Customer Requirements And Product Characteristics

One of the main assignments of any manufacturing facility is to produce product that suits the demands of the market, and the best way to understand the marketplace needs is to tell apart what is important to the customer/consumer. This understanding of the customer gives the company a competitive advantage, as he has learned pretty much the actual needs of the client is, when he sells his product in the market. This competitive advantage can be distinguished into various factors, for e. g. Quality, Velocity, Dependability, Cost, and so forth. A particular way of distinguishing which factor gives us more competitive border is to distinguish between what Prof Terry Hill message or calls as order winners and order qualifiers. (Pycraft et al 1997) [Online]

However before we dive into categorising the many competitive factors into order winners and order qualifiers, it will be helpful if we knew where the products lay in the Puttick Grid. The Puttick Grid, devised by the Warwick Manufacturing Group, identifies product market position with regards to the complexity of the product and the amount of uncertainty on the market. A point to notice about the Puttick Grid is that over a period, product tends to maneuver around in the grid and hence may change over time of time.

The Specialist DBPs have a very erratic demand account, they are basically manufactured either one by one, or if they is more demand they probably in batches of 10. There is a peak popular during the planting season and summer periods as a great deal of people make contact with traveling their bikes after the winter, and therefore become desirable during these seasons amongst the individuals who own classic bikes. Also since these are vintage bikes, they don't mind spending a lttle bit for getting replacing parts.

The Aftermarket DBPs have a fairly subdued demand as compared to the Specialist DBPs. Since these are DBP that are no longer in standard productions, there are a lot of organisations that contain come out with their own version of the DBP and hence the customer has more choice. So, in such a case, the client will go by brand image, price and the grade of the merchandise.

The Original Equipment DBPs on the other palm, will have a very stable demand that'll be recognized to Friction Materials well in advance. Quality and price become very important for such a product and therefore they become more of a item.

Hence in line with the above discussion, the merchandise have been located in the Puttick Grid as shown below in Number 1. 1. 1

Super Value Product

Responsive/Jobbing/Fashion

Specialist DBP

Consumer Durables

Commodities

Original Equipment DBP

Now that people have an understanding of where in fact the product lies with regards to the Puttick Grid, we can distinguish which competitive factor can be an order champion and which can be an order qualifier.

Characteristic

Aftermarket DBP

Specialist DBP

Design

-

-

Brand Name

60

60

Price

40

40

Speed (Lead Time)

Q

-

Dependability (Supply)

QQ

Q

Quality (Fit to purpose)

Q

QQ

Table 1. 1. 1: Order Winners and Qualifiers. (Adopted for Hill 2000)

[Take note of: Order Winners are designated out of 100.

Q: - Order Qualifier; QQ: - Order Looser. ]

Characteristics

Original Equipment DBP

Design

40

Brand Name

10

Price

40

Speed (Lead Time)

10

Dependability (Availableness)

QQ

Quality (Fit to purpose)

QQ

Table 1. 1. 2: Order Winners and Qualifiers. (Adopted for Hill 2000)

[Take note: Order Winners are proclaimed out of 100.

Q: - Order Qualifier; QQ: - Order Looser. ]

1. 1. 1 Design

The links between design, operations and markets are the very fact of the business. The way that these integrate, therefore, is important to appear strategy development and implementation. Both design and functions' aim is to provide products in line with the complex and business specifications. (Hill & Hill 2009)

In case there is Aftermarket DBPs, the proportions of the DBP are computed from the equivalent OE aspect and then some changes are made to be able to avoid patent infringement. So in cases like this, the look of the DBP is not very important as it is merely reverse designed from an existing product.

In case there is Specialist DBPs, the measurements are extracted from records if they exist or extracted from existing aspect and then designed as a made-to-order item. So in this case too, very little work goes into the look of the DBP because they are already available to the manufacturer. Hence, design of the DBP will not supply the product any competitive border over other competition products.

