1. Copyright ©2003 by south-Western, a division of Thomson Learning. All rights reserved. Slide 14-1 Redefining Advantage by Robert Pitts & David Lei Slides prepared by John P. Orr Cameron University Chapter 14

2. Copyright ©2003 by south-Western, a division of Thomson Learning. All rights reserved. Slide 14-2 What you will learn… Why organizations will constantly reshape themselves to compete in the future The key role of total quality management (TQM) and continuous quality improvement (CQI) in redefining advantage Slide 1 of 2

3. Copyright ©2003 by south-Western, a division of Thomson Learning. All rights reserved. Slide 14-3 What you will learn… What is the business process of reengineering Manufacturing and information- driven technologies that are changing the competitive landscape What it will be like to work in tomorrow’s organizations Slide 2 of 2

4. Copyright ©2003 by south-Western, a division of Thomson Learning. All rights reserved. Slide 14-4 Nokia Seeks Advantage Shift to related diversification Wireless telephones –Nokia 7650 series –9210 Communicator Manufacturing plant in China Software projects 3-G networks Nokia Ventures

5. Copyright ©2003 by south-Western, a division of Thomson Learning. All rights reserved. Slide 14-5 Total Quality Management The cultivation and practice of quality in every person’s tasks and activities throughout the organization.

6. Copyright ©2003 by south-Western, a division of Thomson Learning. All rights reserved. Slide 14-6 Principles of Quality Conformity Functionality Reliability Durability Serviceability Aesthetics Customer responsiveness

7. Copyright ©2003 by south-Western, a division of Thomson Learning. All rights reserved. Slide 14-7 Total Quality Management Continuous Quality Improvement The deliberate and methodical search for better ways of improving products and processes Benchmarking A firm’s process of searching, identifying, and using ideas, techniques, and improvements of other companies in their activities

8. Copyright ©2003 by south-Western, a division of Thomson Learning. All rights reserved. Slide 14-8 Reengineering: Business Process Redesign Reengineering The complete rethinking, reinventing, and redesign of how a business or set of activities operates Competing on Time Speeding up the time needed to innovate new products and get them to market faster than competitors

9. Copyright ©2003 by south-Western, a division of Thomson Learning. All rights reserved. Slide 14-9 Reengineering: Business Process Redesign Factors behind reengineering Steps of reengineering Benefits of reengineering Costs of reengineering Reengineering in the future

10. Copyright ©2003 by south-Western, a division of Thomson Learning. All rights reserved. Slide 14-10 Computer-Integrated Manufacturing Technology Manufacturing’s Transformation through CIM and FMS: Rapid response Flexibility Accelerated throughput Lower fixed costs

11. Copyright ©2003 by south-Western, a division of Thomson Learning. All rights reserved. Slide 14-11 Computer-Integrated Manufacturing Technology Impact on Strategy –Competitive advantage based on variety, customization, and speed –Closer linkage of design and manufacturing –Accelerated convergence Impact on Employees –Greater variety of activities –Emphasis on knowledge workers

12. Copyright ©2003 by south-Western, a division of Thomson Learning. All rights reserved. Slide 14-12 Revisiting the Internet and Competitive Advantage Compressing the value chain Building virtual supply chain Competitive dynamics and the Internet

13. Copyright ©2003 by south-Western, a division of Thomson Learning. All rights reserved. Slide 14-13 The Organization of Tomorrow Horizontal Organization An organization design in which teams and small units replace the strict separation of functional activities Cross-Functional Teams Small units that work across a wide range of functions, technologies, products, and services based in different parts of the organization

14. Copyright ©2003 by south-Western, a division of Thomson Learning. All rights reserved. Slide 14-14 Ex. 14-2: From a Vertical Organization to Cross-Functional Teams Slide 1 of 2 Corporate Business Unit 1 Business Unit 1 Business Unit 2 Business Unit 2 Business Unit 3 Business Unit 3 R&D Manufacturing Marketing Then Finance

15. Copyright ©2003 by south-Western, a division of Thomson Learning. All rights reserved. Slide 14-15 Ex. 14-2: From a Vertical Organization to Cross-Functional Teams Slide 2 of 2 Corporate Business Unit 2 Business Unit 2 Business Unit 1 Business Unit 1 Business Unit 3 Business Unit 3 Implementing New Manufacturing Technologies Logistics and Inventory Customer Service New Product Development Faster Change Reduce Cost Satisfy Customers Reduce Cycle Time Task 1 Task 4 Task 3 Task 2 Now and the Future?

16. Copyright ©2003 by south-Western, a division of Thomson Learning. All rights reserved. Slide 14-16 The Organization of Tomorrow External Partnering The process of including suppliers and customers in the firm’s set of value-adding activities, often through virtual organizational formats Empowerment Delegation of decision-making authority and responsibility to those people most directly involved with a given project or task

17. Copyright ©2003 by south-Western, a division of Thomson Learning. All rights reserved. Slide 14-17 Ex. 14-3. Transition to a Horizontal Organization Slide 1 of 2 = Strategic Business Unit Then

18. Copyright ©2003 by south-Western, a division of Thomson Learning. All rights reserved. Slide 14-18 Ex. 14-3. Transition to a Horizontal Organization Slide 2 of 2 = = Now and the Future Small business unit or flexible team Partner, supplier or customer