Vanishing Boundaries: How Integrating Manufacturing and Services Creates Customer Value, Second Edition

514 Pages·2013·5.745 MB·English

by  Richard E. Crandall, William R. Crandall

Manufacturing and Industrial Engineering W R
Series on Resource Management
Businesses need to become more consumer-centric, efficient, and quality conscious. Yet . C . C
global competition and supply chain complexity are increasing so rapidly that managers ra ra
n n
must reach across the manufacturing and service boundary to gather more universally d d Vanishing Boundaries
applicable ideas. Vanishing Boundaries: How Integrating Manufacturing and a a
Services Creates Customer Value, Second Edition addresses the unprecedented array ll ll
of new conditions that today’s business managers must face.
V
How Integrating Manufacturing and
The book is a revision of the authors’ previous book, New Methods of Competing in the
Global Marketplace, Critical Success Factors from Service and Manufacturing. The a
concepts underpinning the first edition continue to be relevant today and, in this revised Services Creates Customer Value
n
edition, are complemented with coverage of additional emerging issues in today’s
business environment. The basic theme of the book is captured in its title and illustrated i
s
with the addition of case studies of some of today’s most prominent companies.
h
Second Edition
See What’s New in the Second Edition:
i
n
• The emerging relationship between risk management and supply management
• Risk management and its corollary, crisis management g
• Trends in outsourcing, such as near-sourcing and in-sourcing
B
• Health care improvement programs to reduce cost and improve quality
• Sustainability—alternative energy infrastructure and the triple bottom line o
• Integration of supply chain services to align goods, information, and funds flows
u
• Advances in information technology, i.e., cloud computing, videoconferencing
n
• Present and potential role of social media in attracting customers, servicing
d
customers, and building network trading partners
a
This second edition creates greater awareness of the benefits that businesses can gain by
r
sharing techniques and methodologies across the manufacturing/services boundary. The
i
book emphasizes that successful change management requires a holistic focus on three
e
levels of an organization—its technology, infrastructure, and organizational culture.
It includes solutions and implementation strategies for risk and crisis management, s Richard E. Crandall
sourcing, health care, alternative energy infrastructure, integration of supply chain
services, and advances in IT, social media, and customer relationship building.
William R. Crandall
E S
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i c
K14593 ti o
6000 Broken Sound Parkway, NW o n
Suite 300, Boca Raton, FL 33487 ISBN: 978-1-4665-0590-2 n d
711 Third Avenue 90000
New York, NY 10017
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Vanishing Boundaries
How Integrating Manufacturing and
Services Creates Customer Value
Second Edition
Series on Resource Management
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Vanishing Boundaries
How Integrating Manufacturing and
Services Creates Customer Value
Second Edition
Richard E. Crandall
William R. Crandall
CRC Press
Taylor & Francis Group
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Boca Raton, FL 33487-2742
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© 2010 Taylor & Francis Group, LLC

