Operation Management Report: Time-Based Competition in Supply Chain

This report provides a comprehensive overview of time-based competition (TBC) within operation and supply chain management. It highlights the importance of time as a strategic resource for gaining a competitive advantage. The report discusses the evolution of TBC, its benefits, and challenges, drawing examples from companies like Wal-Mart and Sun Microsystems. It also reviews relevant literature, exploring the historical context of time management principles and the key factors driving supply chain responsiveness in a time-sensitive environment. The report concludes by emphasizing the role of technology, streamlined processes, teamwork, and integrated supply chain management in achieving a time-based competitive advantage.

OPERATION MANAGEMENT

Operation Management
Table of Contents
Introduction......................................................................................................................................3
Overview of time-based competition...............................................................................................3
Literature review..............................................................................................................................5
Conclusion.......................................................................................................................................7
Reference list...................................................................................................................................8
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Introduction
The aim of this report is to understand and discuss the concept of time-based competition in the
sector of operations management and supply chain management. It has always been observed
that the overall success of business operations relies on the timely delivery and distribution of
goods and services. Any business organization and its operational activities depend upon their
inventories, distribution, logistics and supply whose mantra is to be time-bound. In these times of
internet, and the world is virtually online, being time bound can either make or break the success
strategy of any organization. Therefore, in this report, the concept of time-based competition and
its utility in supply chain management is to be discussed with supporting examples and
arguments.
Overview of time-based competition
The concept of time-based competition states that time is a valuable resource and any
organization or firm can utilize it to gain an advantage in terms of market competitiveness. In
these times market situations, which are changing frequently owing to political, social and other
external factors, only time can create an advantage of any company over its counterparts (Xiao
and Qi, 2016). George Stalk Jr., of the Boston Consulting group based in the USA, first coined
the term ‘time-based competition' in the 1990s. It is in the book named ‘Competing against
Time’ where the term was first spoken. Managing day-to-day operations is one of the many
functions that a firm or organization goes through. Amidst these functions, the supply chain
management is something that is of prime importance to any firm’s success as well as growth
(Lambert and Enz, 2017).
The concept of time-based competition or recognizing time as a meritorious resource stems from
the fact that stocking up inventories of products or goods in time goes a long way in creating
positive responsiveness of the organization in front of their customers. George Stalk and Thomas
Hout undertook ten years of research before they put forth the significance of time and its utility
for firms which want to gain success in production, newer product development, in sales and of
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course, in distribution and logistics. Most of the business firms today want to reach their
customers as fast as possible so that they do not miss the valuable time, which they can use to
develop their firm in a complete manner (Ralston et al., 2015).
Being time-bound, companies can offer varieties in terms of products and services, and they can
mitigate the challenges to their consumer base that arise due to higher costs and longer delivery
period. The strategy of time-based competition has removed most of the assumptions, which
firms had related to cost and time being inversely proportional to each other. Earlier it was
thought that when the time is reduced, costs increase, and when investments for improving
quality are made, costs go up (Bode and Wagner, 2015). Such myths were busted when
companies began to understand the effectiveness of being responsive and providing the
consumer what they want whenever they want.
It has also been observed that being responsive in terms of the supply chain can go a long way in
improving the innovation and manufacturing sectors in the organization. Popular and renowned
firms like Wal-Mart, Ford, Toyota, Harley-Davidson and others have taken advantage of time-
based strategies and tasted success in operations as well as supply chain management.
Companies recognize time as the fourth dimension of competitiveness, and therefore the benefits
that organizations like Wal-Mart gained from the time-based competition are as follows
(Badenhorst-Weiss and Weber, 2016):
● Higher efficiency and productivity.
● Increase in annual turnover and development of inventories
● Periodical upgrade of stocks and supply database.
● Profit margin increases as innovation in market emerges.
● Market share is larger as compared to other counterparts.
In addition to benefits, companies also face certain challenges while implementing time-based
competition. Some of the challenges come up in the form of a decrease in production. As
production decreases, there is an increase in shares of the occupied market. Companies that work
by the principle of time-based competition generally do not have any fixed working hours and
the cycle of speed increases. Inventories are needed to be monitored in real time, and delivery
vehicles are to be present at every location possible to reach the consumer faster and within a
short time (Govindan and Hasanagic, 2018).
