Impaction On Corporate Strategy

By Author: allan
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Today's factory struggles with large lot sizes, large inventories, and poor machine Replica Rolex Watches utilization. But with CIM lot sizes get much smaller, due to setup time reductions, shorter lead times, substantially reduced inventories, and more productive equipment. This means that the factory can become much more responsive to external pressures.

With CIM in place, marketing can begin to offer the products wanted most and in the necessary time frame. This meets the requirement set by Jelineck and Goldfarb (1984) and others as they discuss the factory of the future operating on a philosophy of "economies of scope" as compared to today's factory built around"economies of scale. In this concept Goldfarb points out that it is of paramount importance that a producer be as flexible as possible to achieve market penetration through responsiveness to customer demand. The old Ford slogan that they will sell you any color Model T car so long as it is black has changed to a global economy where the producer and the consumer have become inextricably ...
... linked. This "presumes" economy, defined by Toffler (1980), has a tremendous impact on the strategic posture of a corporation. As Gold (1983) points out, corporate financial analysis of CIM systems must get to the very heart of corporate strategy. In his articles he emphasizes that the basic decision must be: "What if we do it and the competition does not versus what if we don't do it and the competition does?" Discounted cash flow and rate of return now become secondary to the tremendous market leverage available in a CIM environment.

Up to this point we have assumed that any corporation was a proper environment for CIM. Interestingly, Hayes and Wheelwright (1984) have developed a four-stage ladder diagram for assessing a company's potential for successful CIM installation and use. Their four stages are:
Stagel Minimize manufacturing's negative potential.
Stage2 Achieve parity with competitors.
StageS Provide credible support to business strategy.
Stage4 Pursue a manufacturing-base competitive advantage.

If a company is highly skeptical of Patek Philippe Replica Watches it own capabilities and uses outside experts to make strategic decisions while internal resources are held in a reactive mode, CIM will not be accepted nor will it work. This is stage 1. As a company begins to identify the importance of CIM and moves up the ladder to stage 3 or 4, a more proactive posture is mandatory, with CIM becoming a cornerstone for strategy.

To be sure, CIM affects every aspect of corporate strategy. Reduced inventory, improved quality, and improved throughput affect cash flow; flexibility of production affects marketing strategy; quick turnaround affects service strategies; and on and on. It is important to quantify these in some manner to address the impact that CIM can have on productivity and profit. For example, cash flow is affected by reduced inventory and improved throughput.
Reduced Inventory: In most American companies inventory turns range from 4 to 10 per year. But if we could substantially improve these turns to 20 or 52 or even 260 per year, there would be a tremendous impact on the balance sheet.

Improved Throughput: If a company can reduce the time it takes a product to be produced by an order of magnitude, it often allows major changes in manufacturing control philosophy from a make-to-stock attitude with large amounts of work in process and finished goods, to a make-to-order attitude where the parts for a product can be made and delivered to the assembly area after the order has been received. This quantum leap to flexibility is really feasible only with an integrated approach to marketing, design, and manufacturing.

Improved Quality: To compete and to support tomorrow' s consumer, the producer must know the parameters of a good process and control them effectively to achieve 100% quality.