When traditional companies operate from R&D->Production->Marketing&Sales->Customer Service. There is another trend to outsource some parts to outsiders. By outsourcing, companies can focus on their "core" components. For example, Cisco outsources "Production" to outsiders then it can focus on R&D, marketing&sales and customer support. With this model, Cisco has proven to be a great company for years. But the dot-com crash shows its drawbacks. The biggest problem is Cisco's original model works normally on growing market. When its suppliers compete each other and overproduction. Inventory disaster comes. This is fixed by a new production procedure by introduction of new central database which every supplier can check and know how much they can provide and to reduce the over-inventory problem. This is a $2.2 billion dollar lesson.
For long history, Chrysler has been working with suppliers w/o long term commitment and with minimal trust relationship. Sine earty 1990s, Chrysler adopted a new relationship with suppliers by bringing them into the early stage of car design. Encourage suppliers to provide any ideas which can improve the production by providing them a long-term contract. With this kind vertical cooperation relationship, both Chrysler and suppliers benefit. For Chrysler, with the great ideas from suppliers, its new car design time dropped from 234 weeks to 160 weeks. That is a more than 20% cost saving.
In computer manufacture world, HP, Dell are competing for many years. When in PC itself, Dell outcomes HP. But in printer world, HP wins. ex-CEO of HP, Fiorina lead the merge deal between HP and Compaq to try to save cost to provide cheaper computers to compete with Dell. HP also wants to setup a new battle field to fight with IBM on consultant business. At the end, HP can not solid win the battle. And HP also fail to fight with IBM on business consulting business.
No comments:
Post a Comment