In case of Original Equipment Company, initially features will get by the motorcycle supplier. But if Friction is determined as the preferred OE for DBP, it will be likely to design the brakes to meet up with the requirements distributed by the manufacturer. Hence, if not first, over a period of time the making of brakes for the OE product range will become the one of biggest competitive advantage that the company could get in receiving the order.

1. 1. 2 Brand Name

Through a number of activities, companies try to establish a brand because of their products in the market. Where it has been achieved and preserved, companies will gain orders partly because of the image that has been created in the market. (Hill & Hill 2009)

In case there is Aftermarket DBPs and the Specialist DBPs, the brand, Stop-Rite, play a significant role in receiving orders for the business. Since these parts are no more in standard creation by the OEM, there is a whole lot of competition in the market to win purchases for the products. And hence the brand image, which Friction Materials Ltd has taken care of going back 20 years, becomes the biggest competitive edge in the market to win requests.

In case of the OE DBPs, primarily Friction Materials is trying to win requests and hence it generally does not have a brand name in the OE market as of now. But as they commence to win requests and create them on the market, their brand will learn to help them gain orders and hence, as time will progress, brand name can be an order champion.

1. 1. 3 Price

In many market segments, especially in the development, maturity and saturation phases of the product life pattern, price becomes an essential order success. When there's a range of products to choose from, price evaluations with alternatives becomes a fundamental element of the customer's evaluation of the merchandise and therefore price plays a very important part in earning requests. (Hill & Hill 2009)

In case there is the Aftermarket and the Specialist DBPs, since there are a great number of alternatives on the market, price eventually become one of the primary reasons why the client chooses to buy the product, as if there are two products get together his criteria, they may be bound to buy the cheaper product. Hence they become an order success.

In case there is the OE DBPs, because the manufacturer will choose the product in volume, he is going to want to buy them from a manufacturer who is in a position to produce them in the least expensive possible way and who also satisfies their requirements. Hence price in this case becomes one of the primary factors for choice.

1. 1. 4 Quickness (Lead Time) and Stability (Availableness)

A company may be able to be eligible for an order/earn an order based mostly on how quickly they are able to supply the product or if the merchandise is already designed for delivery/purchasing for the customer. Hence could it be very important that the Businesses Lead Time must have the ability to match the client Lead Time. (Hill & Hill 2009)

In case of the Aftermarkets DBPs, the capability to deliver the DBP faster than others may have an effect on the spares stores to make an order to the maker. This is possible if the lead time for the merchandise is less and therefore lead time becomes an order qualifier. With respect to the customers, the product being available on the store self become an order qualifier, i. e. they consider the merchandise as a possible buy. However in case the product is unavailable on the shelf, means that even though their product is better than the competition, they'll lose an order and hence this becomes an order looser.

Similarly, in case there is the Specialist DBPs, since these are mainly made-to-order items, the lead time will not give an influential competitive advantage over the competition. But at the same time, availability/delivery of the product has to be on time and this becomes a key point that the customer will take into consideration when he/she is looking to buy a DBP for his/her Classic Motorbike. Hence option of the product on time becomes an order qualifier in cases like this.

In case of the OE products, the motorbike maker will be looking for a manufacturer who can produce the parts and deliver them in the shortest possible time. Hence acceleration or business lead time becomes an order winner. Also, being a local dealer to the neighborhood motorcycle industry will give them a competitive advantage over other outdoor competitors as they will be able to react to the demand much quicker. But, furthermore, having the ability to deliver the merchandise on time is going to be a very important factor. So important that first, some past due deliveries may lead to the manufacturer going to another supplier as you are unable to meet his demands on time. Hence dependability becomes an order looser.

1. 1. 5 Quality

Quality or Quality Conformance can be explained as ability of your manufacturer to manufacture products in line with the customer's requirements. (Slack et al 2002)

In case there is the Aftermarkets and Specialist DBPs, nobody is going to consider purchasing the product if you don't are certain that the DBP is fit to use on the particular street bike model. Hence for both these product runs, quality becomes an order qualifier. That is, only when the DBP is fit to make use of on a specific customers motorcycle, they will consider buying that DBP.

