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CREDIT
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A multi-faceted approach
to management
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BRIEF
Leveraging networks, methods, and people
to drive results
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In today’s era of limited resources and fierce
competition, companies are under intense pressure to satisfy customers
and increase productivity. Meeting these challenges requires a combined
effort that utilizes several approaches. This short discussion
highlights value chain integration, design and build methodologies, and
stakeholder management.
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Value Networks
As the business environment becomes
increasingly complex, value chains are becoming value
networks—collections of interdependent organizations utilizing
products, processes, and people to achieve a wide variety of
outcomes. Companies must understand interconnections within the
value delivery system, and then leverage key external
relationships to achieve results. In addition, new product and
service opportunities can be identified by understanding
product-in-use applications from customers’ perspectives
(customer experience).
The value network approach was
successfully utilized by a manufacturer of consumer/industrial
goods. The company teamed up with a key distributor to improve
their shared order fulfillment process and to create joint
marketing campaigns. As a result of the collaborative effort
sales to the distributor rose 14% during a period when industry
sales were down by over 9%. At the same time total company
standard margin increased by 3.7 points.
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CREDIT |
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Design and Build Methodologies
Product development activities often focus on
applications and technologies. Therefore many productivity
considerations are not addressed during the development process.
However, the majority of product cost is determined by design.
Initiatives to improve cost, quality, and cycle time must extend beyond
the production floor to include cooperative efforts among engineering,
manufacturing, procurement, and supplier personnel.
A large equipment manufacturer implemented an
integrated program comprised of the following elements:
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Material cost reduction through
design to cost, continuous improvement, and supplier contract
negotiations
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Design for Assembly to reduce
labor content and cycle time
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Lean manufacturing to improve
resource utilization and delivery performance
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Design and manufacturing process
improvements to improve quality
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Contract manufacturing to minimize
the impact of industry business cycles
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Stakeholder Management
Companies wanting to sustain long term
performance must consistently do more for customers, investors,
employees, and the community. Incorporating stakeholder requirements
into overall business objectives helps ensure organizations address a
diverse set of needs.
Employee development is a specific example of
stakeholder management. Managers and employees have a shared
responsibility to ensure organizational goals are achieved while
individuals are developed to realize their full potential. First,
employee performance objectives should include a mix of company,
department, and individual goals. Second, managers assess each
employee’s skills, create development plans that build capabilities, and
provide ongoing opportunities for personal and professional growth.
Third, procedures are implemented to ensure constructive feedback is
provided on a timely basis.
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