Just like many other manufacturers of (personal computers) PC, the International Business Machines (IBM) w not spared the difficult times that engulfed the PC market from the early 1990s to the late 1990s. Despite the significant growth of demand for PCs that was experienced during this particular period, many computer manufacturing companies failed to gain distinctive competitive advantage because of overwhelming product and price similarities. IBM was particularly hit by high production costs, an experience that denied the company to offer its products to consumers at discounted prices. By the onset of the twenty-first century, IBM's position as the third largest computer manufacturer in the world had been taken over by Hewlett-Packard (HP). This called for a strategic shift, a move that has seen IBM's reemergence into one of the leading PC manufacturers in the 21st century.
[...] Therefore, JIT manufacturing practices effectively results to cost-effective utilization of financial and production resources by matching production inputs against targeted outputs. A manufacturing company that commits much of its resources in acquiring bulk raw materials that remain largely unused for long periods of time risk wasting financial resources in managing inventories for such stocks. Similarly, production of excessive stocks beyond the prevailing market demand realities results to unfavorable pricing conditions as the company is forced to offload the stocks at discounted prices that lead to lower profit margins. [...]
[...] Kanban is considered to be one of the simplest modalities for managing inventories and controlling manufacturing processes. Based on a signaling method which paves way for the release of production materials into production line only after full utility of the previously released materials, kanban ensures that material outputs are strictly matched to demand. This derives convenience from continuous yet efficient supply of parts whenever and wherever needed. Given that the production of computers and other electronics involves the linking together of many different parts, the kanban system provides just the perfect strategy for IBM to control and monitor production activities. [...]
[...] Porter (2008) further points out new entrants introduce new dimensions into the market and have the potential to shake up the operation capabilities and profit margins of the existing players. IBM can protect against such threats by designing the company's products and services in such a way that switching costs for customers would be high, establishing a supply chain base that takes full advantage of economies of scale, and by investing heavily in capital resources to make it difficult for new entrants to stage a market coup. [...]
[...] Although all these operation management strategies can be applied independently, IBM can achieve optimum reduction of inventory costs by employing a combination of two or more of these lean manufacturing strategies. Conclusion As much as IBM is faring well in the technological and innovation fronts, the company still needs to introduce improvements in its manufacturing processes. By designing new process strategies, IBM will be able to facilitate and implement practical approach to new innovations and knowledge transfer. Engineering new processes is such a magnanimous task that calls for radical changes to manufacturing processes and customer relationships so as to achieve set objectives for streamlining manufacturing costs, tracking performance metrics and adopting automated technology. [...]
[...] With the computer manufacturing industry being exceptionally price- sensitive and extremely competitive industry, the elimination of unnecessary inventory costs must always remain a top priority of IBM's management. Ultimately, inventory costs must be kept under tight control if the company is aiming at achieving sustainable competitive advantage. Some of the practical strategies for controlling inventory-associated costs include setting of performance metrics and adoption of appropriate management styles such as just in time Kanban system, materials requirement planning enterprise resources planning and product-process matrix. [...]
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