ANS 1.
Hindustan Coca Cola Beverages (HCCB)
HCCB is a FMCG Company in India answerable for creating India's preferred drink juices like CocaCola and Minute Maid. It began in 1997 with the straightforward point of making drinks for the
India of the 21st century. They regulate fabricating the last item, bundling, conveyance and
promoting the refreshment to the client and distributing accomplices who at that point offer the
item to a definitive customer.
The provisions of crude materials are for the most part connected to explicit nutritive and nonnutritive sugars which are accessible either inside the United States or outside. There are various
wellsprings of crude materials and they are regularly subject of costs changes. HCCB has a wide
decision of crude materials providers so it can spread the costs vacillation among them and in this
manner control its gracefully chain. The obtainment providers must satisfy certain guideline to
manage HCCB Company and should resolve to control standards and fuse manageability.
Subsequently, HCCB can accomplish its goal of value and control. The HCCB gracefully fasten
association permits to improve client assistance and to streamline cost and venture.
Contenders:
1.
PepsiCo: PepsiCo is Hindustan Coca-Cola Beverages' #3 rival. PepsiCo was established in
1898 in Purchase, New York. PepsiCo is in the Non-Alcoholic Beverages industry. PepsiCo produces
$68.1B more income than Hindustan Coca-Cola Beverages. PepsiCo is the second greatest player in
the worldwide food and refreshment industry. PepsiCo's activities the executives does as such
through market-based innovative work and item development. PepsiCo conducts statistical
surveying about current patterns, for example, customer ways of life. The consequences of such
research are utilized to decide future headings of PepsiCo's items, for example, future variations of
Pepsi. PepsiCo's tasks the board means to give the greatest items under the organization's "Human
Sustainability" objectives. For instance, new PepsiCo items are generally improved variations, for
example, low-calorie Pepsi items and less-salt Frito-Lay items.
2.
Tetra Pak: Tetra Pak has been one of Hindustan Coca-Cola Beverages' top rivals. Tetra Pak
is a Private organization that was established in Lausanne, Vaud in 1951. Tetra Pak contends in the
Food Processing industry. Tetra Pak has 25,400 additional representatives versus Hindustan CocaCola Beverages.
3.
Unicorn Industries is the greatest opponent of Hindustan Coca-Cola Beverages. Unicorn
Industries was established in 2014, and its base camp is in Berlin, Berlin. Unicorn Industries works
in the Apparel Retail industry. Unicorn Industries has 68 less workers than Hindustan Coca-Cola
Beverages.
Arrangement of market necessities and operational capacities of the organization
Appropriation: HCCB is one of India's biggest FMCG organizations and it along these lines has certain
utilization focuses (retail outlets/cafés and so forth) in regions that have discontinuous or no force
gracefully. Standard visi-coolers, that we all know about, set aside a great deal of effort to chill
items (in view of irregular power) and, when the lights went off, they would not hold the chill,
either.
In such a circumstance, jugs of different refreshments couldn't be chilled. There was a critical
requirement for coolers that could hold cooling without nonstop force gracefully.
The HCCB group worked with providers and the worldwide R&D groups of The Coca-Cola Company,
and built up a chest cooler with eutectic arrangements that had the option to hold the chilling for
as long as 12 hours with a serving temperature of under 10°C. Near 60,000 units of these coolers
have just advanced into the market and are utilized to circulate your preferred items. This caused
HCCB to oblige more shoppers, who required our juices, water, dairy or shimmering items.
The second chilling gear that must be conceptualized distinctively with the goal that they could help
disseminate HCCB items was the localisation of the wellspring container.
HCCB and Coca-Cola India worked together with one of its Mumbai-based providers - Western
Refrigeration - and before long concocted a restricted arrangement. It was nearly at standard
regarding usefulness and better as far as execution in contrast with the globally made hardware.
The Company was additionally ready to spare 35-40% regarding CapEx (Capital Expenditure)
interest in purchasing the hardware. Because of this creativity, the quantity of wellspring hardware
put by HCCB, has multiplied in the range of the most recent three years, when contrasted with the
most recent 10 years.
