Capabilities of a Firm


A firm can offer lower cost or more differentiated products than its competitors if it has capabilities that are not easy to imitate. A firm’s ability to exploit an innovation, thus, is a function of the extent to which it owns scarce, difficult to imitate capabilities that are central to its value chain.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

Toyota’s Supply Chain


The first-tier firms play a key role in Toyota’s Supply Chain. There are six areas in which these firms act  as the pivotal part of the system.

  1. Quality Buffer
  2. Gaining
  3. System Developer
  4. Purchaser
  5. Designer
  6. Problem Solvers

Within the Toyota supplier network there is only a small reliance on the micro firms. However, the key to Toyota’s success cannot lie within such very small firms at the 3rd and 4th tiers as they are only responsible for 3 percent of the value=adding processes, although due to their high productivity  this yields a 10 percent total productivity advantage  to the total Toyota supplier network.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

Push vs. Pull in Supply Chain


When designing pieces of the supply chain, managers must determine whether these pieces are part of the push or pull in the chain. Push systems generally require information in the form of elaborate material requirement planning systems to take the master production schedule and roll it back, creating schedules for suppliers with part types, quantities, and delivery dates. Pull systems require information on actual demand to be transmitted extremely quickly throughout the entire chain so that production and distribution of parts and products may accurately reflect the real demand.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

Objective of a Supply Chain


The objective of every supply chain is to maximize the overall value generated. The value a supply chain generates is the difference between what the final product is worth to the customer and the effort the supply chain expands in filling the customer’s request, for most commercial supply chains, value will be strongly correlated with supply chain profitability, the difference between the revenue generated from the customer and the overall cost across the supply chain. Supply chain profitability  is the total profit to be shared across all supply chain stages. The higher the supply chain profitability, the more successful the supply chain. Supply chain success should be measured in terms of supply chain profitability and not in terms of the profits at an individual stage.

Having defined the success of a supply chain in terms of supply chain profitability, the next logical step is to look for sources of revenue and cost. For any supply chain, there is only one source of revenue: the customer. All flows of information, product, or funds generate cash within the supply chain. Thus, the appropriate management of these flows is a key to supply chain success. Supply chain management involves the management of  flows between and among stages in a supply chain to maximize total supply chain profitability.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

 

The Consequences of a Bad Boss


The leading cause of stress is the bad boss. In most organizations everyone in the company expect the chief executive officer has a boss, or has the potential to become a boss, even if that means you are instructing an apprentice or a student who is at the company for a short time on a work orientation program.

In terms of making our own choices in response to stress, even the very lowest person on the work ladder is still a boss—a boss of his or her own department. Thus, what a lot of people complain of having a bad boss, the corollary is that most of us are bad bosses—if not of others, then at least of ourselves.

The damage that a bad boss does is sometimes far more widespread than is seen at the time. With the ultimate control, as well as, knowledge of the bigger picture, the boss escapes the highest levels of stress at work, but can still be a powerful stress carrier. In just the same way that a child who is humiliated by a bully comes home and yells at a younger sibling, a boss can transfer anxieties and stresses to employees without ever letting them know the reasons behind the negative behavior.

When an employee is frustrated all day by the boss, these frustrations tend to get transferred along to innocent bystanders, rather like one of those dreadful chain letters. One may see drastic repercussions, ranging from demoralization and loss of self-worth, to burnout of virtually any organ system in the body. In the brain this burnout takes the form of fatigue, insomnia, anxiety, depression, or obsessive behavior. Aggression can be triggered, causing such tragedies as life and child beating or even mass murders during a sudden wild shooting spree. Bad bosses are even the motivation for some suicides. In the stomach or heart, the results of a bad boss are often seen in ulcers or heart attacks.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

 

Vertical Integration Strategies


Vertical integration extends a firm’s competitive scope within the same industry. It involves expanding the firm’s range of activities backward into sources of supply and/or forward toward end users of the final product. Thus, if a manufacturer invests in facilities to produce certain component parts rather n than purchase them from outside suppliers, it remains in essentially the same industry as before. The only change is that it has business units in two production stages in the industry’s value chain system. Similarly, if a paint manufacturer elects to integrate forward by opening 100 retail stores to market its products directly to consumers, it remains in the paint business even though its competitive scope extends further forward in the industry chain.

Vertical integration strategies can aim at full integration (participating in all stages of the industry value chain) or partial integration (building positions in just some stages of the industry’s total value chain). A firm can accomplish vertical integration by starting its own operations in other stages in the industry’s activity chain or by starting a company already performing the activities it wants to bring in-house.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

 

Cost Leadership


Business success built on cost leadership requires the business to be able to provide its product or service at a cost below what its competitors can achieve. And it must be a sustainable cost advantage. Through the skills and resources a business must be able to accomplish one or more activities in its value chain activities—procuring materials, processing them into products, marketing the products, and distributing the products or support activities—in a more cost-effective manner than that of its competitors or it must be able to reconfigure its value chain so as to achieve a cost advantage.

Strategists examining their business’ value chain for low-cost leadership advantages evaluate the sustainability of those advantages by benchmarking their business against key competitors and by considering the impact of any cost advantage on the forces in their business’ competitive environment. Low-cost activities that are sustainable and that provide one or more of these advantages relative to key industry forces should become the basis for the business’ competitive strategy.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

 

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