Project_Fro_Garments

MANF 9471 MANUFACTURING STRATEGY Assignment#1 1. What are the main criticisms leveled against Porter’s Five Forces model' There are some major criticisms of Porter’s Five Force Model. Firstly, the five forces model assumes relatively static market structures so it can’t capture what occurs during periods of rapid change in the environment of an industry and the dynamics of markets. (Today's markets are highly influenced by technological progress which entrants from start-ups so the business models completely change within short times.) Therefore, it is not advisable to develop a strategy solely on the basis of Porters models. It’s also not able to take into account new business models and the dynamics of markets. Next, the five force model provides a good framework for analyzing but they do not really consider issues around implementing changes to reposition for strategic advantage. In addition, there is no indication by Porter of how to assess the relative power of the forces or to determine what counteractions can be taken. The model was also criticized that it lacks of justification. The choice of the five forces appears to be arbitrary and it is not an exclusive or exhaustive list. 2. Explain the differences between the strategies of diversification and differentiation' The strategy of diversification is a form of corporate strategy to increase profitability or expand firms' operations through the greater sales volume obtained from new products and new markets. This expansion may be related or not related to the existing business. On the other hand, the differentiation is a strategy to develop products or services (value added) that offers unique (make the different into the products). Then the differentiation can raise their products price. In summary, the strategy of diversity distributes the new product that not attends to add value or feature to the existing products as the differentiation strategy. 3. What is core competency and why is it important' Core competency is knowledge, ability, or expertise in a specific subject area (it also includes the knowledge of management and generating technology and so on) which are accumulated from experience and learning in organization. The core competency is important because it is used to provide and support vision, mission and strategy of organization. It’s also used for recruitment and selection employees. In this situation, the company will be able to hire the workers who have abilities which are suitable for the jobs. (The proper employees can bring the highest profit to organization.) In addition, members in organization should be trained and developed their knowledge so the core competency is used as an equipment to build and improve their abilities. Moreover, it is applied to be a key for adjustment the position or promotion the employees. These skills distinguish a company from its competition and it’s difficult for competitor to imitate. 4. Give an example of an order winning criteria and an order qualifying criteria. Time, Cost and Quality are three aspects which could be concerned. Order qualifying criteria is a characteristic of a product or service that is required in order for the product/service to even be considered by a customer. On the other hand, Order winning criteria is a characteristic that will win the bid or customer's purchase. The examples of both criteria are; In high-volume car manufacturing, dependable delivery from suppliers to assemblers is the accepter standard and any supplier who cannot meet this standard has no chance of competing. Recently, Toyota supplier’s response time was reduced from 15 days to 1 day (this situation is order quantifying). In the case of order winning, short delivery time may be achieved in many possible ways depending on the type of product (By more effective scheduling, by filling orders from finished product stock). Next, a firm produces a high quality product (where high quality is the order-winning criteria).When the cost of producing at such a high level of quality forces the cost of the product to exceed a certain price level (which is an order-qualifying criteria). 5. “You are an experienced Manufacturing Executive who has recently been recruited by a major manufacturing organization of high technology consumer and specialty products. One of your first tasks is to develop a Manufacturing Strategy for the firm.” • Organization Goals • Corporate Strategy and the Strategy Business unit • Value chain & Value chain linkages • Porter’s Five Force Model • Porter’s Diamond Model • Generic Competitive Strategies • Competitive advantage • Order Winning and Order Qualifying Criteria • Strategic View of Technology • Products and Product Strategy • Process choice • Generic Types of process • Product Life Cycle • Process Positioning • Core Competencies • Core Products • Long Term Capacity Strategies Firstly, the team is appointed to manage the strategy development. All the team members need to have a detailed understanding of the aims of the organization that include goals, objectives, products, target markets and also existing manufacturing technologies. The existing market position is next topic which is considered. The meeting started with the definition of which criteria were relevant to the company. It was decided that five criteria (cost, quality, speed, dependability and flexibility) were relevant. During the meeting, the criteria are discussed one by one until the participants reached an agreement. Not only is the current situation considered, but also the tendencies for the future. Then generic competitive strategy is determined. The three generic strategies are competing on overall cost leadership, product differentiation and focused market segmentation. In cost focus, a firm seeks a cost advantage in its target segment. If our company can succeed in cost focus, the company will gain the high level of expertise in manufacturing process engineering and skill in designing products for efficient manufacturing. In this section, the criteria which gain the greatest competitive advantage are determined. Consequently, the value chain is an important systematic approach to examine the development of competitive advantage. It is used for analyzing the activities in a manufacturing organization. Manufacturing is concerned with the process of adding value to raw material therefore the products be sold at a high price then the manufacturing will gain the revenue from goods sold. Moreover, a competitive advantage may be achieved by reconfiguring the value chain to provide lower cost or better differentiation. The five forces model is next tool to be discussed. It is a powerful tool for understanding where power lies in a business situation. Diamond model is another key which help us to understand the competitive position of a nation in a global competition. Following this, we should completely know about our products families and use product life cycles as a framework for thinking about the manufacturing requirements of different products. Plotting product life cycles for existing key products and future projects can build a picture of the size and shape of the business in the future. Identifying factors of change is next step. Considering business criteria such as product performance, evolution of manufacturing philosophies, market demands, and management structure is identified. In this step, our team should understand the fundamentals of the technology and ensure that they’re matched with the market opportunity. It is important to know about production type, the market requirement, competitive positioning and product volumes of our organization. Therefore we can improve and select the suitable technologies for applying our production. Following this, the new product and process technologies are adopted as a result of time-based competitiveness (product development cycles and production lead times have been reduced). Then technology will fit better with other key decisions, and managers at all levels are more likely to understand the strengths and limitations of technological alternatives. The company can also gain a competitive advantage through development of technologies. Then, we look at our current performance. Techniques such as Pareto analysis is used for selection a limited number of tasks that produce significant overall effect. Focus upon product performance features, such as quality, delivery, flexibility, material costs and capital costs. Following this, critical components are identified. The identification of the components is critical to the long-term success of the organization and helps us to maximize the use of the limited investment capital available. The manufacturing characteristics of the components are described with a high added value in product families. Next, the key requirement for manufacture the strategy components is listed. Measuring manufacturing operation is the next process. The key areas often include facilities, span of process (the degree of vertical integration), capacity, processes and the way to organize, human resources, quality, control policies, suppliers and new products. Process positioning is also discussed, and this must take due account of strategy requirements. At this position, core competencies of our organization are identified. The core competencies serve as the glue that bonds the business units together so we have to combine a set of core competencies in a different ways and matching them to market opportunities, a corporation can launch a vast array of businesses. The same as core products, they should be identified. The core products are used to launch a variety of end of products. The company can sell these core products to other firms that use them as the basis for end users products. If our firm has success core products, it can expand the number of uses in order to gain the cost advantage via economies of scale and economies of scope. Next, we should discuss in the long term capacity strategies which based on a number of forecasts about future market conditions, competitive behavior and technology changes. As with all business plans, review our manufacturing plan annually against the developing business situation and set revised targets. Then, the team should have a through understand of our existing manufacturing strategy and ensure that we know the strengths and weakness of our existing product line. The last but not least, we have to review and revise it to meet changing market conditions.