Digitization:
The key to appropriating a FMCG item and keeping the clients' cheerful is the same as what any
merchant does each day. He follows a thorough calendar of arriving at the market each day to meet
retailers in his general vicinity. As an agent for HCCB, when he is on an ordinary visit to the market,
he gets a direct comprehension of the interest, basic for the organization to design.
With an associated tablet close by, he can offer the best arrangements to his clients (retailers) as
and when he is on the day by day adjusts in the market. On the off chance that there is any client
about who he has to know more, it is only a tick away on his constantly associated tablet. As retailer
(clients') place arranges, the product on the tab is discreetly preparing the request to make the
most ideal dissemination plan to re-fill the retailer's reason with the item that they most need.
His clients are thinking that its an extraordinary method of working as well. At the point when he
has finished taking a stock of the considerable number of items that are required by the retailer,
the last spends and edge for the client is shown on his tablet screen.
The computerized capacity and the utilization of the tab is an ability that different merchants have
gained in the course of the most recent two years at HCCB. Alongside hundreds like him, HCCB
composed a fourteen day preparing to upgrade his commonality with the computerized
environment and for the utilization of tablets to help the pre-deals group to concentrate on their
activity better.
Programmed Storage and Retrieval System: The Automatic Storage and Retrieval System (ASRS)
introduced at distribution center, inside the HCCB industrial facility at Goblej, Gujarat, is a
progressive advance in the organization's worth chain of coordinations the board.
There are a couple ASRS in India however this is interesting. Essentially, this not just oversees mass
bed in bed out activity, yet it likewise oversees Mixed Pallet Making, in accordance with our
technique to make Supply Chain agile.
It is effectively the first of its sort in the drink business in India. ASRS streamlines item stockpiling,
material stream and recovery inside the distribution center, consequently empowering quicker
conveyance of items. With machines overseeing set aside and recovery of completed products,
there is just about zero blunder. On account of ASRS, the whole material dealing with activity in the
organization's high-inlet Goblej distribution center, directly from accepting, putting away, blended
bed making to stacking of definite items is completed flawlessly, according to the request
satisfaction plan with no human intercession. The framework converses with our ERP and Transport
Management framework on an ongoing premise to satisfy client arranges effectively.
The framework is modified to meet the dynamic and developing requests of the advanced business.
Created as a green field venture by HCCB in 2018, the ASRS office in the stockroom has drastically
improved the organization's structure handling throughput and dissemination metrices.
Adaptability: The greatest favorable position of utilizing ASRS innovation is the adaptability that it
accommodates acclimating to the inconstancy sought after according to season. The innovation
empowers the distribution center to increase its ability to take into account as much as a 20% spike
sought after inside one hour with no extra labor prerequisite.
Simply envision, if one somehow happened to orchestrate extra labor and different assets to deal
with the remaining burden of the expanded interest and if the administrators were to physically
sort items, read dispatching marks and push the beds out on transports – this would have been a
bad dream. The computerized arrangement is characteristically adaptable preparing the
distribution center for future extension. The highest point of-the-line innovation is for sure an
incredible empowering agent for the association to expand volume, satisfy orders, dispose of
arranging mistakes, guarantee conveyed bundled quality and win clients' trust and certainty.
ANS 2:
Yes. Operation strategy should always aim for operational excellence. Operational excellence
started from manufacturing environment the sole objective of which is to meet regulatory
requirements. Operational excellence as the name suggest is done or achieved to mitigate risks
from catastrophic failures. Strategy being of method or plan chosen to bring about a desired future
or achieve a desired goal or solution to a problem.
In order for any operational strategy to be successful operational excellence becomes fundamental.
Every organisation, no matter in what sector, heaven operation functions because every
organisation produces some mix of product and services.
This idea has given birth to input transformation output model of operations. Here, all operations
used there resources and processes to transform inputs into outputs that satisfy customer need.