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To improve production and quality, businesses need to rev up the process and bring radical
changes to the time-based strategy. The reduced cycle time of work can improve work speed and
motivate employees to work, which can be a boon for companies trying to gain their foothold in
times of crisis, and market changes (Thatte, Dhumal and Agrawal, 2018).
Literature review
Historical instances of time-based competition mention that although the term came post-1990,
the concept of time-management existed. It was observed that in times of war and business,
timely response helped in evading of crisis. In the 14th century, Dutch shipbuilders introduced a
system for rapid production of ships, which might be the source of the current ‘Just-in-time’
production system in recent times (Thatte and Agrawal, 2017). The concept of ‘just-in-time’ is in
line with the time-based competition, which has evolved over the years. In renowned
management theories of Fayol and Taylor in the early 1900s to the total quality management
approach in the 1990s, the time has been a crucial concept, which has enabled organizations to
achieve their supply chain objectives and goals (Yang et al., 2017).
According to Stadtler (2015), scientific management theory of Taylor established the automation
in production and stated about dividing tasks into small cycles, which in turn would shorten the
operational time. French management theorist Fayol established the principles of labour division,
centralization and human resources, which needed to be done within a certain time to achieve the
desired goals. According to Singh (2015), Time-based competition (TBC) is of two kinds, which
are related to market and produce. With the faster market concept, firms can develop innovations
in products and introduce changes in design by minimizing the time. It has often been observed
that proper time management can be a beneficial factor for product variations and increasing
market share of the concerned organization (Tay et al., 2015).
Organizations like Sun Microsystems have achieved leadership in their engineering departments
by reducing the time of designing and introducing newer systems. The extensive use of
technology and a competitive mindset are the fillips to such remarkable achievements. The
second concept of faster product in time-based competition refers to the responsiveness in terms
of speed and delivery of products to consumers. Fast-to-product firms emphasize speed in
responding to customer demands for existing products.
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Organizations like Wal-Mart have been able to taste success by introducing more stores twice
than their rivals. In this area, the customer generally relies upon shorter delivery times, and this
has been done by reducing the overall lead-time (Yang et al., 2017). Similar to Just in time, time-
based competition too focuses upon lower delivery costs, less overhead costs, enhanced quality
and consumer satisfaction. According to Seth and Panigrahi (2015), firms can introduce time-
based competition in supply chain management if they follow the five factors, which are drivers
of supply chain responsiveness. The five drivers are production, location, inventory,
transportation, and information.
The factor of production concerning TBC speaks about when, how and what products should be
manufactured for the market, and the handling of equipments as well as quality control. The
second factor of location refers to where the factories and storage facilities are to be placed, and
whether they would be nearer to the customer base so that consumers get their products delivered
faster. The third factor of inventory always works as a buffer and a safety guard against supply
chain uncertainty. There are times when due to external and uncontrollable factors, supply chain
might get affected, and this is when stocked inventories come to the rescue.
The fourth factor of transportation is significant when any organization has to send their products
or services to locations, which are farther from the origin.
Here, concerning TBC, transport modes like airways and roadways takes less time, but they are
cost-intensive whereas railways and shipways are cost-friendly, but they take more time. Firms
have to select which stocks might be sent through which transportation mode that can enable
timely delivery as well as customer loyalty. The fifth factor of information holds an integral part
of both supply chain management as well as TBC. Current observations have revealed that
accurate and timely information to both consumers as well as stakeholders might be
advantageous for organizations who want to stay ahead of their counterparts in the market
structure.
Better decision making, as well as coordination, is ensured when timely and proper information
is disseminated regarding stocks, inventories or any crisis in the supply chain system. A
significant concept in the time-based competition, according to Stadtler (2015), involves the
formulation of effective strategies, which would enable firms to implement timely delivery of
products and services. The steps to proper implementation of such services include simplification
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of systems, integrating systems, standardizing resources, controlling variations, automation,
introducing parallel activities and utilizing resources that are in excess.
