Competitive Priority Essay

1076 WordsDec 2, 20135 Pages
BK 1/2 The following document is a summary of the Strategic Framework presented in the book titled "Global Operations and Logistics: Text and Cases," by P. Dornier, R. Ernst, M. Fender, P. Kouvelis, John Wiley & Sons, NY, 1998. COMPETITIVE PRIORITIES FOR SUPPLY CHAIN MANAGEMENT Financial indicators are commonly used for measuring the performance of companies. However, financial measures by themselves paint an incomplete picture of a company's operations. We suggest complementing the traditional financial measures with a set of operational measures that allow for a better understanding of the way in which the operations and logistics systems are analyzed. More specifically, we refer to cost, quality, service, and flexibility. Some refinements of the measures are detailed as follows. Cost Initial Cost: The cost of acquiring the product that can be raw materials cost for a manufacturing company, or finished goods costs for a distributor firm (relevant for consumer products) Lifecycle Cost: The cost of acquiring, maintaining and disposing of the product (relevant in industrial markets) Quality Design Quality: The features, styling, and other product attributes that enhance fitness for use (relevant in luxury products) Conformance Quality: Product conformance to set production standards (relevant to all product markets) Service Delivery Speed: Ability to produce and deliver the product quickly, with little turnaround time (relevant in time-based competition) Delivery Reliability: Ability to produce and deliver products within a consistent time frame, according to contractually specified time intervals (relevant to all markets) Flexibility New-Product Flexibility: Ability to introduce new products quickly and effectively (relevant in timebased competition) Customization: Ability to produce a large variety of products that match the needs of a highly segmented market

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