Operational strategy is something that is not an individual process and it has more to do with overall
total transformation process that affects the whole business. It is mainly concerned with the long
term development of the company's operational resources and to provide a basis for a sustainable
advantage. The strategic impact that effective operations and process management can have is
quite important.
Example: From Tesco to IKEA, from Ryanair to Singapore Airlines, it is not just that their operations
strategy provides these companies with adequate support; it is their operations strategy that is the
pivotal reason for their competitive superiority.
The idea of transformation model is applied to all types of operations manufacturing and services.
hotels produce accommodation services financial services invest store or sell us money and
investment opportunities, and manufacturing businesses physically change the shape and the
nature of materials to produce products. Alto this business is are from different sectors de chef a
significantly similar set of issues and problems.
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Other than these operational functions, certain marketing common finance, information
systems and HRM are also included. They all transform input into output to satisfy customer
need.
Reducing the cost of production of products and services in an efficient way.
Try and increase revenue by promoting outstanding customer satisfaction that can be only
achieved by providing exceptional quality, responsiveness, reliability and flexibility.
Operational related risk is something that should be aimed to reduce and resilience should
be paid and promoted. Resilience is something that gives the company and the processes
an ability to recover after operational failure.
overall operational excellence can reduce the amount of investment that is necessary to
produce required type of and quantity of product and services.
It becomes evident time and time again that the most effective way to improve speed is to
build responses that are flexible in nature.
Thus we understand that operational efficiency and excellence is something that operational
strategy always aim for.
A convincing strategic intent, a sound strategy and robust action plan, an almost perfect methodical
deployment of plants all the way from ground level and a method to measure this progress is what
makes buzzing operational excellence a journey that an operation strategy always aimed for.
Sand cone model of operational excellence.
According to the sandcone theory, the first priority should be quality, since this is a
precondition to all lasting improvement. Only when the operation has reached a minimally
acceptable level in quality should it then tackle the next issue, that of internal
dependability. Importantly though, moving on to include dependability in the improvement
process should not stop the operation making further improvements in quality. Indeed,
improvement in dependability will actually require further improvement in quality. Once a
critical level of dependability is reached, enough to provide some stability to the operation,
the next stage is to turn attention to the speed of internal throughput, but again only while
continuing to improve quality and dependability further. Soon it will become evident that
the most effective way to improve speed is through improvements in response flexibility,
that is, changing
things more quickly within the operation: for example, reacting to new customer
requirements quickly, changing production volumes rapidly and introducing new products
faster. Again, including flexibility in the improvement process should not divert attention
from continuing to work further on quality, dependability and speed. Only now, according
to the sandcone theory, should cost be tackled head on.
The ‘sandcone model’ is so called because the sand is analogous to management effort and
resources. To build a stable sandcone a stable foundation of quality improvement must be
created. Upon such a foundation one can build layers of dependability, speed, flexibility
and cost – but only by widening up the lower parts of the sandcone as it is built up (see
Figure 7.8). Building up improvement is thus a cumulative process, not a sequential one.
ANS 3 (A)
Disruptive Innovation: Disruptive Innovation refers to a technology whose application significantly
affects the way a market or industry functions.
Example: The Internet which significantly altered the way companies did business and which
negatively impacted companies that were unwilling to adapt to it. The Internet is an example of
disruptive innovation, in that it turned the business world on its head, forcing companies to either
adapt or lose out.
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E-commerce is another example of disruption. People especially during the on-going
pandemic have adapted themselves to home delivery and online ordering. People who stick to brick
and mortar will be victims of this disruption. There are other innumerable examples of disruptions
like PayTM, Google Pay etc which boosted the online payment in our country.
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Procter & Gamble’s preeminence in the packaged goods industry has its roots in the early
1930s, when the company began to formalize its approach to brand management. In the decades
since, P&G has steadily built upon its early success in creating value out of intangible assets. P&G’s
product portfolio includes 16 brands that have produced $1 billion-plus in sales every year.
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Visa, the world’s first near-virtual company, owes its success to organizational innovation.
