Time-based competition (TBC) is a term created by US consultant George Stalk Jr to imply that time is a resource for any organisation, business or firm and that it should put to good use. By good use, Stalk meant that organisations need to have a timely response to the changes in the market as well as other environmental conditions (Stalk 1990). The aim of this concept, as used in the supply chain industry, is to take a strategic advantage by making the order-to-delivery process efficient, compact and cost-effective.
Applying the concept of time-based competition in an organisation ensures that time is compressed on all levels in the organisation. The decision-making process will be fast, procurement timelines will be tighter, and there will be a smooth transition in the order and distribution stages. For TBC to be successful, all departments within an organisation need to be in synchronisation with each other. A major factor that affects the Time-based competition is the advancement in technology, which greatly reduces the timeframes in a supply chain. Other factors include customer growing needs as well as increased competition.
This paper will delve into the analysis of the time-based competition as a concept and management strategy in the supply chain of an organisation and by also highlighting how organisations have evolved over time. It will also chart the development of the concept of TBC and highlight in detail the factors that facilitate success in the supply chain. The paper will also apply this concept to Amazon Prime Delivery as a case study and outline how the service has adapted and evolved in order to be successful.
The concept of time-based competition came as a result of organisations wanting to be ahead of their competitors as this determined their success or failure. In his book 'Competing against Time' Time-based competition (1990), George Stalk Jr. revealed that time was an important factor in competitive strategy for organisations. Stalk, who was a consultant at the Boston Consulting Group, says that organisations applying the time-based competition seek to be ahead of their competitors by being fast than them. This means that they are quick in responding to the ever-changing market, they are quick in new product development and introductions, they are quick in adapting technology in their products and services and they are quick in distribution and services rendered to their customers (Johnson and Busbin 2000).
Time-based competition is divided into two broad categories: fast to market and fast to produce. The first form, which is fast to market, is used by organisations that emphasize the reduction of design lead time (Inman 2017). This means that these organisations take as little time as possible to create new products and enhance further technological and design alterations to their products. A good example is Apple Inc. and Samsung Group, both of which make smartphones. These two giant phone manufacturers engage in a fierce Time-based competition in a bit to surpass the other. They are always upgrading their products; developing new technology and designs almost on a yearly basis.
Firms using this form of time-based competition heavily rely on continuously introducing new products or advanced designs of their product in the market so as to gain a greater market edge. Both Apple and Samsung are always releasing new phones such as the recent releases of iPhone XR in September 2018 and Samsung Galaxy S10 in February 2019. Because of this single factor, such companies often dominate and control a large section of the market.
The other form of time-based competition is fast to produce, where organisations focus their energy in quickly responding to the demands by customers on the existing products. They tend to focus more in reducing time throughout their supply chain, from the time there is a request for a product to the time that the product is delivered to the client. They do so by reducing the time at the manufacturing stage (also referred to as through-put time) as well as reducing time at the supply and delivery stage. A good example is American giant retailer Wal-Mart, who replenishes their stores twice as fast as its competitors. Another good example is multinational online retailer Amazon, who has managed to be on top of the food chain in the market.
Although the concept of time-based competition was created in 1990, it is still significant to date more so with the accelerating pace of globalisation as well as advancement in technology. This can be clearly seen by how online retailers such as Amazon are giving other retailers such as Toys R Us great competition, even to closure and bankruptcy (Bomey 2018). The important aspect that online retailers have is investing heavily on Time-based competition.
Scholars over the past decades have been analysing time-based competition as a concept in management strategies. In their findings, they do admit that TBC is a factor that is directly associated with the success of an organisation as well as its supremacy. According to Sapkauskiene and Leitoniene (2010), there are two ways through which TBC is a contributor to the success of an organisation. The first is that TBC through its quick responsiveness gives an organisation a right standing with the customer. This consequently translates to greater sales and a greater market share. The second way is that because of the quick responsiveness and adaptability of organisations using TBC, these organisations enjoy radical productivity and quality in their products and services.
