The phases in this continuous improvement cycle

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The phases in this continuous improvement cycle contains some activities, which are presented in Table 5.2. Each activity is discussed in detail. 5.1.Pre-Plan The benchmarking of present competitive position will show the current position of VPT and its explored and adopted competitive advantages. In other words, this activity illustrates in which point VPT stands and has achieved competitive position. To do so, VPT needs a tool to assess its current position. This tool is called Strategic Competitive Positioning Model, as described though Table 5.3. This table shows VPT’s strategic position. As a matter of fact, on the basis of VPT’s willingness to develop strategic partnership with its key suppliers, the assessment at this stage should confirm VPT’s position at the stage of strategic partnerships. In other words, the characteristics illustrated in Table 5.3, under strategic partnership category, should be entirely satisfied. This is the first step to appraise internal organization. By having VPT’s strategic position at hand, the next effort is to study its relationship pattern with identified key suppliers (not for strategic partnerships yet, but as candidates). This action will be done again by identifying some tool, named Supply Chain Positioning Matrix, which is illustrated in Table 5.4. By going through this table, VPT will specify in which stage it stands in relationship with supplier(s); i.e. price competition, quality competition, close cooperation, or strategic partnerships. As well, it can identify what sorts of development it need to perform to improve its relationships with suppliers from lower stages to upper ones up to strategic partnership level.
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Chapter Five: Developing Supplier Association Model 27 Table 5.2: Activities in different phases of supplier association creation Pre-Plan ° Benchmarking present competitive position ° Selecting appropriate coordination and development tools ° Creating cross-functional team ° Selecting appropriate suppliers Plan ° Benchmarking supplier position ° Jointly target improvements ° Focus coordination and development efforts Do ° Undertake group activities Check ° Measure improvements Act ° Refocus size of group and target areas Source: Hines (1994). Plan Do Check Act Pre-Plan Figure 5.1: Continuous improvement model for creating supplier association
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Strategic Partnership within Supply Chain 28 Table 5.3: Strategic Competitive Positioning Model Stage One: Price Competition ° Characteristics ° Low technology manufacturing and material used ° Competition on cheap prices only ° No added value services Stage Two: Quality Competition ° Prerequisites ° Stage One ° Characteristics ° Limited use of high technology manufacturing techniques ° Limited use of precision materials ° Competition by high quality PPM or ZD products ° Limited value adding processes available in the firm ° Vertical integration Stage Three: Close Cooperation (Coordination and Development of Suppliers) ° Prerequisites ° Stage Two ° Characteristics °
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