When Visa’s founder banks formed a consortium in the United States in the early 1970s, they laid
the groundwork for one of the world’s most ubiquitous brands. Today, Visa is a global financial web
that links more than 21,000 financial institutions and more than 1.3 billion cardholders.
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Linux, the computer operating system, is the best-known example of a recent management
innovation: open source development. Based on other innovations like the general public license
and online collaboration tools, open source development has proved to be a highly effective
mechanism for eliciting and coordinating the efforts of geographically dispersed individuals.
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A classic example of the disruptive innovation of the Internet being unleashed was the
restructuring of the bookselling industry. The big bookselling chains lost out to Amazon because it
could display its inventory without having to own a physical store in every town and then ship the
book to the buyer's home. In contrast, the Model T car is not considered disruptive because it was
an improvement on existing technology and it wasn't widely adopted upon its release. The auto
industry did not take off until mass production brought prices down, moving the entire
transportation system from hooves to wheels. In that sense, the system of mass production does
meet the criteria for disruptive innovation.
Disruptive innovation refers to a new development that dramatically changes the way a structure
or industry functions. The term refers to the use of technology that upsets a structure, as opposed
to disruptive technology, which refers to the technology itself. These technologies and the way they
were incorporated into the business were primarily designed to allow companies to remain
competitive, or at least maintain a status quo. Disruptive technologies and the way they are
integrated—the disruptive innovations—were less easy to plan for and potentially more
devastating to companies that did not pay enough attention to them. Disruptive innovation is
differentiated from disruptive technology in that it focuses on the use of the technology rather than
the technology itself.
a.
Sustainable Innovation: While disruptive innovation means creating a new market but
applying or different set of values which ultimately and unexpectedly over-take an existing market,
sustainable innovation is that which will not affect any existing market.
Sustainable Innovation can be Revolutionary or Evolutionary.
EVOLUTION is defined as gradual change, adaptation, progression, metamorphosis. REVOLUTION is
defined as forcible overthrow for an entirely new system…drastic, disruptive, far-reaching,
momentous change.
Companies must pursue both revolutionary and evolutionary innovation to survive. Evolutionary
innovation focuses on orientation towards today’s customers and revolutionary innovation focuses
on orientation of tomorrow’s customers. Only revolutionary innovation is associated with
uncertainty. Evolutionary Innovation mounts challenging hill after hill at an even pace, day after
day. Evolutionary innovation plans for the world as it could be and begins calculated migration to
new ideas while understanding the world as it is today. Revolutionary innovation (particularly
unmitigated, first or speed to market revolutionary innovation) can deplete energy and resources;
akin to climbing a hill comprised of Confectioner’s sugar. Frenetic pacing over unstable, dramatically
varied terrain – forcing change for a new system or idea prematurely while ignoring the realities of
today’s market — is a lot more challenging. Revolutionary innovation (speed or first to market
concepts) is only optimal under the following conditions: high performance products, long product
lifecycles, a relatively long window of market opportunity, relatively high sales, stable margins, and
relatively flat development costs. Only given these conditions, can companies generate sufficient
revenue to offset the increased costs incurred with speed to market and revolutionary innovation.
Examples:
The Automotive Industry: Fuel efficiency standards and adaptation to hybrid combining combustion
and electric has achieved relative success, allowing for orderly transition of supply manufacturers
to new reality.
The Energy Industry: Development of shale gas / fracking implications for mix of use of refined oil
has been successful.
The Technology Industry: Laptops were an evolution of the mainframe computer — and they caught
on like wildfire. iTunes (and now Spotify) have evolved listening and file swapping for the Digital
Age. The Cloud is not new breakthrough technology; rather it is “a continuous, step-by-step
evolution.”
The Transportation Industry: Building out and modernizing traditional rail transit in known areas of
dense population to include automated light rail has been successful.
ANS 5 (A)
Methodology and culture are among the essential switches available to top pioneers in their
endless mission to keep up authoritative reasonability and viability. System offers a conventional
rationale for the organization's objectives and arranges individuals around them. Culture
communicates objectives through qualities and convictions and aides action through shared
presumptions and gathering standards.
