Global firms like Regal Marine know that the basis for an organization's existence is the good or service it provides society. Great products are the keys to success. With hundreds of competitors in the boat business, Regal Marine must work to differentiate itself from the flock. As you read in the Global Company Profile that opened this chapter of your text, Regal continuously introduces innovative, high-quality new boats. Its differentiation strategy is currently reflected in a product line consisting of 22 models. As firms become increasingly focused and specialized, the supply chain performance grows in importance. Money spent with suppliers represents a huge portion of most firms' revenues. This is the case at Regal Marine where suppliers are relied upon not only for quality components delivered on time, but for up-to-date technology and innovation. Regal expects members of its supply chain to be full partners. Suppliers are expected to join Regal in providing the customer not just quality and on time delivery, but performance and image. Luxury performance boats require no less. At the same time, Regal expects value. Apparently the most appropriate technique for Regal Marine is the few suppliers strategy, having quality vendors and partnering. Vendors meet with Regal’s designers to discuss changes to be incorporated into new product designs. Regal’s strategy of differentiating itself by building luxury performance boats means that suppliers must participate in this ongoing effort. The characteristics expected of suppliers when the strategy is one of differentiation include: * Share market research; jointly develop products and options. * Select primarily for product development skills.
* Use modular processes that lend themselves to mass customization. * Minimize inventory in the chain to avoid obsolescence.
* Invest aggressively to reduce development lead time.
* Use modular design to postpone...