Logistics - 1st semester
With regard to developing and introducing new products, what lessons did Gillette learn from the Wilkinson Sword and Bic experiences?
Gillette learned that they had to think ahead and be creative to be competitive. They learned that they have to develop their products before their competitors to be the leading company of the market and staying popular to the customers. Russel B. Adams Jr., says in the Gillette case study text: “This is what happens to you if you're not up there keeping ahead of the market”, which shows that Gillette is aware of the problem and of course will try to fix it. To keep up with customers demands they had to do as Bic, who made disposable shavers, even though it would mean giving up profitability. In the long run it would be more profitable than being in the wrong end of the development process of the market. Customers are so important for companies because they always have the right to chose another supplier, as customers did with the disposable shavers development from other companies. Now Gillette has to change their business strategy to be competitive and core competencies have to include development of their products.
Why do you think Gillette was so slow in introducing coated stainless steel blades, even though the company was familiar with the technology? What are the implications for firms faced with making long-term investments in manufacturing and supply chain resources?
Gillette waited to make the coated stainless steel blades because they knew how to make them and they knew they would have to upgrade all their manufacturing equipment to do so. It would be too much of a cost to the company if customers didn't want to buy it.
The implications in making long term investments would be not knowing if the firms will earn revenue or if they will lose money on the process. Therefore they need to be sure before doing so. They have to ask their customers what they want before deciding because customers are so important as they are the ones who decides to buy/not buy the company's product and they provide the only income to the companies. If firms are making long term investments, it could mean having to upgrade equipment in the manufacturing process and maybe they need to get more place for stuck or employ more people
which demands a big effort and financial costs. Therefore they have make sure they make the right choice. If the firms make deals with a supplier (upstream) and customers (downstream) don't want to buy the new product, then they will lose money on the deal with the supplier because they will be stuck with all these new parts they can't use and it would affect the relationship between the supplier and the companies as they both aren't making as much money as they hoped for in the first place. But if they started the whole process by finding out what the customers want and what they can charge for this new product, looking at the development costs as well, a new investment could become very valuable to the companies. Development costs does not only include production costs but also more hidden costs as transportation and warehousing costs. It takes a lot of evaluation and research to figure out what the best thing to do is but by choosing the right decision it can become very valuable to the firms.
Why is it not enough for Gillette to simply design a razor that gives the “best shave possible”? How does manufacturing help Gillette maintain its market share and profitability? What are the implications of having operations and supply chain personnel involved early on in the development effort?
“Bets shave possible” is not always the only thing customers want. As explained in the Gillette case study text, a lot of customers want disposable shavers and they want them cheap, so they can just throw them out afterwards, which makes it easier and faster because they don't have to clean the blade after...
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