Value Chains and Clock Speed
Bruce Hartman
Vish Hegde
PC industry value chain
PRODUCTPROCESS
VALUE CHAIN
Recipe, Unit Process
Details, Strategy
PerformanceSpecifications
Product Architecture, Make/Buy components Time, Space, Availability
Technology, &Process Planning
Manufacturing System, Make/Buy processes
Competing Olympic Rings: 3-D Concurrent Engineering
Product • Customer Needs
• Market Segments• Product Architecture
1. Sourcing: Make/Buy2. Partner Selection3. Relationship Design(spot, alliance, equity, etc.)4. Logistics System Design5. Inventory management Policies6. Relationship Management7. Value Chain Architecture
Proce
ss
Value Chain
• Mission Statement• Operating Objectives • Policies & Procedures -Structural: Bricks, Tech, Org -Infrastructural: HR, Business Processes
3-D Concurrency Model Example
Fine’s Clockspeed (1998) ApproachDouble Helix Theory of Industry/Product Evolution
MODULAR PRODUCTHORIZONTAL INDUSTRY
INTEGRAL PRODUCTVERTICAL INDUSTRY
Fine & Whitney, “Is the Make/Buy Decision Process a Core Competence?”
PRESSURE TO INTEGRATE
PRESSURE TO DIS-INTEGRATEORGANIZATIONAL
RIGIDITIES
HIGH-DIMENSIONALCOMPLEXITY
NICHE COMPETITORS
PROPRIETARY SYSTEM
PROFITABILITY
SUPPLIERMARKET POWER
TECHNICAL ADVANCES
Global Design Chain – Apparel industry
Global Design Chain – Apparel industry
Product Specifications
Samples
Factory
Factory
Factory
Asian Agent
Branded Wholesaler
Internet • Product Specs. Sent• Sample Requirements
• Specs. Received• Sample Status• Price Estimates
Video Conference
• Fit Sessions• Product Reviews
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