Experts believe that these seven strategies would help in reducing the lead-time and achieving
organizational objectives. According to Ho (2018), if firms want to implement TBC successfully
certain factors have to keep in mind. They are:
● Developing performance measurement that involves time.
● You are performing a complete analysis of the process.
● Embrace change when it arrives by developing new methods, tools and techniques.
● Treat crisis, obstacles and bottlenecks as part of the learning process.
● Make employees understand that their contribution to work helps in maintaining time and
improves production as well as quality.
● Enabling the teamwork and cross-functional framework to reduce cost and enhance
functionality.
● Introducing technologies, which help in reducing the time during production and
manufacturing.
● Real-time vigilation of delivery pathways and tracking goods and services until they
reach their destinations.
Conclusion
In this report, the concept of time-based competition has been elaborately discussed concerning
brief examples from renowned organizations like Wal-Mart and Sun Microsystems. To achieve
success, firms resort to improved technologies, streamline systems and processes, and improve
teamwork and use integrated supply chain management to enable a positive time-based
competitive advantage over competitors. The reduction of time is often ensured by cross-
functional teamwork as well as breaking operations into shorter time-cycles. Newer products
have often been produced successfully as seen from the examples given in the discussion above.
The literature review states the factors and the strategies as well as the journey of TBC from an
unknown to a concept that is steeped in reality and is profitable for organizations in the present
market situation.
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Reference list
Badenhorst-Weiss, J.A. and Weber, A.N., 2016. Time-based competition as a competitive
strategy for online grocery retailers. Journal of Contemporary Management, 13(1), pp.433-460.
Bode, C. and Wagner, S.M., 2015. Structural drivers of upstream supply chain complexity and
the frequency of supply chain disruptions. Journal of Operations Management, 36, pp.215-228.
Govindan, K. and Hasanagic, M., 2018. A systematic review on drivers, barriers, and practices
towards the circular economy: a supply chain perspective. International Journal of Production
Research, 56(1-2), pp.278-311.
Ho, J.W., 2018. Cost strategy for product planning under competition. International Journal of
Production Research, pp.1-14.
Lambert, D.M. and Enz, M.G., 2017. Issues in supply chain management: Progress and potential.
Industrial Marketing Management, 62, pp.1-16.
Ralston, P.M., Blackhurst, J., Cantor, D.E. and Crum, M.R., 2015. A structure–conduct–
performance perspective of how strategic supply chain integration affects firm performance.
Journal of Supply Chain Management, 51(2), pp.47-64.
Seth, D. and Panigrahi, A., 2015. Application and evaluation of packaging postponement
strategy to boost supply chain responsiveness: a case study. Production planning & control,
26(13), pp.1069-1089.
Singh, R.K., 2015. Modelling of critical factors for responsiveness in the supply chain. Journal of
Manufacturing Technology Management, 26(6), pp.868-888.
Stadtler, H., 2015. Supply chain management: An overview. Supply chain management and
advanced planning (pp. 3-28). Springer, Berlin, Heidelberg.
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Tay, M.Y., Rahman, A.A., Aziz, Y.A. and Sidek, S., 2015. A review of drivers and barriers
towards sustainable supply chain practices. International Journal of Social Science and
Humanity, 5(10), p.892.
Thatte, A. and Agrawal, V., 2017. Exploring supply chain responsiveness effects on the
competitive advantage of a firm. Quarterly Review of Business Disciplines, 4(3), pp.211-228.
Thatte, A., Dhumal, P. and Agrawal, V., 2018. COMPETITIVE ADVANTAGE THROUGH
OPERATIONS SYSTEM AND SUPPLIER NETWORK RESPONSIVENESS. Journal of
International Business Disciplines, 13(1).
Xiao, T. and Qi, X., 2016. A two-stage supply chain with demand sensitive to price, delivery
time, and reliability of delivery. Annals of Operations Research, 241(1-2), pp.475-496.
Yang, J.Q., Zhang, X.M., Fu, H.Y. and Liu, C., 2017. Inventory competition in a dual-channel
supply chain with delivery lead time consideration. Applied Mathematical Modelling, 42,
pp.675-692.
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