In case of the OE products, since now they want to become suppliers of OE products for the first time, quality has to be bang on concentrate on. It has to meet all the client requirements. Any lapse of quality may lead to a halt in the manufacturer's assembly line which is going to cost them a lot of money. Hence any lapse in quality of the OE suppliers' part will give a bad impression and hence can lead to the supplier dropping the order. Hence quality for the OE product range becomes an order looser.

1. 2 Implications on Operations

The Polar diagram (above) shows all the competitive factors for all the product range and their relevant importance for earning orders. Hence, in ways, the diagram also helps understand where Businesses should concentrate more so that they will be able to produce more products that'll be able to gain the orders on the market.

From the above diagram, we see that for all the three product runs, Price, Quality and Stability will be the common performance objective that can help give them competitive edge in the market. Hence operations must target more on reducing the price tag on the merchandise and at exactly the same time make an effort to keep quality at a good level and always deliver the goods promptly. Also, we see BRAND is vital for the Aftermarket and Specialist market. But if operations can maintain price, quality and stability; it will maintain and perhaps even built up the brand name of the product. Also, by focusing on dependability, operations will keep the lead time (acceleration) of the product to only possible to meet up with the delivery times and hence rate is also taken care of. Hence by concentrating more on price, quality and dependability, operations can cover all the order qualifier and victor factors of all 3 product runs.

2 Manufacturing Strategy for the OE product

2. 1 Framework

Hill, T. (2009) reduces the procedure of developing an operation/manufacturing strategy into 5 simple objectives.

2. 1. 1 Defining the Corporate Objectives

The recent future Corporate Aim of Friction Materials is to try and break into the OE product sector. This will help them isolate the financial burden that they have to carry because of the ever lessening prices because of cheap Far Eastern Aftermarket DBP available for sale. Hence another Commercial Aim is to make them more stable economically by entering a highly profitable and permanent contract product range. Other standard corporate purpose like Earnings and Development and ROI also connect with Friction Materials Ltd.

2. 1. 2 Determining the Market Strategies to meet these objectives

As said in the organization Objectives, Friction Material Ltd. is now trying to enter in the initial Equipment product market. Quantities in the beginning (during sampling stage) will be low, to the order of 300. But once their examples get approved, they will start producing the products in high volumes, to the order of about 3000 DBP/week.

Keeping these facts in mind, the ONLINE MARKETING STRATEGY for the OE product range is to produce and deliver high quality - low cost DBP on time, each and every time.

2. 1. 3 Just how do products win requests in the market place?

As pointed out in Section 1, the major factors that earn orders for the OE product is Price, Quality and Dependability (in conditions of delivery). Once Friction Materials becomes the choice for OEM for DBPs, they have to create the brakes themselves and hence Design also becomes an important order winner.

2. 1. 4 Establishing the most likely mode to produce these models of products - Process Choice

We are in process of getting examples accepted for the new OE product range. Currently we are making only the Spares and Specialist product ranges and this is performed in a batch process stream layout. That is okay for these ranges as they are in small quantities of about 300 DBP/week. However the new OE product range is going to require about 3000 DBP/week. Hence the Batch structure won't suffice to meet this quantity demand. The most appropriate process choice for such a huge demand is the Mass Layout or the Continuous Layout. But the continuous layout demands a bigger investment in terms of the money involved. Since Friction Materials is only starting to try to establish itself in the OE market, it would not be smart to tie up most of the Companies money into something that may not workout to the magnitude expected. Hence the Mass Structure appears to be a more sensible choice.

