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Production and Operations Management Page 1

Production and Operations Management

Assignment

On

Dresding Medical Case

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Production and Operations Management Page 2

Polar Diagram

Current New

Cost 2 1

Dependability 9 9

Flexibility 9 1

Quality 9 5

Speed 1 9

0

2

4

6

8

10

Cost

Dependability

FlexibilityQuality

Speed

Old Strategy

New Strategy

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Old Strategy:

yCost: The importance of cost is low. Because of their technical excellence and their excellentresearch and development exercises the customer is willing to pay a higher price, which

counterbalances the high cost.

yDependability: Customers do not mind waiting for three months but they expect timelydelivery. Therefore, DM needs to provide this level of reliability to the customers.

ySpeed: Significance of speed is low. From the placement of order it takes up to 3 months todeliver the final product. The customer is ready to wait for 3 months for the product.

yQuality: Significant importance which they ensure through their strict quality assurance process.yFlexibility: Need to focus on flexibility because there exists a high level of customisation.

Around 70 per cent of all orders involved some form of customisation from standard base

models.

New Strategy:

yCost: Importance to cost is comparatively more since the customers are provided withstandardized products which have close substitutes.yDependability: Customers are not ready to wait for delivery of standardized products.ySpeed: The speed to manufacture is required to be higher for standardize products. Customers

are not ready to wait; hence speed should be given greater importance.

yQuality: DM lays emphasis on quality as it focuses on technical excellence and expressesconcern about the quality of suppliers.

yFlexibility: There is a high level of standardization which leads to low importance of flexibility.

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Quality ***

Dependability

**Flexibility**

Speed *

Cost*Capacity Supply

Network

Process

Technology

Development

& Organization

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Dresding Medical should not subcontract the manufacture and delivery of

productsfor the following reasons:

By continuing with in-house manufacturing they can have strict quality control and alsocan go for tailor-made customisation.

Bank on their core competencies of culture of technical excellence and willingness tomodify equipment to individual customer needs.

Through in-house manufacturing, they can maintain their superiority in leading-edgeproduct technology and laboratory culture, which was their core strength.

Even though the decision may prove to be expensive in the short run, it will save moneyin the long run.Help maintain control over production to ensure high quality and reliability. Their expertise was to understand the need of clinicians and then create products to suit

that. By sub-contracting they might lose this expertise.

By not sub-contracting they can focus on Operational Excellence of their manufacturingprocess.

Quality **

Dependability

**Flexibility*

Speed ***

Cost**Capacity

Supply

Network

Process

TechnologyDevelopment

&Organization