T.1-2 DESCRIPTION OF GENERAL DETAILS
OF THE FIRM AND ORGANIZATION CHART
T. 3 STRATEGY FOLLOWED TO GET A
COMETITIVE ADVANTAGE
T. 4-7 QUALITY FUNCTION DEPLOYMENT
(QFD) AND PROCESS DESIGN
T. 5 DESIGN AND PRODUCTION
T. 6 OPERATIONS TECHNOLOGY

DESCRIPTION OF GENERAL
DETAILS OF THE FIRM AND
ORGANIZATION CHART

• Headquarter: Stuttgart, Germany
• Production:
Argentina, Austria, Bosnia and
Herzegovina, Brazil, Canada, Egypt, Ghana,
Hungary, India, Indonesia, Iran, Malaysia,
Mexico, Nigeria, South Africa, South Korea,
Thailand, Turke, United Kingdom USA
• Products : Passenger cars, Trucks, Buses and vans, Utility vehicles

• 1886 the first car was developed
• Foundation: 1887
• Founders: Gottlieb Daimler
Karl Benz
• 1894 first serial production
• Cooperation of: Mercedes (Daimler) and
Benz because of bearing the crisis, until the 1926’s unification.
• 1928 the first formula 1 car(“Silber Pfeil”) was built

• Cars for middle and upper class. They try to offer high quality cars at good relation price-quality. Prices vary depending on the model you are to buy.
• Their cars are always on the edge from a technological point of view since they have been produced with the best technological tools.




Their strongest competitors come from the luxurious car’s market.
Mercedes is supposed to be the strongest one in its field.
Main Competitors:
- BMW
- Audi
- VW
other car manufacture companies (Jaguar,
Opel (GM) Porsche...

STRATEGY FOLLOWED TO
GET A COMETITIVE
ADVANTAGE

THE STRATEGY
FOLLOWED BY MERCEDES
BENZ TO BECAME
LEADERS IN THE CAR
MARKET ARE:
THE PORTER’S GENERIC
STRATEGIES:



DIFFERENTIATION
VERSATILITY
BROAD SCOPE
 THE DIFFERENTITATION
STRATEGY (horizontal axis)
 THE COST LEADERSHIP
STRATEGY (horizontal axis)
 STRATEGIC FOCUS AND
SCOPE (vertical axis)

Vertical axis:
F
O
C
U
S
Horizontal axis:
DIFFERENTIATION // COST LEADERSHIP

 INVOLVES MAKING OUR PRODUCT
DIFFERENT AND MORE ATTRACTIVE THAN
THOSE OF OUR COMPETITORS.
FEATURES FUNCTIONALITY DURABILITY
SUPPORT
BRAND IMAGE
THAT OUR
CUSTOMERS
VALUE

 TO MAKE A SUCCESS OF A
GENERIC DIFFERENTIATION
STRATEGY, WE NEED:
1.
Good research, development and innovation.
2.
The ability to deliver high-quality products or services.
3.
Effective sales and marketing

REASONS :
1. Reduce costs
(labor, taxes, tariffs, etc.)
2. Improve supply chain
3. Provide better goods and services
4. Understand markets
5. Learn to improve operation
6. Attract and retain global talent
DRAWBACK :
 HANDICAP
BEING UNIQUE

 REDUCING ITS ECONOMIC
COSTS BELOW ITS
COMPETITORS
 THE ABILITY OF A VALUABLE
COST-LEADERSHIP
COMPETITIVE STRATEGY TO
GENERATE A SUSTAINTED
COMPETITIVE ADVANTAGE
DEPENDS ON THAT STRATEGY
BEING RARE AND COSTLY TO
IMITATE.
I
L
S
T
T
V
E
R
Y

 THIS DIMENSION IS NOT A SEPARATE
STRATEGY PER SE, BUT DESCRIBES THE
SCOPE OVER WHICH THE COMPANY SHOULD
COMPETE BASED ON COST LEADERSHIP OR
DIFFERENTIATION.
 THE FIRM CAN CHOOSE TO COMPETE IN:


