Time Compressed Delivery Process of a Heavyduty, Highway Truck

PreEngineered Option
Custom Engineering

Customer

Dealer

Inquiry Order Entry

Schedule
Assembly

Assembly Shipment

Pricing

Credit Check
Pre-approval Component Supply

JIT Accessory Fabrication

Maturity of Strategic Concepts

. .
Embryonic
Value for the Customer

Shareholder Value

Competitive Advantage

Growth

Mature

Aging

Core Processes for Creating Customer Value

Product Creation
Customer

Order Delivery
Customer

Service Assurance
Customer

Products Fit for Use by Time of Launch

Orders Handled Correctly and Quickly

Transparent Service for Maximum Product Enjoyment

Plan Design and and Specify Test

Launch

Take-in Source Distribute and Order and Manu- Install facture

Maintain Upgrade Dispose and Repair

Quality, Delivery and Cost in Order Delivery

Take-in Order Source and Manufacture
Easy Inquiry into Status of Product-in-process

Distribute and Install

Fault-free Dispatching of Sub-assembly Kits to Site Predictable and Reliable Delivery Time

Quality

Unambiguous Understanding of Customer Request

Delivery

On-the-spot Processing Of Customer Request for Immediate Quotation Low Change-cost if First Quotation is Unsatisfactory

Ability to Specify Desired Product Finishing Close to Delivery Time

Cost

Generation of Product Documentation According to Customer Standards

Low Cost of Immobilization During Installation

Capacity Loss Associated with Working on Several Projects

Effective Capacity
100%
90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

n=1
L=Mental Switch Time (Hours)

L=0.5 L=1.0

L=1.5

n=2 n=3 n=4 n=5 Number of Simultaneous Projects

Waste of Resources Due to Rework

100 70% 40% Potentially 750 Engineers Freeable to Work On New Products

75

R & D Staff Build-up (%)

50 30% 25

Total
Hardware

Fixing
Total Net Productive

Software/Firmware

Opportunities for Lead Time Reduction

Opportunity
Early Involvement of Functions

% of Respondents Quoting Opportunity as Most Important to Reduce Development Lead Time 0 10 20 30 40 50 60 70

68 68
53 46 39 28

Project Management Intensive Planning

Pragmatism Instead of Over-Engineering

Opportunities to Communicate Well

Parallelism in Design Process

Use of CAD/CAM Use of Information Systems 13 23

26

Impact of Unanticipated Competitor Product Introduction

(A) = Actual (E) = Expected

Market (E)

Market (A)

Sales Volumes (Units)

Company (A) Company (E)

Competitor (A)

Competitor (E)

Year -1

Year 0

Year 1

Year 2

Year 3

Impact on Sales Volume and Profit

100
2nd to Market Increased Trade Discounts

Index for 3 Years Cumulative (Expected = 100)

Increased Advertising And Promotion

50

72% of Expected Sales Volume

49% of Expected Gross Profit

20% of Expected Net Profit

Volume

Gross Profit

Net Profit

Creating the Right Products

Technological Obsolescence Commercial Obsolescence Cannibalization Scope for Carry-Over Scope for Commonality Product Integrity Learning and Experience