My operations management coursework was based on the ECCO A/S – Global Value Chain Management case study which is an interesting paper on ECCO A/S (ECCO) who have been very successful in the footwear industry by focusing on production technology and assuring quality by maintaining full control of the entire value chain from “cow to shoe.”.
ECCO follow a differentiation business strategy producing the highest quality shoes and they use their operations as one of their main points of competitive advantage.
ECCO’s operations strategy is top-down (i.e. formed in pursuit of its business strategy) and operations-led (i.e. based on the resources and capabilities within its operations). They prioritise quality and reliability; the supply chain is configured to produce in accordance with specification and without error.
ECCO has a very atypical operations strategy compared with their industry peers. Unlike their “branded marketer” competitors they produce their own materials and manufacture 80% of their own products in factories around the world. Owning and controlling the entire value chain gives them huge flexibility and allows them to maintain the highest levels of quality.
Leong et al. (1990) state that operation strategy consists of the key decision areas concerned with the structure and infrastructure of operations…
The report covers:
- ECCO’s operations strategy
- Global vertical integration
- Further operational execution examples
- Manufacturing facilities
- Training centres
- Faster lead times
- Production cycle
- ECCO’s global supply chain
- Drivers and trends in the industry
- Supply chain risks and mitigation strategies
- Intellectual property breaches
- Inventory problems with changes in demand
- Delays in material flows