3C Approach How to excel: Compare, compile, conduct
Global competition is getting stronger. It is becoming increasingly difficult for toolmakers to differentiate themselves from other companies. The WBA Tooling Academy Aachen has found a way to obtain a superior strategic position and to achieve operational excellence.
Globalisation has led to a great shift in economic power from the Western World towards rising economies such as Eastern Europe and Asia. This trend has accelerated in speed because of less regulation, increasing education levels and heavy investments in local infrastructure. The prolonged advantages in labour costs have subsequently led to a significant cost pressure on western economies.
This pressure has forced companies to find new ways of differentiation, for example, by acquiring new customer segments, introducing innovative technologies and enhancing the time-to-market – in an attempt to skim monopoly profits in the early stages of product lifecycles. A more dynamic business environment and a closer involvement of the customer during product development have further led to an increased amount of design and concept changes during development. This has resulted in less predictability for the entire value creation chain, requiring companies to react more flexibly to change requests. The declining average age of companies listed in the S&P 500 underlines their inability to adapt to changing and dynamic environments.
Industry 4.0 is currently seen and promoted as a potential solution to cope with these distinctive challenges. The real-time networking of people, machines and objects is not only an opportunity to leverage productivity potentials to improve competitiveness, it also enables new data-driven business models to achieve an increase in revenues.
Reliable information about the competitive environment
The aforementioned challenges affect not only the manufacturing industry, they also have a direct and sometimes even greater effect on the tooling industry as the central enabler of industrial, cost-efficient mass production. Not only do series production tools have to be delivered with a higher quality at lower costs, they also have to be engineered, manufactured, assembled and qualified in less time.
Technological trends like lightweight, high-strength materials force tooling companies to handle new materials and develop innovative and robust manufacturing processes. Late changes to the customer product need to be implemented into the tool design in a short timeframe and at lower costs. Customers further expect series production tools to be shipped and serviced internationally with 24/7 service in proximity to the their production facilities.
These challenges are forcing tooling companies to question their current methods of value proposition and value creation. Questions, for example, arise regarding the provided product and service portfolio, technology application, markets, suppliers and tool shop locations.
To obtain a superior strategic position and constantly enhance operational excellence, companies are increasingly looking to obtain reliable information about their competitive environment. This competitive data is used to identify strengths and weaknesses in the global competition and subsequently define action fields. Over the past 20 years, the WBA has developed and constantly improved the unique, industry-wide 3C approach, promoting advancement in strategic and operational excellence as well as enabling long-term success in highly competitive markets.
Understanding the three Cs
The need to constantly adapt to the competition was identified by Peter Drucker, the pioneer of modern management science: “What a business needs most for its decisions – especially its strategic ones – is data about what goes on outside it. Only outside a business does one find results, opportunities and threats.”
Although this idea has been around for quite a long time, it is only now gaining increasing acknowledgement not only in management science but also from successful managers. The idea is to benchmark one's own products, processes, services, strategies, structures, activities and behaviours to the best companies in order to identify and adapt Best Practices to its own needs. Therefore, the main principle of constant advancement is: Learning from the best!
Below, we'll introduce the typical phases of a benchmarking project. The duration of each phase, resource requirements and detailed planning vary from project to project. Experience has shown that it takes about six to twelve months to complete an entire benchmarking cycle. The three consecutive stages of Compare, Compile and Conduct are explained below.