Methodology gives clearness and center to aggregate activity and dynamic. It depends on plans and
sets of decisions to prepare individuals and can regularly be implemented by both solid prizes for
accomplishing objectives and ramifications for neglecting to do as such. In a perfect world, it
additionally joins versatile components that can filter and investigate the outside condition and
sense when changes are required to keep up coherence and development. Administration goes
together with procedure arrangement, and most pioneers comprehend the essentials. Culture, be
that as it may, is a progressively tricky switch, since quite a bit of it is moored in implicit practices,
mentalities, and social examples.
In spite of the fact that the significance of culture in deciding security and operational execution is
perceived, associations make some intense memories moving beyond the language and utilizing
society as a switch to drive improvement. This is regularly because of absence of a typical
comprehension of what culture is, the way it is shaped and the stuff it to transform it.
Association Culture: Shared Assumptions Influence Behavior
The way of life of a gathering is an example of shared essential suppositions that was found out by
a gathering as it tackled its issues, that has functioned admirably enough to be viewed as substantial
and, in this way, to be instructed to new individuals as the right method to see, think, and feel
corresponding to those issues. This meaning of culture centers around "the right method to see,
think, and feel," which thusly impacts individual and cooperative choice creation and conduct in the
work environment. After some time, associations create examples of conduct mirroring the way of
life, and affecting EHS and operational execution in everyday activities.
It is not necessarily the case that culture exclusively decides execution. Or maybe it is a key part of
an association that connects with and impacts different measurements, for example, procedure,
structures, frameworks, procedures, innovation, and assets. How culture impacts execution doesn't
rely upon the way of life alone, yet rather on its relationship to the hierarchical condition it has a
place.
Influence esteems and culture to acquire operational greatness. The beginning stage for any culture
change activity is official authority. At least one key individuals at the top need to conclude that
something about the present methods of working needs to change, at that point build up an
unmistakable vision for the required change. Above all, they have to begin "strolling the discussion"
in a noticeable way and enrolling others to do as such. The key is that the change activity must be
something beyond giving orders and making declarations, pioneers need to set a steady model and
enroll others to do as such.
A great case of top-down authority as the lynchpin of culture change is the methodology taken by
Paul O'Neil at aluminum producer, Alcoa when he became CEO in 1987. O'Neil's first request of
business with all partner gatherings - speculators, the board, and representatives was to make a
pledge to work environment wellbeing; the TOP need for him by and by, and the organization. He
accepted that this center would ingrain a culture of "constant greatness" that would pervade the
association.
His methodology worked. During his 13-year residency as CEO, Alcoa's lost workday occurrence rate
tumbled from 1.86 to 0.2. Concentrating on improving security prompted the improvement of
wasteful assembling procedures and item quality. Net gain expanded five-overlay.
ANS 5 (B)
Operations managers should, to a much greater extent, include flexibility as a key component when
developing their operations and manufacturing strategies. Flexibility allows a business to respond
effectively and efficiently to fluctuations from the norm. In fact the beneficial impact an operations
strategy can have on performance, provided flexibility is included in the strategy.
Two trends in many markets make development flexibility particularly important.
The first is the pace and magnitude of environmental change. Although flexibility may not be
needed in relatively predictable environments, it is clearly valuable in more fast-moving and volatile
environments.
The second factor, however, which amplifies environmental volatility is increasing complexity and
interconnectedness of products and services.
The way flexibility can be achieved in different aspects is al follows:
– Flexibility in coping with incoming materials of varying quality levels
– Flexibility in satisfying the market demand for products of varying quality levels
– Flexibility in competing against new products introduced by competitors
– Flexibility in modifying existing products
– Flexibility in changing delivery and development schedules
– Flexibility in accepting demand volumes of varying levels
– Flexibility in making changes to the product mix
– Flexibility in coping with changes to the resource mix
One of the biggest benefits of development flexibility is that it can reduce development risk. Much
development risk derives from the changes that occur during the development period.
