I’m intrigued by the so-called “sand cone model” which was proposed by Ferdows and de Meyer (1990). The idea was that companies should develop their capabilities in a certain order in order to become competitive. Ferdows and de Meyer suggested that all companies must start with quality.
The picture illustrates that when you develop your production system, analogous to building a sand pile, you must first pour some sand in the middle that form the base. You add quality, but the sand spreads to the sides too. Soon you’ll be adding some dependability.
Consider a hot strip mill. The first thing plant management has to do is to make sure that the plant has the capability to produce products that meet the specifications. Quality requirements must be met before there is there a point in focusing on other improvements.
But acceptable quality is related to dependability. Dependability means e.g. stability, on-time delivery and variability reduction. Pretty soon you’ll want to reduce process variations because quality targets must be met every time.
Only when production meets acceptable standards regarding dependability is it time to develop the speed of manufacturing. Speed is an unfortunate term, and is often replaced with flexibility. The meaning is the speed of response to changes, which can be change of volume, new products, multiple products in one plant etc.
According to the model, it is only after production performs reasonably well with respect to all these measures, is it time to start working on cost reductions.
A problem is that capabilities are really hard to define. Some people refer to the above used four strategic priorities and call the performance with respect to each the company’s capability with respect to quality, dependability, flexibility/speed or cost. I’m not convinced that that makes sense.
Competitive priorities are performance metrics for, not causes of, competitiveness. How well a company performs depends on things like degree of fit between operations and business strategy, as well as the quality and timeliness of the business strategy itself.
I think the sand-cone model has an intuitive appeal to it although the fussiness of the capability concept complicates things. But it also seems that this idea has been resting for a while. Perhaps it is time to dig it up?
- K. Ferdows, A de Meyer, “Lasting improvements in manufacturing performance: in search of a new theory”, Journal of Operations Management, vol. 9, no. 2, 1990.