Being considered as a critical component of manufacturing strategy (Jing and Sheng, 2008), the competitive priorities helps to build the operation strategy of a firm and in turn helps to analyse, assess the manufacturing performance of a firm. Rasi et al. (2015) emphasizes that competitive priorities are the critical operational dimensions which plays a huge role in the creation of supply chain.
The list of competitive priorities changed, as and when technology, customer expectations, market demand changed, over the years. In the beginning, Skinner considered only cost, quality, delivery and flexibility as competitive priorities (Skinner, 1969) to validate the operational performance of a manufacturing firm, which changed in the 90s where service was included along with the basic competitive priorities (Davis et al., 1999). Butt (2009) assesses the firm’s manufacturing strategy based on the competitive priorities such as product quality, product cost, plant flexibility, product delivery time and product innovation. He considers them as the dimensions of manufacturing strategy. The terms competitive priority and competitive capability has been interchanged in the literature that has been studied, as various authors emphasize that intended capabilities as competitive priorities and realized capabilities as competitive capabilities (Ward et al, 1996). Despite the different terminology descriptions, the most common accepted competitive priorities or capabilities are cost, quality, delivery and flexibility (Li et al., 2008; Russell and Taylor, 2002). Among the competitive priorities there is a trade-off between competitive priorities at times, where the firm must choose the what competitive priority to pursue over the others, but it is purely based on the vision of the firm (Nurcahyo and Wibowo, 2015; Ward et al ,1996). Based on the descriptions of competitive priority as mentioned in (Butt, 2009) and the literature review done, a Table 4.2 has been provided for the firms to prioritize their core competencies.
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Table 4. 2 Competitive priorities by various authors
Author Competitive priority
Hays and Schmenner (1978) Price,
quality, manufacturing operational performance are cost, quality, delivery and flexibility. These
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are the generally agreed competitive priorities amongst researchers (Nurcahyo and Wibowo, 2015).
• Cost:
Low cost production is the well-established competitive priority in the manufacturing environment. Cost is the measure of the amount of resources that are used to produce a product (Hallgren, 2007). Cost leadership should focus on high profit margin based on competitive price of the product, in a way that it does not jeopardize the quality (Jones, 2014).
• Quality:
Quality forms the basis for all the other performance measures or dimensions, as It is the capability to make products with the specification mentioned by the consumer in a reliable and consistent way (Hallgren, 2007). This is the competitive priority that comes second in the list. It is with this competitive priority that a firm can attain excellence with products and selling the products at a competitive price (Jones, 2014). “Quality” refers to the way the firm produces the product with top quality, consistently (Rizvi, 2015).
• Delivery:
This competitive priority measures the product delivery speed, maintaining delivery due date. Delivery is integral part of operations and survivability of a firm (Butt, 2009).
Product delivery is the time taken for the product to be delivered to the customer. On-time delivery of the product, faster delivery than the competitors, reduction in the lead time have been considered to measure the operational performance in the manufacturing environment (Rasi et al, 2015).
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Table 4. 3 Competitive priorities description Competitive priorities Description
Quality Manufacturing products with high quality and as per specifications
Delivery Delivering product on-time, quicker than rivals
Cost Low cost production without compromise on quality
Flexibility Capable of producing variety of products in high volume
Adapted from Butt (2009)
• Flexibility:
“Flexibility is the ability of a company to respond within penalty in terms of time, cost and customer’s value” (Rasi et al, 2015). Flexibility is the capability of a firm to reduce the waiting time between the production order and delivery. Flexibility is also considered as the capability to produce, in terms of customization, variety and volume. Organisations which are flexible provides the customers, various options to choose from variety of products and services in large volume, along with customization according to their requirements (Rizvi, 2015).
• Dimensions of Competitive priorities:
The Table 4.4 highlights the dimensions of the competitive priorities such as cost, quality, time and flexibility.
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Table 4. 4 Dimensions of Competitive Priorities Dimensions of price and cost:
• Manufacturing cost.
• Value added.
• Selling price.
• Running cost - cost of keeping the product running.
• Service cost - cost of servicing the product.
• Profit.
Dimensions of quality:
• Performance - the primary operating characteristics.
• Features - optional extras (the
"bells" and "whistles").
• Reliability - likelihood of breakdown.
• Conformance - conformance to specification.
• Technical durability - length of time before the product becomes obsolete.
• Serviceability - ease of service
• Aesthetics - look, smell, feel, taste.
• Perceived quality - reputation.
• Value for money.
Dimensions of time:
• Manufacturing lead time.
• Due date performance.
• Rate of product introduction.
• Delivery lead time.
• Frequency of delivery.
Dimensions of flexibility
• Material quality - ability to cope with incoming materials of varying quality.
• Output quality - ability to satisfy demand for products of varying quality.
• New product - ability to cope with the introduction of new products.
• Modification - ability to modify existing products.
• Deliverability - ability to change delivery schedules.
• Volume - ability to accept varying demand volumes.
• Product mix - ability to cope with changes in the product mix.
Resource mix - ability to cope with changes in the resource mix.
Adapted from Ifm.eng.cam.ac.uk (2019)
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