This concept of focus is both powerful and proven because at its heart lies a very simple notion,
that many operations are carrying out too many (often conflicting) tasks. The obvious result is that
they are unable to perform them all with any real degree of success, whereas concentrating on one
or two specific objectives, even at the expense of adopting a vulnerable ‘concave’ trade-off curve
as discussed previously, can lead to substantially superior performance in those few objectives. It
means redeploying operations resources to the needs of only a very specific part of the market.
Most of the early work on what was then called the ‘focused factory’ concept was carried out by
Wickham Skinner of Harvard Business School. Based on his ideas of how trade-offs dominated
operations decision making, he argued that one way of achieving an effective operations strategy
is through the concept of factory focus. This meant that first a business should establish a consistent
set of policies for the various elements of its operations, which will support, not only each other,
but also marketing requirements. Second, because of the inherent trade-offs, one operation cannot
provide peak performance in all performance objectives at the same time.
What we have called ‘focus’ is very similar to the process of segmentation. In fact it can be regarded
as operations segmentation. Operations, like markets, are complex. A whole range of different
skills, process technologies, flow sequences, knowledge applications, individual decisions, and so
on, come together to create a range of different products and/or services.
The equipment, systems and procedures that are necessary to achieve a more limited range of tasks
for a smaller set of customers could also result in lower (especially overhead) costs. Focus,
according to Skinner, can be expressed as dedicating each operation to a limited, concise,
manageable set of products, technologies, volumes and markets, then structuring policies and
support services so they focus on one explicit task, rather than on a variety of inconsistent,
conflicting, implicit tasks.
Performance objective focus. The operation is set up solely to satisfy the performance
requirements of a particular market or market segment. So all products or services produced in an
operation have very similar characteristics in terms of generic performance objectives.
●● Product/service specification focus. The operation is set up for a clearly defined product or
service, or range of products or services, the implication being that each defined range of products
or services is targeted at a clearly defined market segment.
●● Geographic focus. Sometimes operations can be segmented in terms of the geographic market
they serve. This may be because the characteristics of a company’s different market segments are
largely defined by their geographic location. Alternatively, it may mean that the nature of the
service offered by an operation is geographically limited. Most high-contact operations, such as
fast-food restaurants, would fall into this category.
●● Variety focus. A company may wish to segment its operations in terms of the number of
different activities (usually dictated by the number of different products or services) it is engaged
in. So, for example, one site may concentrate on relatively low variety or standardised products and
services while another concentrates on high variety or customised products and services.
●● Volume focus. High-volume operations, with their emphasis on standardisation and repetition,
are likely to need different process technologies, labour skills and planningand control systems from
those with lower volume. Volume focus extends this thinking to the creation of separate operations
for different volume requirements.
●● Process requirements focus. Here, a particular technology is the point of focus for the operation.
This allows the organisation to concentrate on extending its knowledge and expertise about the
process. Over the life cycle of a production/ service system, the likely advantage to be gained from
a process focus will change. As an operation starts up and moves into the growth phase, building
process capability will be critical; however, as volumes stabilise the process itself will become more
stable. A process focus can also become very significant as volumes decline and the organisation
seeks to redirect its operations. However, many firms choose to close an operation rather than
redirect it.
ANS 6 (A)
A recurring theme in operations process development is the idea that continuous improvement is
cyclical in nature – a literally never-ending cycle of repeatedly questioning and adjusting the
detailed workings of processes.
There are many improvement cycles which attempt to provide a prescription for continuous
improvement, some of them proposed by academics, others devised by consultancy firms. And
although most of these cycles are not ‘strategic’, the concept of improvement as a cycle can be
translated to mean an ongoing readjustment of strategic understandings,objectives and
performance. In fact the model of operations strategy and reconciliation between market
requirements and operations resources itself implies ongoing cyclical readjustment.
Market potential responds to the capabilities which the operations function is capable of deploying.
