Value Chains and Clock Speed

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Presentation transcript:

Value Chains and Clock Speed Bruce Hartman Vish Hegde

PC industry value chain

Competing Olympic Rings: 3-D Concurrent Engineering Recipe, Unit Process PRODUCT PROCESS Performance Specifications Technology, & Process Planning Details, Strategy Product Architecture, Make/Buy components Time, Space, Availability Manufacturing System, Make/Buy processes VALUE CHAIN

3-D Concurrency Model Example Product • Customer Needs • Market Segments • Product Architecture 1. Sourcing: Make/Buy 2. Partner Selection 3. Relationship Design (spot, alliance, equity, etc.) 4. Logistics System Design 5. Inventory management Policies 6. Relationship Management 7. Value Chain Architecture Process Value Chain • Mission Statement • Operating Objectives • Policies & Procedures -Structural: Bricks, Tech, Org -Infrastructural: HR, Business Processes

Fine’s Clockspeed (1998) Approach Double Helix Theory of Industry/Product Evolution MODULAR PRODUCT HORIZONTAL INDUSTRY INTEGRAL PRODUCT VERTICAL INDUSTRY Fine & Whitney, “Is the Make/Buy Decision Process a Core Competence?” PRESSURE TO INTEGRATE DIS-INTEGRATE ORGANIZATIONAL RIGIDITIES HIGH- DIMENSIONAL COMPLEXITY NICHE COMPETITORS PROPRIETARY SYSTEM PROFITABILITY SUPPLIER MARKET POWER TECHNICAL ADVANCES

Global Design Chain – Apparel industry

Global Design Chain – Apparel industry Fit Sessions Product Reviews Video Conference Factory Product Specifications Branded Wholesaler Samples Factory Asian Agent Internet Specs. Received Sample Status Price Estimates Product Specs. Sent Sample Requirements Factory