GAINING COMPETITIVE ADVANTAGE WITH EXTERNAL CONSULTANTS Dr. Ram K.

Iyengar, President, Technovations International Inc Introduction For gaining competitive advantage, manufacturing companies need to generate innovative solutions through research, best practice development, product improvement and development, and workforce training to: o Improve process efficiency with process and quality control; o Improve products and develop new products, reduce defects, and increase customer satisfaction; o Increase efficiency in the use of resources including energy and materials. o Introduce continuous improvement while reducing environmental impact with interactive training using multi-media based knowledge management system. External Consultants provide "high level" technological and managerial consulting and project implementation services. They are the major resources for technical, management and human resource development inputs to improve manufacturing processes & products quality, reduce resource (energy and materials) consumption, and work with customers to optimize the performance of steel products. Focus The Consultants focus on developing and implementing best practices through innovation and streamlining the manufacturing to reduce costs associated at each stage of production. The Consultants work across the entire workforce, from the top management to the shop floor to introduce an innovation mindset in the entire workforce. The Consultants integrate technology development with product development with multiple approaches by generating, evaluating and implementing ideas that lead to tangible improvements with financial impact. These activities are aligned to achieve the manufacturing companys marketing goals and profitability. The Consultants have experience in manufacturing, the technological capability and expertise to develop solutions for specific challenges, which have eluded solutions. The Consultants also have the knowledge and experience to develop new or enhanced products. Because of this pool of knowledge and experience base, the Consultants reduce time-to-market, and improve cost effectiveness and performance of the products. The Consultants collaborate with manufacturing, quality, marketing workforce as well as customers for identifying problems and opportunities for technology and product development. The Consultants work with the manufacturing companys customers to define the specific problems, since, a comprehensive insight, and the understanding of the nature of the problem, leads to better a solution.

Competitive Advantage Adoption of innovative technology is critical in maintaining competitive edge in order to gain a technological lead over competitors. A continuous investment in R&D and innovations is necessary to develop high quality products, efficient manufacturing processes, and logistics, and more flexibility in the downstream process. Constant investments in research and analyses, and continuous effort in their implementation, facilitate process and product innovations to meet advanced customers demands, and continually reduce production costs. The following strategies is recommended for pursuing competitive advantage: o o o o Changing prices to gain a temporary advantage. Improving product differentiation, including process and product innovation. Using vertical integration or new distribution channels. Exploiting relationships with suppliers.

The manufacturing company should focus on innovation, value chain integration, and partnerships based on: o o o o o Relentless improvement, innovation and change. Involving the entire value chain. Upgrading resources Adopting a global integrated approach Collaborative relationships with suppliers, customers, and knowledge based organizations.

The manufacturing company can gain competitive advantage by linking high quality with custom-made products in demanding end-user segments. The manufacturing companys competitive position is strongly connected to product innovation and value creation, supported by advanced technological innovations and development, as well as strong customer relationships and collaboration. The manufacturing company should focus on its current strengths and further develop its competency and ability to deliver higher quality and higher value added products, and provide solutions and services to customers based on value creation. These may require collaboration for product innovation with immediate customers, and end users with a strong emphasis on information and knowledge sharing. The Consultants can provide the necessary mentoring, guidance and coaching to achieve these. Strategies for Gaining Competitive Advantage When product demand decreases, the manufacturing company should adapt a strategy to reflect the reduced utilization of both fixed plant and mobile equipment. By reducing the frequency of planned maintenance activities the cost of maintenance will be reduced. By

developing flexible operations, maintenance can be scheduled at times of falling prices and deferred at times of rising prices. When sales are lower, the operating costs can be reduced by focusing on core assets to achieve the lowest cost footprint, while optimizing the equipment that is being used, for example, by temporarily mothballing higher-cost areas. This strategy will increase the cash-operating margin. The manufacturing company should focus on increasing efficiency by improving the use of process inputs at minimal costs in all manufacturing units. Mathematical models and analytics should be developed for cost control. In addition, yield and quality initiatives should focus on improving the outputs of the process to get more finished products for the same unit cost. These will lower costs by reducing rework and scrap material. Once again, the Consultant play a critical role in achieving the above. In an environment of low capacity utilization, the manufacturing company should explore and implement another strategy that will focus on value-added products despite challenges of higher setup times and smaller production campaigns, as the opportunity cost of lost time is generally negligible at low capacity utilization. Analytics and Mathematical Modeling for gaining Competitive Advantage Analytics is a set of capabilities, which identifies business issues, assembles facts, reports, optimizes performance, and provides deep insights and answers. In practical mathematical programming the sequence of events is: o Formulate a model, the abstract system of variables, objectives, and constraints that represent the general form of the problem to be solved. o Collect data that define a specific problem instance. o Generate a specific objective function and constraint equations from the model and data. o Solve the problem instance by running a program, or solver, to apply an algorithm that finds optimal values of the variables. o Analyze the results. o Refine the model and data as necessary, and repeat. Predictive analytics and mathematical modeling provide the tools to improve technological, financial, economic, environmental, and market information. These require holistic integration of internal and external structured data along with voice, e-mail, workforce networking and sensor enabled products and assets. Monitoring on a real-time basis provide operational insight and better decision-making. Whenever a manager has to repeatedly weigh multiple factors to arrive at decisions, the use of predictive analytics can improve such decisions and reduce inefficiencies. This also refocuses the internal cross-functional sharing of data, to greater coordination and shared understanding of data flows across value chain partners.

Since these are highly specialized functions, which may not be available in a manufacturing company, the Consultants can provide these services. Conclusions In to-days difficult economic and business environment, manufacturing companies need to develop strategies to gain competitive advantage when the turn around begins. Consultants with high technological and management experience can provide the necessary guidance and systems management to steer the manufacturing companies. Dr. Ram K. Iyengar, President Technovations International Inc, a USA based innovations and research company, has decades of experience in managing research, engineering, and manufacturing companies. He has guided large companies in introducing innovations throughout the operations in several plants.