Introduction

As customers become more sophisticated and discerning, the appropriate market becomes more segmented and only the most efficient, streamlined organisation will survive by satisfying the various segment needs of a given market. Businesses must accommodate rapidly changing market demands and a more critical customer if they are to gain market share. As the market matures, so must the organisations operating within that market. Competition is no longer solely based on price. Lately more emphasis has been placed on product differentiation, quality and time-to-market of new innovations. These further considerations / bases for competition have mainly been demanded by the customer. Gone are the days where the customer purchased the cheapest product in the market.

The customer has matured and considers the build quality / service quality and status / brand of the product. Product differentiation is a combination of many factors including brands and image. 'Latest models' are held in high regard, the newest product (while possibly not the best) is considered more desirable, thus lead-time reduction and more efficient design and production is a necessity. Ideas have been adopted from Japan, such as Just-in-time production (theoretically holding zero stock), kanban (system of cards flowing with the production line detailing work to be performed). However there can be no substitute for being able to produce economically smaller batch sizes than your competitors. A truly Flexible Manufacturing System (FMS) will allow an economic batch size of one. While this is not common in reality, it is a target for all organisations to aim at; satisfying the needs of each individual customer. This represents a true competitive advantage.