model which retains the potential for growth. The concept of scalability was originally developed in facilities investment and management. Retailers previously may have adopted the approach by investing millions in order fulfillment, with the attendant risks of reaching over- capacity during periods of reduced demand. New mobile order-fulfilling systems can use robots (which cost only 5,000–10,000 Euros) to first build out a small capacity and then increase the number of robots in response to increased demand. The capacity investment of public storage is easily scalable. A public storage warehouse can build fewer storage units during an initial phase of operation and then increase the number of storage units to meet growing demand with low costs, since its units are modular. David Grant, president and CEO of Shurgard, has said:“There are very few real estate asset classes that are as scalable as self storage and none that benefits as much from economies of scale.”(allbusiness.com) 55 4.7 OTHER COMPETENCIES 4.7.3 Ubiquity To provide global customers with timely and high-quality services covering all regions, telecommunications companies in particular have focused on ubiquity as a competency. To support global service, Huawei tried to achieve ubiquitous interconnectivity in order to push its service to every destination country by building a Wide- Area Network (WAN) which covers the entire world, and then integrating all of its dedicated line resources into its WAN. To support the ubiquity of its global operations, Huawei has also built its own enterprise network, which serves over 90,000 employees and 200,000 terminals at more than 100 branches, 22 regional offices, 17 R&D centers and 36 training facilities in more than 100 countries and regions. In other industries, ubiquity can be just as important a competency. The Coca-Cola Company, for instance, claims that Coca-Cola is the most ubiquitous brand in the world. Each day, people in 200 countries around the world drink some 1.2 billion 8-ounce servings of the cola. 56 CASE EXAMPLE: KIVA SYSTEMS AND AMAZON Case questions 1. What are the competencies of the Kiva system? 2. What are benefits of these competencies? Why has Amazon decided to acquire Kiva? 57 CASE: SAMSUNG VERSUS APPLE BATTLE Case questions 1. Is quality the most important competency of Apple? If yes, how has Apple achieved it? 2. What is Samsung’s most important competency? How does it achieve it? 3. What is the competitive advantage offered by Apple’s supply chain? 4. What is the primary competitive advantage of Samsung’s supply chain? In its supply chain, what is the most important activity in strategic leverage? 5. Are the lawsuits filed by both companies being used as strategic weapons? 6. Optional question: Using the “smile curve” (see Chapter 6), analyze these two supply chains. 58 Yüklə 260,62 Kb. Dostları ilə paylaş:
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