2. 1. 5 Provide the manufacturing infrastructure necessary to support production

Providing the infrastructure to aid development of the new OE product will incorporate some amount of trade off in the sense of a balance between the various competitive factors that will have an effect on the power of the product to win purchases. For instance, from the polar diagram (Sector 1. 2) we see that dependability and cost of product play a very important role in assisting the product succeed orders. To be able to always deliver the product on time, we should will have enough stock with us to meet up with the demand. This may mean that we make-to-stock the merchandise. But if we have a lot of inventory, this means that we have a lot of money organized as inventory which may lead to increase in the price of the merchandise to help insulate this cost. But this increase of cost may lead to lack of an order. Hence what amount of inventory would be sufficient to always meet customer requirements and not keep a lot of money in inventory is the trade off that people will be enthusiastic to consider. This process of trade off balance will help the manufacturing/operations to align itself with the corporate strategy. (Slack et al 2002)

2. 2 Evaluation of Current Functions System

Before we can begin formulating and making changes to the development system, we must first determine what the existing system is. We can do this by using various tools. We will use the SWOT examination tool to do the same. After we know where the current production capacities are, we will be in a position to make decision taking into account the current situation.

2. 2. 1 SWOT Analysis

Strengths

Weakness

  • The brand Stop Rite
  • Established producer of aftermarket DBPs in the united kingdom and European Europe
  • Competency to make the brake pad mixture
  • * Good liquidity and turnover
  • * Bad development planning system even though a MRP system is in place for the same

Opportunities

Threats

  • OE market will lead to more opportunity in the European union market.
  • OE market will help insulate the competition and market show due to ASIAN Competition
  • * Growing to a medium range company will help in being able to handle more customers
  • * Competition for cheaper ASIAN Competition

Table 2. 2. 1: SWOT Evaluation Tool

The brand name Stop-Rite is one of the primary strengths of Friction Materials Ltd. This is what is assisting them win purchases in the Specialist market and the aftermarket market. This brand name that they have, they have had the opportunity to determine it because to be one of the main trusted DBP company in the united kingdom and Western European countries market. This is also one of the talents that they need to exploit. They have a competency in creating their own blend for the DBPs, which helps keep the price tag on the product down. Also, even as we can see from the financials, their Quick Ratio is approximately 1. 03 and their Current Proportion is approximately 1. 8, both which are very close to the acceptable values and therefore the company is doing very well economically. And as they say Cash is King, this is their main strength.

But even though they may be strong in these areas, their creation planning system is of low quality, or up to industry requirements. Even though they have a MRP II system in place, the Planning Controller must fire combat situation that should not arise due to system. This shows one of both situations, either the look Controller is not familiar with the machine or there may be something wrong with their planning system. This can cause a lot of problems if they are to start development for approximately 3000DBP/week for the OE product.

Opportunity wise, the OE product can help gain more market share in the Western European market and therefore improve their brand name even more. Also, since this will be a more dependable market, this will help insulate a few of the market show loss due to the cheaper Far Eastern Rival products in the Spares market. This can help the company increase financially which is always the main goal of any organisation. Once the organisation has more market share and money, they can simply change to a medium size company and hence focus on more customers.

The only threat that the business faces is due to the ASIAN products. They may be almost as effective as their DBPs, nevertheless they are much cheaper than Friction's DBPs and hence this sometimes brings about loss of market share. Entry to the OE product market can help these to insulate this damage.

Now that we are obvious on where the organisation current advantages and weakness lie, we can develop our manufacturing technique to complement the advantages and negate the weakness of the organisation.

2. 3 Elements of Manufacturing Strategy

Miltenburg (2005) divides making strategy in six main sub-systems and terms them as Creation Levers to reflect the concept that every sub-system can be modified to align according to advertise demands and corporate mission.

2. 3. 1 Sourcing

Current set of all the suppliers to Friction Materials Ltd. are mainly UK based. This is good as this assist in decreasing the processing business lead time of the part. Since presently, their production demands are very low, to the order of 300DBPs/week; these were unable to influence their suppliers to deliver Just-in-Time. However now since they are looking to produce to the order around 3000DBPs/week; they must be able to encourage the suppliers to deliver Just-in-Time. Additionally, they ought to bring the list down in quantity and probably sign long term deals with their most dependable dealer as the demand for the OE market is very stable and this long term contracts can help with the demand and also improve relations with the suppliers. But good care should be taken when such contracts are framed, so that if the provider does not make the delivery, then Friction Materials is absolve to buy that demand from another distributor. (Quinn and Hilmer 1995)

In terms of the product range, since making DBPs is their main know-how, I feel that they need to continue steadily to produce almost all their existing product range so that they do not lose their market talk about and customer platform. The level of vertical integration should be maintained to a minimum and Friction Materials should focus on its main competency of earning the DBPs. Smaller parts of the product like the packing materials should be bought from an exterior vendor.