In his book, 'Competing against Time' (1990), Stalk indicates that for an organisation to the time-based competitor they must accomplish four tasks. The first is that the organisation needs to understand the rules of response and how they can use it to their advantage in getting ahead of the competition. The organisation should also ensure that their delivery on the value for their products and systems are a couple times as fast, adaptable and responsive as compared to their competitors. The third task is analysing how much their customer value the capabilities mentioned above; that is speed, flexibility and responsiveness. The fourth task is for the organisation to implement a strategy for always catching their competitor off-guard with their time-based advantages (Stalk 1990).
Stalk further says that organisations that focus on time-based competition get remarkable results as they focus on the element of flexibility and responsiveness. They purposefully chose time as their management strategy and focus on how much time is required to get their customer what they want. These organisations also target and focus on the most attractive customers in the industry who are ready to pay more such as those who want express delivery. Because of this, their competitors are left with less attractive customers.
These organisations also use their ability to be responsive to stay close to their customers, hence making their customers heavily dependent on them. Online stores apply this tactic as their characteristic as a virtual store makes them available to their clients anywhere they are and at any time they want. They also set the pace in the industry especially in innovation and developing technologies. Because of this, they are always surprising their competitors, who are always steps behind. Consequently, they grow fast and make higher profits than anyone in the market.
It is important to note that although factors such as the product development cycle, the introduction of new products and the delivery speed are all vital in the success of a business, there are some which contribute greatly than others. To successfully implement the concept of time-based competition, there are seven strategies that an organisation can implement. These strategies include simplifying the system, integrating the system, introducing standardisation, having parallel activities, having control over the variance, automation, and having excess resources (Carter, Melnyk and Handfield 1995).
Simplifying the system, in this context, refers to reducing the lead times by identifying steps within the process that are no longer of value and are in most cases done inefficiently, therefore, putting risk to the entire process. A company can simplify their supply chain by scrutinizing processes such as procurement, storage and shipping. Organisations such as Amazon, which this paper will use as a case study, have mastered efficient ways of simplifying the system. They have proper procurement policies in place, they also have a wide range of warehouses that are also convenient, and they also have strict timelines and procedures on shipping.
By integrating the system, all departments and steps within an organisation's supply chain are made as one so that there are no barriers that might lead to delays. The logic behind this is to tear down the walls that separate departments such as marketing, design, production, procurement, and inventory; that are better off working together and sharing ideas. This also means that heads of different departments need to properly coordinate in order to ensure a smooth flow of the supply chain.
Organisations can introduce standardisation through reducing and controlling lead times by reusing steps and processes which are common or standard. These may include the packaging, which is quite common in supply chain companies. It may also include processes such as customs and port duties, which are common due to shipping. DHL is a good example of a supply chain company that reuses some of its processes due to the nature of the job it does.
Parallel activities focus on the location of tasks in a process, which could be placed on or off the critical path. This ia very important especially for fast-paced deliveries. A company should have its warehouses or storage units close by so that customers can get theeir products within the shortest time possible. Amazon Prime is a good example of such an organisation. The retailer has various warehouses strategically ocated to serve the clients better and improve on their delivery time.
Variance control focuses on the predictability of the process. High variance means that the process is unpredictable, which could result to higher lead times. Automation simply refers to the replacement of older technologies, procedures and techniques with more mordern and efficient ones. Having excess resources is quite beneficial especially in reducing lead time as there will be no point in time where the process is stalled or halted because of a lack of resources.
In order to properly analyse and appreciate the impact of time-based competition, this paper will use Amazon Prime as a case study. Amazon Prime is part of Amazon, which is an American international technology company that focuses on online retail as well as cloud computing. It is the largest e-commerce store in the world and the largest internet company by revenue globally. Founded in 1994 by Jeff Beoz, the company has diversified from an online bookstore to a video and audio store, electronics, clothing, food and toy store. It also owns a publishing firm, Amazon Publishing, a film and television studio called Amazon Studio as well as provides cloud infrastructure.
Since its establishment, Amazon has evolved depending on the current technological advancements, market changes and the needs of their customers. Because of the high demand from their customers especially on delivery timelines, Amazon then set up Amazon Prime Delivery in 2005 as an option for their clients. Under this provision, cust...
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