Clock speed

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Clockspeed: How companies can react quickly to market changes (original title: Clockspeed: Winning Industry Control in the Age of Temporary Advantage ) is the title of a book from 1998 by Charles H. Fine . The study deals with the regularities of power shifts within global supply chains . Furthermore, the development of industrial production concepts and the challenges of a sustainable balance of social, ecological and economic demands on the automotive industry are addressed.

The book is a preparation of the results of the third phase of the International Motor Vehicle Program (IMVP), the oldest and largest international research consortium for the automotive industry, intended for a broader, including non-specialist, readership . It was published a year after it was first published in other English editions as well as in German, Japanese, Dutch, Swedish and Spanish. Reviews were given in relevant specialist journals and conferences.

central message

According to Fine's statements, biologists often study the processes of life on the fruit fly . The reason is the extremely short life cycle of the species. Researchers could therefore follow the genetic development of hundreds of generations in a few years. Findings obtained there would then be transferred to research on longer-lived species such as humans. In his book, Fine suggests doing a similar search for strategic options for companies in the automotive industry, first locating the “fruit flies” of the economy and then learning from them.

As an analogy to life cycle in the human genetics he defined for the "business genetics" ( economic Genetics ) "Clock Speeds". He identifies the infotainment and computer industries as the fruit flies of the economy. The automotive industry, on the other hand, has a significantly lower clock speed, while aviation, for example, is one of the sectors with a slower clock speed.

As a thought experiment, Fine speculates about whether the power shift in the supply chain from the device manufacturer ( OEM ) to the suppliers Microsoft and Intel ("Intel Inside") that has occurred in the computer industry in the recent past (1998!) Is combined in view of the increasing value of electronics Auto won't develop into similar structures ( Bosch or Denso inside).

The main conclusions that he draws from considering the fruit fly infotainment are:

In the following, Fine presents instruments, for example

  • determine the integration trend of a supply chain,
  • To work out key competencies in it,
  • identify critical sections,

and draws the conclusion that the “traditional” concurrent engineering , consisting of the two dimensions of product and process, has to be expanded to include a third dimension: supply chain architecture to 3-DCE (dynamic three-dimensional concurrent engineering).

The considerations are explained using numerous case studies and finally extended to the public service and teaching institutions.

Structure and content

The book is divided into three parts, each of which is divided into three to five chapters.

Economic Genetics - What We Can Learn From Fruit Flies

Fine also defines the supply chains of companies as their competence chains and, in analogy to genetics, describes them as their “molecular structure”, whose mutations and evolutionary processes will be his focus in the following. The double helix forms for him a model of changing directions of integration in which large companies predominate with vertical dominance and dynamic and innovative corporate dinosaurs with horizontal dominance and where every run would leave corporal dinosaurs behind.

Supply Chain Design - The Ultimate Core Competency

Competitive advantages are shown as regularly temporary. This means that an enduring core competence is the ability to decide on the correct core competence in each case, which results from the position on the double helix. Depending on this, it could be, for example, the sales network, or brand management or product design. The competition is characterized by competing supply chains in which the respective company always only plays a limited role. The success is therefore for the companies, which can foresee again and again what the future decisive competencies in a supply chain will be.

Two principles can be observed for the dynamics in a supply chain:

  • The bullwhip effect , after fluctuations in demand towards the supplier build up along the chain and thus increase stocks as well
  • the clock speed, which increases in the opposite direction towards the customer.

The supply chain is analyzed in three components:

  • the organizational chain,
  • the technological supply chain and
  • the competence chain.

A strategic analysis must be based on all three.

Management strategies in the age of short-term competitive advantages - three-dimensional concurrent engineering (3-DCE)

In concurrent engineering , which Fine describes as classic , the product and the associated production process are largely developed coherently and in parallel. The consequence of thinking in terms of supply chains makes it clear, however, that the supply chain design is a necessary addition, which expands concurrent engineering to three-dimensional concurrent engineering.

Strategically, it should be determined which part of the supply chain the company wants to cover itself. Using the Clockspeed model, a four-step procedure for preparing this make-or-buy decision is developed:

  1. Benchmarking fruit flies,
  2. Mapping of your own supply chain according to organization, technology and competence
  3. dynamic analysis of the supply chain with the double helix
  4. Merging of 3-DCE and the competence development dynamics.

Epilogue: When fruit flies conquer the earth - The clock speeds of people and public institutions

Social systems and public institutions are also subject to the clock speed. In this chapter, Fine deals with the consequences of the acceleration of clock speeds observed in the economy for these areas and how they can be countered.

meaning

According to the WorldCat , by October 2010 over 70 authors had worked on the keyword “Clockspeed”. 34 books, 66 essays, 47 internet resources are shown. There are also 24 “dissertations”. Disregarding the typically increased reviews of the new publication, the reception of the text is initially cautious. It was not until 2004, five years after the publication, that the work based on it began to increase significantly. The book is apparently up to date until 2010, as the publications under the keyword continue unabated.

Fine work is now one of the basics of supply chain management and is also used in strategic management , viewed as the basis for rationalization projects and helps with controlling .