2. 3. 2 Process Technology

Hill (2009) uses a profiling method to help decide what kind of development process is good for a particular kind of product be based upon the account of the product. We will use this profiling approach to decide the kind of process that we will use for the OE selection of product.

Relevant Aspects

Characteristics of Process Choice

Product

Job

Batch

Line

Type

Special

Standard

Range

Wide

Narrow

Order Size

Small

Large

Level of Change

High

Low

Rate of NPD

High

Low

Order-Winner

Del. Speed

Price

Process

Technology

G. P.

Dedicated

Flexibility

High

Low

Volumes

Low

High

Key Tasks

Meet Spec.

Cost

Investment

Low

High

Table 2. 3. 2. 1: Hill's Profiling Approach

(Source: Hill and Hill 2009)

For the OE product range, we realize the following:

  • The order quantity is going to be high; hence the merchandise is likely to be standardised. Because the product is standardised, it is reasonable to have equipment dedicated to the item such that it can turn out more product and help meet the high demand. Therefore will reduce the flexibility of the process, but that is clearly a trade-off that must be taken to meet the popular.
  • We are going to produce only a certain types of DBPs, hence range is very small.
  • The modifications in the look of the DBPs will be minimal.
  • New designs will only be developed when there is a requirement of it, hence the speed for new product development is also low.
  • Order-winner for the OE product as reviewed above is a balance between delivery quickness and cost. Hence the key task for the process is bringing the cost of the merchandise down.

Hence we see from the above table, almost all of the profile of the OE product works with the Line Process choice. Hence inside our circumstance, for the OE product range, it is a good idea that we go for a Line process. Currently, the Spares and Vintage DBPs are being stated in a Batch Equipment Paced Brand Flow.

They are running functions with 3 machining centres, each comprising a set of inter connected CNC machines with journal feed. But even with a demand of only 300 DBPs/week compared to a demand of 3000 DBPs/week, the 3 machining centres are working at full capacity and frequently require overtime to meet up with the demand. Hence it is merely rational for Friction Materials to in a few new machining centres for the new OE development line that'll be mainly be utilized for OE production, as they will find it difficult to cope up with the demand with the prevailing infrastructure available. In fact, Friction Materials should look to start to make investments into a few of the other machines that they require for the creation of DBPs to help deal up with this new OE demand. Additionally it is advisable to get this to new investments into the shop floor as the OE market is a profitable market which has a very secure demand and this demand will be there for quite some years and therefore this investment can be easily retrieved through the life cycles of not OE product, but probably two or three OE products.

The existing manufacturing process structure should be used for the OE creation also. The procedure has been set up taking into consideration the capacity of the mixing machine, set up time on the presses and stock levels and therefore they are made to give the complete process a flow.

But setting up a totally new production collection demands a lot of capital being invested and it will take quite a while before you'll be able to break even for this investment. Hence the logical thing to do for Friction is always to invest in some new machining centres, so that they would be able to able to deal with the demand. But these new machining centres should be focused on limited to the OE products. And over time, with increasing revenue from the OE business, they can keep adding more machining centres to create a separate brand for the OE product.

2. 3. 3 Creation Planning and Control

The production of DBPs has been divided majorly into two process; namely Pressing and Finishing. The Pressing team manages making the brake pads; the Finishing team manages machining the DBPs to ensure regularity of the physical measurements of the pad. Since both these procedures are independent of every other, they are really connected to one another with some decoupling or WIP inventory (Miltenburg). In our case, the cooking process is the decoupling process.

