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Vol 31 - No 01 - February 2005 Branch news: East Anglia/Thames Valley Branch - Competitive Space Derek Thomason (General Manager, Unipart Solutions Practice) introduced the evening with the quote “What is the difference between a problem and an excuse? Timing”, arguing that companies often don’t make decisions well enough in advance. He illustrated his contention with practical examples from his operational and consulting career. Dr Tim Baines, Senior Lecturer in the School of Manufacturing and Industrial Sciences at Cranfield University, introduced the idea of competitive space in relation to the debate on outsourcing or off shoring, together with a methodology for making decisions in a timelier manner. Dr Baines started by talking about why businesses change and gave some examples where time has shown the decisions to be good or not so good. He also commented that off shoring has always been happening. Ford decided to invest in the UK in 1910. Current government encourages off shoring by having a strategy encouraging companies to move their products up the value chain. Dyson was quoted as an example of off shoring to Malaysia. But was it the right decision, given the UK customer perception that their vacuum cleaners and washing machines are British technical and value products? This was contrasted with JCB who decided in 2003 to manufacture their engines in Cheadle, arguing that they can tune the engines precisely to their products. Dr Baines argued that the traditional approach to supply chain strategy is to take a localised view and to look at prevailing practise. He then offered an alternative approach, which looks at the idea of competitive space. Companies need to look at all supply chains they are engaged with simultaneously, appreciate the dynamics of the landscape within which they operate, and thirdly link their decisions into their competitive strategy. John Edwards of Thermo Electron Corporation then talked about his experience of off shoring to low cost countries (LCCs). He started by discussing motivation. What is the reason why a company outsources? Cost on its own is never a good reason to outsource. Each company needs to identify what’s important to their business and develop a strategy with this in mind. In Thermo Electron they developed a strategy which retained in the UK what was of high value to the business. This focused on customer service. For those areas that could be outsourced they targeted India, China and Eastern Europe. Their strategy involved: John then put forward options such as acquisition, JVs and partnerships with their pros and cons, emphasising that each company needs to decide what is right for them. He also encouraged a rigorous supplier assessment process plus outsourcing of simple components to minimise risk. Intellectual property considerations are also extremely important. When developing the options all costs must be taken into account. Overall the select number who attended had a very interesting and informative evening. The sandwiches were well received, though seeing the SNOW falling outside did make some of us wonder how we were going to get home afterwards. Thanks go to Derek Thomason, Tim Baines and John Edwards for a very worthwhile evening. Steve Palmer, MIOM SP Improvements Related Topics:
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