Conversely, the operation adjusts its resources and processes in response to the direction set by
the company’s intended market position. Also, within the operations function, operations
capabilities arecontinually developed or evolved by learning how to use operations resources and
processes more effectively. Similarly, within the marketing function, the company’s intended
market position may be refined and adjusted at least partly by the potential market positioning
made possible because of operations capabilities.
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Direct. A company’s intended market position is a major influence on how the operations
function builds up its resources and processes. Some authorities argue that the most important
feature of any improvement path is that of selecting a direction. In other words, even micro-level,
employee-driven improvement efforts must reflect the intended strategic direction of the firm.
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Develop. Within the operations function those resources and processes are increasingly
understood and developed over time so as to establish the capabilities of the operation. Essentially
this is a process of learning.
●
Deploy. Operations capabilities need to be leveraged into the company’s markets. These
capabilities, in effect, define the range of potential market positions which the company may wish
to adopt. But this will depend on how effectively operations capabilities are articulated and
promoted within the organisation.
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Market strategy. The potential market positions that are made possible by an operation’s
capabilities are not always adopted. An important element in any company’s market strategy is to
decide which of many alternative market positions it wishes to adopt. Strictly, this lies outside the
concerns of operations strategy.
In reality, the improvement process is never so straightforward, sequential or simple. This cyclical
model is not prescriptive. Rather, it merely identifies the types of activity which together contribute
to operations improvement at a strategic level. Moreover, no organisation would execute each link
in the cycle in a rigorous sequential manner. The activities of directing the overall shape of the
operations resources and processes, developing their capabilities through learning, deploying the
operations contribution and deciding on market strategy, all should occur continually and
simultaneously.
ANS 6 (B)
In the automobile industry, Toyota, a Japanese firm, acts as a good example of a company that has
a very strong relationship with its suppliers. It follows the ”Keiretsu” model. Some of the important
features are continuous feedback system, clustering of suppliers around Toyota’s assembly plants
and more focus on face to face meetings.
In the aircraft manufacturing industry, Boeing has held the first mover advantage. To bridge the
gap, AirBus has relied heavily on suppliers all across the world. In fact, over the 30-odd years of
Airbus’ existence up to the A380 project, it had built up a network of 1,500 contractors in more
than 30 countries. Procurement was one of the major branches of the Airbus.
The case that is referred to is the Greenville Operation case.
The Beginning: The Greenville Operation was an operation undertaken by Carlsen group that set up
a new site with much larger capacity to manufacture photoresist imaging film at a higher quality
and with a lower overall cost. This operation proved successful for Carlsen group and resulted in a
100% supply agreement with Phanchem for 10 years.
The Environment: Both Carlsen group and Phanchem have heavily invested in each other and are
mutually reliant on each other’s success. Phanchem needs Carlsen to be successful to be able to
fulfill their orders and Carlsen directly benefits from Phanchem’s success as their sole supplier of
photoresist imaging film.
The Issue: Phanchem and managers at Carlsen have determined that moving Phanchem to an
extension of the Greenville plant would be beneficial to both Phanchem and Carlsen. The main
board of Carlsen has concerns over this move as providing factory space is a long way from Carlsen’s
core business, and operating this close to a customer opens up even more concerns.
Relationship: During the start up of The Greenville Operation, Phanchem began co-operation with
Carlsen and significaly contributed to the overall success of the operation. Phanchem staff
undertook burdens that were caused by Carlsen machines and Carlsen invested in more reliable
machines to ensure supply was continual to Phanchem. Sharing each other’s burdens created a
stronger bond between the two companies that could not be defined in a contractual agreement.
The site was selected partly because of the cooperation from the authorities and partly because of
the intrinsic attractiveness of the area.
Technology: The decision regarding the design of the process technology what faced by the
technical design team.
Finally, the construction of the new extension proceeded smoothly with no significant deviation
from the design or time frame. The customer was involved from the very beginning. Few problems
which the customer had where about shifting their operations rather than any interface problems.
It concludes that, managers can present their proposal to the customers. Specially the industrial
customer who is where is specific about a lot of things. It may require several months of persuasion.
Nevertheless all the concerns will be shared and discussed and capabilities will be achieved.