The two bin system can be used for inventory control for raw materials. In this system, the buffer stock in retained in the next bin and the current stock in maintained in the first bin. After the first bin is emptied and the buffer stock is brought into use, the purchase team should place orders to the respective material distributor for replenishing the materials.

For quality control, the organisation is already running on Statistical Process Control charts for the Spares and Specialist market. But this is acceptable for these products as their development volumes aren't very large. The OE volumes are going to be very huge and hence SPC may not be a good choice for quality control. SPC looks at maintaining the grade of the merchandise that the operations inside the organisation. Since OE is certainly a big market and where it is always important to get things right the very first time, every time; it is best that Friction Materials looks into employing Total Quality Management (TQM). TQM not only looks into the quality of parts being produced inside the organisation, but it takes the whole source chain into account and considers to it that not only will be the part being produced are up to quality specifications, but also parts entering into the system are of ideal quality as it is improbable to product good quality parts out of sub-standard parts. (G&E Systems). Also in TQM, each staff member becomes accountable for keeping the grade of their output up to standard. Hence this virtually removes the necessity of an excellent control team in the company.

2. 3. 4 People Resources

The major machines, that require training in the whole creation process at Friction Materials, will be the press machines and the machining centres. The current workforce applied at Friction Materials is very well trained and are adaptable enough to focus on any process within their block. But we see that there is considerable time that goes into the installation of the presses when there's a need to change the design of the pad. Therefore the employees can be further been trained in how to reduce the create time for the presses.

Regular maintenance has been completed at Friction Materials by the existing workforce itself, but they have to generate a specialist for major adjustments and new tooling for the machining centres. So since this does impact their business in a way, Friction should consider a development program to train a number of their workers in tool development. This can be one of their employee training plans where they can promote talented and experienced staff with enough knowledge of the machining centres.

The spray painting of the DBPs are being carried out manually and therefore they will desire a minimum degree of skill so that the DBPs are up to customer benchmarks. Hence they can also educate their workforce because of this.

The presentation area does not need a very skilled labour. But to keep personnel interested in this technique, they can separate the duty into sub-task, for e. g. an organization to place the brakes into the box and a group to keep the stickers onto the boxes. In order to avoid people getting bored stiff, they can use a rotational plan and keep moving over people between your two jobs.

Also, since we will implement a TQM system in to the organisation, employees should be trained to see how they can constantly keep their outputs up to quality expectations.

2. 3. 5 Company Structure and Control

The current organisational structure of Friction Material Ltd. is given below.

Friction Materials Ltd. - Organisation Chart

The current organisation structure is fairly decentralised and simple for such a small size industry, which is definitely good. There's a individual design team that takes care of the design and the grade of the recycleables; a separate purchase team that is involved with purchasing. There's a different team that grips the IT and money of the company. There are clubs in the businesses division that manage the two major techniques. Hence the tasks and duties within the company are well defined and hence there is no confusion scheduled to incorrect communication between departments. With the addition of some more employees on the shop floor and the sales force; the organisation composition will be adept for the OE production also.

2. 3. 6 Facilities

The current company site has the extra room required for expansion and set up of a separate production collection for the OE product range. Since the product is a standardised design, this lines service should be dedicated to only the OE products, and the already existing facilities can be used for the other products.

The company is currently located in Lutterworth. There's a great deal of skilled labour available in local towns and therefore skilled-labour wise, the company is at a very favourable location. Also, since the town in nearby the motorways, it is very easy to get at from the logistics perspective. Also a lot of re-creational centres and housing complexes are coming up in the city and hence this will help in attracting younger era of skilled employees, who would prefer to maintain town which may have a bit of re-creational activities.

For the OE products, because the orders will be placed one year in advance, the demand account is going to be very stable and therefore we should hire a capacity plan that anticipates the needs, as we know the demand profile. As a result of this aspect of the demand account for the OE product, we will be able to intend to use the new equipment bought to help meet the OE demand. In this manner, we will always be able to focus on the market demands. This can help in timely deliveries and create more client satisfaction.