Contents
Foreword ...................................................................................................xxiii
Introduction ................................................................................................xxv
Organization of the Book ........................................................................xxv
How to Use This Book ...........................................................................xxvii
Who Can Use This Book ......................................................................xxviii
The Authors ................................................................................................xxix
Acknowledgments ......................................................................................xxxi
1 The Vanishing Manufacturing/ Services Boundary ................................1
Differences between Manufacturing and Service .........................................1
Forces That Are Eliminating the Boundary .................................................3
The Economy Is Going through a Natural Evolution .........................3
There Is a Need to Identify Critical Success Factors ............................4
Supply Chains Are Expanding to Integrate Manufacturing and
Service ................................................................................................4
It Is Easier to Blend Tasks, Resources, and Techniques into
Programs ............................................................................................4
Service Businesses Are Looking for Ways to Operate More Efficiently ...5
Health Care Providers Are Looking for Ways to Cut Costs
and Improve Quality .................................................................5
Banks Are Facing Competition from Lower- Cost Banks ...........5
Investment Bankers Are Facing Competition
from Commercial Banks and Discount Brokers ........................6
The Retail Industry Is Moving in Two Strategic
Directions—Low Cost and Focus .............................................6
Manufacturing Is Adding Services to Be More Customer Focused .....6
Post-S ales Services .....................................................................7
Financing of Purchases ..............................................................8
Online Purchasing .....................................................................8
Customer Input to Product Design............................................8
Enhanced Customer Relationship Management ........................8
vii
© 2010 Taylor & Francis Group, LLC
viii  ◾  Contents
Technology Development ...................................................................9
A Movement toward a Process Perspective ........................................10
Outsourcing Focuses More Attention on the Need for Good
Service ..............................................................................................10
Changing Personal and Organizational Relationships ......................11
The Need to Integrate Companies into Supply Chains .....................12
Services Become More Relevant to All Types of Customers ..............12
Continuous Improvements Continue to Blur the Boundary
between Manufacturing and Services ...............................................12
There Is a Movement toward an Industry Focus and away
from a Functional Focus ..........................................................12
The Mass Customization Concept Requires a Blending of
Manufacturing and Service .....................................................12
The Vanishing Manufacturing/ Services Boundary .....................................14
Phase 1: Separated Disciplines ..........................................................14
Phase 2: Internal Improvements in Costs and Quality ......................14
Phase 3: Customer Service Improvements .........................................16
Phase 4: Integrated Product and Service Functions ...........................16
Summary ...................................................................................................17
References ..................................................................................................17
2 Critical Success Factors and Strategic Planning...................................19
What Are Critical Success Factors? ............................................................19
The Evolution of CSFs in the United States ...............................................21
Other Changes during a Country’s Economic Life Cycle ..........................25
The Need to Be Effective ...........................................................................27
A Hierarchy of the Planning Process ..........................................................29
What Is Strategic Planning? ..............................................................30
The Strategic Planning Process .........................................................31
The Business Planning Process ..........................................................33
Project and Program Plans ...............................................................34
CSFs Plan ........................................................................................34
A Hierarchy of Critical Success Factors .....................................................34
Background of CSFs in Strategic Planning .......................................35
Characteristics of Strategic CSFs ......................................................37
The Temporal Nature of CSFs ..........................................................38
Startup ....................................................................................39
Growth ....................................................................................39
Maturity .................................................................................40
Decline ...................................................................................40
© 2010 Taylor & Francis Group, LLC
Contents  ◾  ix
The Role of CSFs in Operational Planning ...............................................40
Positioning Strategy .........................................................................42
Manufacturing Flows .......................................................................43
Manufacturing Strategies ..................................................................43
Role of CSFs in Selecting Management Programs ....................................44
Performance Measurement and CSFs ........................................................45
Summary ..................................................................................................46
References .................................................................................................46
3 The ITO Model .....................................................................................49
The ITO Model .........................................................................................49
Introduction to Models ..............................................................................50
Types of Models ................................................................................50
Why Are Models Used? ....................................................................52
Benefits of Using Models ..................................................................52
The Basic ITO Model—Inputs, Transformation, and Outputs ..................53
The General Systems Model ..............................................................54
The Basic Model Extended ...............................................................56
Components of the Model ................................................................57
Customers ...............................................................................58
Outputs ...................................................................................58
Transformation Process ...........................................................59
Inputs ......................................................................................60
Extending the Basic ITO Model into Supply Chain Configurations .........62
A Look at the Supply Chain .............................................................62
The Closed and Open Systems Model ..............................................62
Closed Systems ........................................................................62
Open Systems ..........................................................................63
Closed- System Strategy ...........................................................65
Open- System Strategy ............................................................66
Feedback..................................................................................67
The Fine Art of Building Relationships .............................................68
The Concept of Reverse Logistics ...............................................................70
Why the Interest in Reverse Logistics? ..............................................71
Benefits of Reverse Logistics .............................................................72
Barriers to Reverse Logistics Implementation ...................................73
System Design and Implementation .................................................73
Summary ...................................................................................................75
References ..................................................................................................75
© 2010 Taylor & Francis Group, LLC