Global Communications Benchmarking - Research Paper Example

Global Communications Benchmarking Table of Contents Global Communications Benchmarking Table of Contents 2 Introduction 3 Just In Time Strategy at Dell 3 Generic Benchmarking at Ford Motors 4 References 6 Introduction The twenty first century has been often stated as the age of globalization in which organizations are breaching political and geographical boundaries to reach out to new markets. This has triggered a wave of competition as organizations are trying to garb each other’s market share.

One such strategy to counter competition is generic benchmarking. This form of benchmarking is different from traditional benchmarking in the sense that it focuses on multidimensional business processes and functions (Zairi & Leonard, 1994, p.50). The following sections would contain a practical analysis of two real time organizations and the mechanism by which they dealt with the strategic issues. Just In Time Strategy at Dell Dell is one of the largest manufacturers of hardware and its related components and has product which cater to the needs of almost every section of the society.

The first Dell PC was launched in 1986 and since then the firm has made rapid strides in technology and customer relationship management (Dell, 2011). At the heart of this lies a successful strategic management policy which is backed by a ‘Just in Time’ strategy. This strategy was adopted after the large scale success of this strategy at Toyota Motors. The nature of demand for products marketed by Dell threw considerable challenges to the organization with regards to inventory management at its facilities.

Idle inventory led to increased storage costs and stock outs led to loss of opportunities. In order to cater to this issue, Dell initiated the Just in time strategy in its supply chain. Under this strategy, the organization stocks a limited amount of inventory which is available at the right time and at the proper place. By virtue of this strategy, Dell was able to incorporate a direct business based model under which the firm could directly take business orders from customers. This has initiated a pull based system in its supply chain in which the firm starts manufacturing only after it receives the order.

This has helped the firm to reduce the inventory costs and to streamline its distribution channel. It has also reduced the inventory carrying cot for the organization by which it is able to achieve higher margins. Further advantages include generation of an efficient market timing which has been used to provide greater value to the customers. This has created better satisfaction levels from the consumers, reduction of wastages and greater levels of cost savings for the organization which has generated consumer confidence as well as strategic and competitive advantage for the organization in the business market (Broyles, 2005).

Generic Benchmarking at Ford Motors Ford Motors is one of the pioneers in the automobile industry with the firm having its business presence across all the major markets. The company has a significant market share in the lucrative U.S. car market. The generic benchmarking process at Ford began with the Ford Motors team visiting Mazda motors in Japan. The analysis of the business processes in Mazda motors revealed considerable efficiencies in their business process. The company officials of Ford observed that Mazda motors had only nine employees in the payable section of the accounts department against the five hundred odd employees present at Ford motors for carrying out the same volume of work.

This aroused considerable interest in the top management of Ford to imbibe Mazda’s strategy so as to achieve greater efficacy and cost reduction. The top management of the firm also observed certain gaps in the business processes of the two organizations. The most significant of these included presence of larger number of suppliers in Ford and absence of invoice system of payment to the suppliers. Ford had an invoice based system of payments whereas the Japanese motor company directly paid the suppliers upon receipt of goods.

This led to heavy reduction of manpower in Mazda. This observation triggered a wave of changes at Ford Motors which included a review of the company’s strategy with regards to its suppliers, business process re-engineering and initiating a system of automation with regards to the flow of information between the organization and its suppliers. This resulted in a change in the relationship between the organization and its suppliers. The other advantages included cost reduction due to requirement of lower manpower, greater efficiency and lower error rates due to use of technology and automation of the business processes as well as greater control over aspects related to payment to the suppliers.

This created greater revenue margins which resulted in value addition and enhancement of the learning curve of the organization. This in turn had effects on the customer relations which became better due to greater efficiency in the organization apart from better relationship and greater control over suppliers (Hussain, 2007, p.32-36). Generic benchmarking is a broad term and a long term strategic tool that takes a long term to materialize. However, recent examples have clearly highlighted that effective use of generic benchmarking not only generates greater value for the organization but also creates a long term sustainable advantage for the organization in the business market.

References Broyles, D.(2005). Just-In-Time Inventory Management Strategy & Lean Manufacturing. Retrieved February 25, 2011 from http://www.academicmind.com/unpublishedpapers/business/operationsmanagement/2005-04-000aaf-just-in-time-inventory-management.html. Dell. (2011). Who We Are. Retrieved February 25, 2011 from http://content.dell.com/us/en/corp/d/corp-comm/cto-customer-driven-innovation.aspx. Hussain, A.A. (2007). BENCHMARKING & BEST PRACTICES. Retrieved February 25, 2011 from http://www.

bahrainquality.org/pdf/Benchmarking%20BQS.pdf. Zairi, M. & Leonard, P. (1994). Practical benchmarking: the complete guide. Springer.