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IT Strategic Planning for Competitive Advantage ETransformation Strategy for the Garment Industry of

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Title: IT Strategic Planning for Competitive Advantage ETransformation Strategy for the Garment Industry of


1
IT Strategic Planning for Competitive
AdvantageE-Transformation Strategy for the
Garment Industry of Sri Lanka
  • Shiromi Arunatileka
  • BSc (Hons)in C.S.(SL), MBA(SL)
  • Lecturer, Institute of Computer Technology
  • University of Colombo, Sri Lanka
  • Scholarship ADB Funded Science and Technology
    Personnel Development Project

2
What is IT Strategic Planning for Competitive
Advantage?
  • Usage of Information Technology as a Strategic
    Business Tool to gain Competitive Advantage in
    dealing with Business Goals, Industry pressure,
    Market Changes, Competition, Social Economic
    Factors, etc.

3
Sri Lanka and The Manufacturing
Industry
Population 19.1Mn. Literacy Rate
91.8 (2nd
highest in Asia) Labour Force 6.7
Mn. Life Expectancy 73 yrs.
Source Central Bank of Sri Lanka, Board of
Investment (BOI) of Sri Lanka - 1999
4
The Business Environment of a Garment Company
EXTERNAL
Outsourced Companies
Business Partners
Financial Institutions
TQB
INTERNAL
SLAEA
Export Develop.t Board
BOI
Merchandising, Production, Sample, CAD/CAM,
Finance, HRD, Work-study, Storage,QA, IT, etc.
Interest groups
Government
Gov.nt Buying Offices
Local and Foreign Suppliers
Dealers
Market
Foreign Buyers
Local and Foreign Competitors
5
Methodology used to Collect Information for the
Industry Study
Visits to 6 factories in SL
Questionnaires to IT Managers of 120 companies
Interview with an IT Manager of a buyer
company in USA
Garment Industry Study
Interviews with CEOs and IT managers other
senior mgrs
  • Industry related
  • info. from
  • Workshops
  •   The Central Bank, SL
  • The journal of SLAEA
  •   Research of IPS
  •   ILO - labour standards
  • BOI

Web sites of Manufacturers, Suppliers and Buyers
6
SWOT Analysis
7
Application of Micheal Porters Five Forces Model
to the Sri Lankan Garment Industry
Bargaining Power of Suppliers
High
V. High
V. High
V. High
Rivalry Among Competitors
Bargaining Power of Buyers
Threat of New Entrants
Threat of Substitutes
Low
Quick Response Systems
Non-Quota Era
8
Critical Success Factors which give the
Competitive Advantage in the Garment Sector


State-of-the-Art Technology

Delivery
On time
Competitive
Pricing
High Quality
High Productivity
Effective Business Processes
9
The Industry Study
  • Scope and Methodology
  •   Total number of Factories in Sri Lanka 900
  • Total number of Companies in S L 650
  • Percentage selected for the Survey 20
  • The Sampling Technique
  • Stratified Sampling Technique
  • Distribution of Factories by Size
  • Small -282, Medium -445, Large -131, V.Large -33
  • Sample Selected (20)
  • Small - 0, Medium - 89, Large - 26, V.Large 7
  • Responses - (16)

10
The Outcomes of the Survey
11
Mode of Communication
  • External Mode of Communication
  • Fax -- Over 75
  • E-mail -- Over 60
  • Internal Mode of Communication
  • By Hand -- Over 80
  • Phone -- Over 25
  • E-mail -- Over 10

12
Use of IT to enhance Internal Business Processes
Stage
Industry at a given stage
13
Use of IT to enhance External Business Processes
Stage
Industry at a given stage
14
Where the Companies in the Garment Industry are
in the E-Transformation Roadmap
Basic Website
External Processes
Interactive Site
External Business
E-Commerce Site
IT Sophistication
New Processes
Convergence
Most
Some
Effective Organisation
Effective Team
Internal Business
Internal Processes
Effective Individual
15
Convergence
16
Case Study Garment Manufacturing Company
Business Process Modelling
  • Business Processes
  • Customer Order Processing
  • Raw Material Purchasing
  • Pre-Production Planning
  • Resource Allocations
  • Production Process
  • Quality Assurance
  • Despatch Finished Goods
  • Sample Preparation
  • Inventory Control
  • Human Resource Develop.t.
  • Freight Forwarders handling
  • Accounts Receivable
  • Accounts Payable
  • Staff Recruitment
  • Payroll
  • Merchandising
  • E-Business Sys. Handling
  • Strategic Decision making
  • Marketing

17
Business Processes Re Engineering
Management Processes
Customer Satisfaction
Customer Request
Core Processes
Support Processes
18
E Transformation Methodology
Understanding the Global Change
Business Strategy
Responding to Change
Business Goals
Implementing the Change
Business Processes Workflow, Technology, People
Change Management
Business Process Re-engineering
Enhanced Using IT
19
E Transformation Process Considerations
  • Think Globally Act Locally- SWOT Analysis,
  • Competitor Analysis, PEST Analysis
  • ? Change Drivers (IT Driven/ Business Driven)
  • ? Make and Sell ? Sense and Respond
  • ? Develop Strategy (Differentiation/Cost
    Leadership)
  • ?Decide where the enterprise wants to go

Understanding the Global Change
  • Identify Critical Success Factors, Identify Key
  • Performance Indicators (KPIs),
  • ?Survival, Sustainability or Growth ?
  • B2B, B2C, CRM, SCM, ERP, MRP, etc.
  • Quality, Speed, Cost, Accuracy, Visibility, New
    Markets

Responding to Change
Implementing the Change
Identify the issues related to business processes
that make a direct impact on the Business goals
Deal with changes in Shared Values, Strategy,
Staff, Skills, Structure, Systems, Style
Identify What Process to Re-engineer How to
re-engineer to improve process Develop Action plan
Develop Technical Solutions Deal with Server,
Database, Software, Applications, hardware issues
20
How to E Transform ?
21
Competitive Strategies for the Industry
  • Backward Integration to creating a RM base
  • Differentiation Strategy (rather than Cost
    leadership)
  • Upgrade Technological and Technical Expertise
  • Massive Advertising Campaign for the SL Garments

Competitive Strategies for the Enterprises
  • Management of Lead Time and Increase Productivity
  • Maintain High Quality Standards
  • Introduce E-Business - Effective B2B B2C
    Business
  • systems (Eg. Order tracking Systems)
  • Improve the existing Internal Business Systems
  • Adapting to Quick Response Systems and the Sense
    and
  • Respond Approach

22
What E-Transformation should not be !
MRP
CRM
SCM
KM
ERP
E-Commerce
Web Site
23
The E-Transformation Approach
  • Big is beautiful Big Picture
  • Small is beautiful Smaller incremental changes
  • Change is constant Change is here to stay
  • Flexibility is the key Responsive, adaptable
    sys.
  • Knowledge is power Information accessibility
  • Customer is the king Improve relationships
  • Automation or Optimisation SCM, ERP, MRP
  • The Dot-Com era (error) Back End Systems
  • Cost / Benefit - Investment / Satisfaction
  • E-business is Business!

24
Thank You
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