Thursday, 29 December 2016

Competitive Advantage Using Time Compression Approach

There are three basic elements of competitiveness, which are the customer, the company and the competition. If competitiveness is to be gained there needs to be differentiation between value and cost. Time compression addresses the value and cost differentiations in a certain way. Firstly, there needs to be the elimination on non value activities. This increases the value created in the supply chain. As a result of removing waste through removing non-value activities, the company also sees a cost advantage.

Reducing waste improves the performance of the company. By considering time base implications when removing waste they are able to avoid the additional cost implications in other parts of the supply chain.  For example, inventory needs to be improved by considering the time compression approach. Considering if parts of the supply chain can operate on a make to order or just in time basis can remove a stock point. By doing so, there may not be a need to spend out upgrading a warehouse management system when a new inventory regime is introduced.  Without considering time compression, a company might simply consider upgrading a warehouse management system without seeing any real long term benefits.

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