THE MASS MARKET WITH A BROAD SCOPE,
A DEFINED, FOCUSED MARKET SEGMENT WITH A
NARROW SCOPE.
 MERCEDES BROAD SCOPE

QUALITY FUNCTION
DEPLOYMENT (QFD)


This is the “voice of the customer”
 Done With focus groups
 Must be what customers want and not what builder wants

 This is the HOW room, How can each customer attribute be measured and evaluated by the company.


These are the What's’ in rows and How's in columns
 This s the relationship room
 Described in 3 ways:
 Strong moderate and weak

 This room assesses how well we are meeting customers requirements

 Technical priorities
 Relationship and importance to customer

About quality cost analysis
( http://www.kaner.com/qualcost.
htm )

 Definition quality cost
 Different types of Quality cost analysis
○ Prevention costs
○ Appraisal costs
○ Internal failure costs
○ External failure costs
 Benefits by analysis cost of quality
 Risks by analysis cost of quality

• Quality Cost:
- It is represented by the costs encountered in:
- preventing
- finding
- correcting the defective work
- They represent in general a significant amount
- It is affected (reduced) by Total Quality Control.

The costs encountered in the activities preventing poor quality.
Examples:








Staff training
Early Prototyping/Requirements analysis
Clear Specification/unambiguous documentation
Evaluation of the development tools that will be used
Coding errors
Design errors
Mistakes in the user manuals
Dadly documented or unmaintainably complex code

• The Costs encountered in the activities aimed at revealing quality problems.
• Examples:

Design review

Testing the raw materials

Quality control

Training testers

Test automation

Usability testing

Pre-release out-of-box testing by customer service staff

Failure costs are Costs that result from poor quality:
•Bug fixes
•Regression testing
•Wasted in-house user time
•Wasted tester time
•Wasted writer time
•Wasted marketer time
•Wasted advertisements
•Direct cost of late shipment
•Opportunity cost of late shipment

 Customer service costs
 Cost of patching a released product distributing the patch
 Examples are:
 Lost sales


Lost customer goodwill
Discounts to resellers to encourage them to keep selling the product



Warranty costs
Preparation of support answer books
Investigation of customer complaints



Refunds and recalls
Coding / testing of interim bug fix releases
Shipping of updated product

• Implementation Risks
– Not being realistic and trying to achieve too much too soon.
– Controversial costs should be left aside, especially the first few times the company is trying to implement the quality-costs analysis
• Other risks:
– Looking only from the point of view of the company, not looking at the customer’s costs
– Might result in other types of risk:
• Customer Dissatisfaction
• Litigation

• The goal is to reach minimum quality costs at the desired outgoing quality level.
• It’s a feed-back mechanism: quality costs data is used by the management to make decisions that will impact the quality costs.
• Applications of Quality Costs
– Measurement Tool:
• Quality costs provide comparative measurements for evaluating quality programs
– Process-Quality Analysis Tool
• Quality costs can serve effectively as an analysis tool and point out where the problems are
– Programming Tool
• Quality costs determine how the available resources to be divided
– Predictive Tool
• Quality costs can also be used to evaluate and assure performance in relation to the goals and objectives of the organization.

Operations technology in
Mercedes Benz

 Products Technologically innovators
 Technology used to manufacture these products

 Two kinds of software
 Mechanical and engineering orientated software
 Design in itself software

 The cad design has to be integrated in the machine.
Numerical controled Robots

 Web page informing aabout their services, new releases and news.
www.mercedes-benz.com
 In 1995 they firmed aa contract with IBM to support all the corporative software.
(accounting, net, design)

DESCRIBE A PROCESS IN
OUR FIRM USING ANY OF
THE TOOLS FOR PROCESS
DESIGN.