Assignment Overview Unit 3 – Individual Project
Deliverable Length: 4-6 pages (not including the cover page and the resource page)
The CK&M Company manufactures a robotic vacuum called the Robo2000. The company sells the vacuum to discount stores throughout the country. The Robo2000 is a basic robotic vacuum with a remote and is significantly less expensive than the robotic vacuum that requires a smartphone and app offered by the competitor, Stone Manufacturing. Furthermore, CK&M has experienced production problems that have resulted in significant rework costs. Stone’s model has an excellent reputation for quality.
• Is CK&M’s current strategy that of product differentiation or cost leadership? • What about the strategy of Stone Manufacturing?
CK&M would like to improve quality and decrease costs by improving processes and training workers to reduce rework. CK&M’s managers believe that increased quality will increase sales.
• Develop an appropriate strategy to achieve this goal. • For each of the 4 perspectives, propose criteria that you would include in a balanced scorecard for CK&M.
Improving Quality and Reducing Costs through Process Improvement and Training at CK&M
CK&M’s current strategy focuses on cost leadership through producing a basic robotic vacuum at a significantly lower price point than its main competitor, Stone Manufacturing (Porter, 1985). However, CK&M has experienced quality issues resulting from production problems that drive up rework costs. To address this, CK&M aims to improve quality and decrease costs through process improvements and worker training. This aligns with a quality leadership strategy that can increase sales through superior product quality (Porter, 1980).
Quality Leadership Strategy
CK&M should implement a quality leadership strategy that focuses on producing the highest quality robotic vacuum through optimized processes and skilled labor (Porter, 1985). This will differentiate CK&M’s product in the market and command a premium price based on quality rather than just low cost. To achieve this, CK&M can:
Implement Lean Manufacturing Techniques
Adopting lean principles like value stream mapping, kanban pull systems, and continuous improvement can eliminate waste in production processes (Womack et al., 1990). This streamlines workflows for increased quality and efficiency.
Provide Extensive Training Programs
Training workers on quality control, problem solving techniques, and operating optimized processes empowers employees to produce consistent, high-quality products (Dale, 2003). Engaged, skilled labor reduces defects and rework.
Balanced Scorecard Metrics
The balanced scorecard should include metrics in four key perspectives to track the quality leadership strategy (Kaplan & Norton, 1992):
Financial – Rework cost reduction, increased average selling price
Customer – Customer satisfaction and retention rates
Internal Processes – Process waste elimination, first-pass yield
Learning & Growth – Training hours per employee, employee engagement scores
In conclusion, shifting to a quality leadership strategy through lean practices and training can help CK&M improve production quality, lower costs, and increase sales versus the low-cost approach (Porter, 1985). Tracking progress with a balanced scorecard will facilitate long-term strategic success.
Dale, B. G. (2003). Managing quality. John Wiley & Sons.
Kaplan, R. S., & Norton, D. P. (1992). The balanced scorecard-measures that drive performance. Harvard business review, 70(1), 71-79.
Porter, M. E. (1980). Competitive strategy: Techniques for analyzing industries and competitors. Free Press.
Porter, M. E. (1985). Competitive advantage: Creating and sustaining superior performance. Free Press.
Womack, J. P., Jones, D. T., & Roos, D. (1990). Machine that changed the world. Simon and Schuster.