But setting up a totally new production collection demands a great deal of capital being invested and it'll take quite some time before you will be able to break even for this investment. Hence the reasonable move to make for Friction is always to spend money on some new machining centres, in order that they can able to handle the demand. But these new machining centres should be dedicated to limited to the OE products. And over time, with increasing income from the OE business, they can keep adding more machining centres to create a separate series for the OE product.

(Be aware: Not exact representation of the layout)

As shown in the shape above; assuming that the current layout is the same; machines in the average person shops which will be focused on only the OE DBP development.

3 Performance Way of measuring using the total amount Scorecard for the OE product

3. 1 Introduction to Performance Measurement

Developing and implementing a manufacturing strategy is merely the start process in an organisation's strive for excellence and change. This plan has to be measured to check on if the strategy is definitely moving the company towards the targets it had setup when it was coming up with a production strategy. This way of measuring of the strategy is called performance measurement. This measurement is actually divided into 4 distinct dimension sub-systems (Kaplan and Norton 1996).

Financial Perspective

Customer Perspective

  • Percentage increase in revenue
  • * The Cash-to-Cash routine: Check to see if this has increased or decreased
  • Customer Satisfaction
  • * Customer Acquisition

Internal Business Process Perspective

Innovation and Learning Perspective

  • Quality checks
  • * Asset Utilisation
  • Employee Satisfaction and retention and Per Worker Contribution
  • * Determination and empowerment of the workforce

Table 3. 1. 1: The Balance Scorecard.

(Source: Adopted from Kaplan and Norton 1996)

3. 2 Financial Perspective

To consider the financial point of view of performance way of measuring, we can categorise the products into 3 main classifications; Growth-stage, Sustain-stage and Harvest-Stage (Kaplan and Norton 1996). Consider the aforementioned classification; we can carefully say that the OE products will fall under the Growth-Stage product classification.

For such a product, Kaplan and Norton (1996) say that the most common performance way of measuring system ought to be the percentage increase in the income and the sales expansion in the targeted market of the merchandise. Also another measure can be the percentage of income generated by the new product only. Financial measures like Cashflow increase and ROCE will not give a clear communication of the performance because usually with services, there may be capital investment that is included which may lead to low ROCE and sometime negative cashflow too. Hence these do not give a clear communication about the performance of the machine. Big MNC's like Hewlett-Packard and the 3M Company are recognized to have implemented such system, when they attended up with new products.

Another measure from the financial perspective could possibly be the Cash-to-Cash circuit time. Cash-to-Cash circuit is basically enough time taken by a company to convert cash obligations to supplier inputs to cash receipts from customers. The smaller this time around period, the better is the money liquidity of the company and hence this is actually good for any business (Kaplan and Norton 1996).

3. 3 Customer Perspective

In the client perspective component of the Balance Scorecard, an organisation tries to recognize the customer and market segment that will help generate the revenue for the financial targets of the organisation. Of the many possible performance measurements, focussing on two particular can provide Friction Materials the correct measure of how the change is the machine has effects on their customer, specifically Customer Satisfaction and Customer Acquisition (Kaplan and Norton 1996).

CLIENT SATISFACTION basically deals with market study and feedbacks from the marketplace and customer to determine how they feel about the product and service they are acquiring from the organisation. This is done in several ways, to mention a few every month feedbacks, mail surveys, phone or personal interviews with the customer. Mailing out a survey is super easy, but if it is not designed specifically to find the answers you want form the client, they can give a wrong way of measuring the client satisfaction. Hence it is very important that the review are suitable for the purpose of getting the correct feedback from the client. This kind of method can be used by many organisations like British Airways, Boeing, Proctor and Gamble, Xerox, 3M, PepsiCo to name a few (Kaplan and Norton 1996).

Another measure of the procedure from the customer perspective can be Customer Acquisition. That is a measure of the rate where the product appeals to clients in the targeted market section. Because the OE business is a new portion for Friction Materials is new, this may be a good solution to justify its investment funds to get into this business (Kaplan and Norton 1996).

