Page 39 - DMGT206_PRODUCTION_AND_OPERATIONS_MANAGEMENT

Production and Operations Management

Notes flow of new products of high quality. The design of jobs and work systems is of crucial importance.
The focus is on people.

Examples: Hewlett Packard, Oracle, etc.

2.3.2 Technology Exploiters

Though the strategy is to introduce a stream of new products or services, the objective is to
exploit the potential large volume market, which may follow the new product introduction. The
organization, therefore, from the inception focuses on production design as well as product
performance. The major components of the value creation logic are flexibility as well as low cost
production. Productivity, process technology, and logistics are critical to this type of organization.

Examples: Microsoft, Texas Instruments, etc.
Though TI Cycles also falls in this category, they were servicing a market that was diminishing
in size. Sadly, they were unable to provide value to the customers in the growth market which
was constituted primarily of customers for cost minimizers.

2.3.3 Technological Serviceman

This is a strategy of technological leadership in custom service to low volume markets. This
often embraces extremely high money values.

Examples: Leading software companies, Infosys, TCS, Wipro, etc.,
They customize and build the specifications of their software to the requirements of their
customers. In order to do so, they have to have a highly flexible product development system
with extremely high quality requirements. Potential losses to the customer from quality
compromises, dominates the strategic choice.
2.3.4 Customizers

The strategy is to build custom designs in low volumes.

Examples: Job shop manufacturers, satellite manufacturers, service organizations like
restaurants, etc.
The functional focus is on positioning and the process technology. Often, operating decisions
and the supply chain are crucial. The end product is built or delivered to the specifications of the
customer. In manufacturing, because of low volumes, numerically controlled machine tools,
FMS, and other forms of low volume process technology are often used.

2.3.5 Cost-minimizing Customizers

These organizations deal with products that are mature. The margins are often low but money
values are often high. Customers choose the supplier based on specialized skills. Construction
companies, shipyards, etc., are examples of this type of organization.

Example: L&T must emphasize flexibility and quality and yet minimize costs, in order
to remain a leader in its business.

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