3. 4 Internal Business Process Perspective

This perspective of the Balance Scorecard basically handles identifying procedures within the organisation that can add value to the customer's and the financial targets of the organisation.

Other general factors like Quality can also provide a good measure of how the strategy has afflicted the overall quality of the machine. There are many ways to measure quality, for example Statistical Process Control.

Managers must have a good estimation of the overall advantage utilisation of his/her flower. This utilisation can help him identify to point of bottleneck in the production line. This consists of various factors such as set-up time, malfunction time, etc that have an impact on the overall efficiency of the machinery at the shop floor. But the important thing to note about this solution is that it requires a great deal of work from the shop floor employees and therefore may not always provide a very accurate measure if the employees aren't comfortable with the many terminologies associated with such a report.

3. 5 Development and Learning Perspective

This element of the total amount Scorecard grows the measures to drive organisational learning and expansion. Some of the measures to take action are Employee Capabilities, which is broken down further into Employee Satisfaction, Efficiency and Retention; and Inspiration and Empowerment of the labor force (Kaplan and Norton 1996).

Worker Satisfaction can be measured in a variety of ways like surveys that can be done annually or a rolling survey can be carried out which engaged a random group of employees getting involved in the study. This survey can be carried out across all levels of the organisation (Kaplan and Norton 1996).

Since almost all of the machinery has been controlled by individual operators, employee production contributes to the value addition to the merchandise and hence this is one of the options that managers may use to enhance the per employee output to satisfy both organisation's financial and the customer's need. This per worker contribution can be computed by deducting the cost of external materials and service from the total revenue produced. This value is then divided by the employee compensation to provide the per staff contribution (Kaplan and Norton 1996).

At the end of your day, if the employer struggles to hold on to employees, then it is a lack of intellectual investment for the organisation and hence this must be assessed. It is usually measured by percentage of key personnel turnover (Kaplan and Norton 1996).

Another way of measuring the learning and innovation point of view of the Balance Scorecard is the Inspiration and Empowerment of the workforce. This can be with techniques such as making the labor force feel associated with some of the business enterprise decision that are used the organisation. These business decisions can be something that affects their work or working environment. This can be done by asking the employees to put forwards suggestion as to what they think can help improve a part of the business process that can help achieve both financial and customer aims. Then after serious inspection of the good suggestion, some of them can be applied. These recommendations should at exactly the same time be exhibited to the employees to ensure they feel that their suggestions are taken critically and also acted upon if they're good enough. Thus giving the employees both inspiration and a feeling of empowerment; that even they can donate to the development of their organisation is a larger and better way (Kaplan and Norton 1996).

4 References

Hill, T. (2000), Processing Strategy: Word & Cases, Second Edition, NY: Palgrave

Slack, N. and Lewis, M. (2009). Operations Strategy. Harlow: Financial Times/Prentice Hall

Pycraft, M. , Singh, H. , Phihlela, K. , Slack, N. , Chambers, S. , Harland, C. , Harrison, A. and Johnston, A. (1997), Businesses Management, Tenth Impression, South Africa: Pearson Education. [Online]

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Hill, A. and Hill, T. (2009). Production businesses strategy, Third Model, New York: Palgrave. [Online]

http://books. google. co. uk/books?id=rQlZPgAACAAJ&dq=Terry+Hill+2009

Quinn, J. and Hilmer, F. (1995), Strategic Outsourcing. [Online].

http://0-web. ebscohost. com. pugwash. lib. warwick. ac. uk/bsi/results?vid

McKinsey Quarterly, 1. (Accessed 22nd Oct 2009)

Kaplan, R S. and Norton, D. P. (1996), THE TOTAL AMOUNT Scorecard: Translating Strategy into Action. [Online]

http://www. netlibrary. com/Search/SearchResults. aspx?__EVENTTARGET=&__EVENTARGUMENT=&VIEW_STATE_FIELD_NAME=2&__VIEWSTATE=&tt1=FullText&t1=The+Balance+Scorecard&ql=ENG&basicEntryButton=Search

Vivek SundaramUniversity Identification: 0956356

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