Investors are interested in the clock speed of individual industries and companies. So one tries to improve fine measuring methods and to specify the statement of the decreasing clock rate.

The proven, accelerating clock speeds are still a driver for developing new forms of innovation management . The so-called iPod syndrome , where Apple, the no-name in the market for mobile playback devices, quickly ousted Sony as the market leader, is a warning example.

literature

  • Charles Fine, Birgit Lamerz-Beckschäfer (translator): Clockspeed: how companies can react quickly to market changes. Hoffmann & Campe, Hamburg 1999, ISBN 3-455-11264-1 .
English original: Charles H. Fine: Clockspeed: winning industry control in the age of temporary advantage. Basic Books, New York 1998, ISBN 0-7382-0153-7 .

Further publications by the author on the subject

  • Charles H. Fine: Industry Clockspeed and Competency Chain Design: An Introductury Essay. In: DSpace @ MIT June 24, 1996 (PDF, read: September 26, 2010)
  • Charles H. Fine, Roger Vardan, Robert Pethick, Jamal El-Hout: Rapid-Response Capability in Value-Chain Design. In: MIT Sloan Management Review. 4, 2002, pp. 69-75 (PDF, read: September 26, 2010).
  • Charles H. Fine, Daniel MG Raff: Industry sudies: automobiles. In: Benn Steil, David G. Victor , Richard R. Nelson: Technological innovation and economic performance. Princeton Univ. Press, Princeton 2002, ISBN 0-691-09091-2 .
  • Charles H. Fine: Clockspeed-based strategies for supply chain design. In: Thomas W. Malone (Ed.): Inventing the organizations of the 21st century. MIT Press, Cambridge, Mass. 2003, ISBN 0-262-63273-X , pp. 205-217.
  • Michael S. Hopkins, Charles H. Fine: Collaborate or race? : how to design the value chain you need. In: MIT sloan management review. 51, 2, 2009, pp. 22-24.

Selection of secondary literature (by age)

  • Sucheta Nadkarni, Vadake K. Narayanan: Strategic schemas, strategic flexibility, and firm performance: the moderating role of industry clockspeed. In: Research Policy. 38, 1, 2009, pp. 58-76.
  • Bert Meijboom, Hans Voordijk, Henk Akkermans: The effect of industry clockspeed on supply chain co-ordination: classical theory to sharpen an emerging concept. In: Business process management journal. 13, 4, 2007, pp. 553-571.
  • Sucheta Nadkarni, Vadake K. Narayanan: The Evolution of Collective Strategy Frames in High and Low Velocity Industries. In: Organization Science. 18, 4, 2007, pp. 688-711.
  • Jarkko Vesa: Regulatory framework and industry clockspeed. In: Brigitte Preissl (Ed.): Governance of communication networks: connecting societies and markets with IT. Physica, Heidelberg 2006, ISBN 3-7908-1745-7 , pp. 79-90. (PDF, read: September 26, 2010; 231 kB)
  • Robert K. Perrons, Ken Platts: Outsourcing strategies for radical innovations: does industry clockspeed make a difference? In: Journal of Manufacturing Technology Management. 16, 8, 2005, pp. 842-863 (PDF, read: September 26, 2010).
  • Janice E. Carrillo: The impact of dynamic demand and dynamic net revenues on firm clockspeed. In: Christopher Deissenberg, Richard F. Hartl (eds.): Optimal control and dynamic games: applications in finance, management science and economics. Springer, Dordrecht 2005, ISBN 0-387-25804-3 , pp. 215-229.
  • Gunnar Holmberg: On aircraft development: managing flexible complex systems with long life cycles. Department of Mechanical Engineering, Linköping University, Linköping 2003, ISBN 91-7373-780-1 .
  • Tor Guimaraes, Dave Cook, Nat Natarajan: Exploring the Importance of Business Clockspeed as a Moderator for Determinants of Supplier Network Performance. In: Decision Sciences. 33, 4, 2002, pp. 629-644.

Individual evidence

  1. ↑ Fine ( Memento from June 18, 2010 in the web archive archive.today ) is Professor of Management at the MIT Sloan School of Management and was at the time the IMVP's “Codirector” was written.
  2. ↑ For example: Haim Mendelson, Ravindran R. Pillai: Clockspeed and Informational Response: Evidence from the Information Technology Industry. In: ISR - Information systems research. 9, 4, 1998, pp. 415-433.
    Nat R. Natarajan: Fruit Flies, Kitty Litter, and Supply Chains: A Review of Clockspeed: Winning Industry Control in the Age of Temporary Advantage. In: Production and inventory management journal. 40, 4, 1999, p. 55.
    Janice E. Carillo: Industry Clockspeed and Dynamics: Appropriate Pacing of New Product Development. In: DF Kocaoglu, TR Anderson: Portland international conference management of engineering and technology. IEEE; PICMET; 1999, p. 162.
  3. ↑ The process known as "simultaneous engineering" in British English, of developing a product and the associated production process at the same time, was only just attracting attention at the time the book was published.
  4. ↑ See review on bookpage.com ( Memento of the original from November 21, 2010 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. @1@ 2Template: Webachiv / IABot / www.bookpage.com
  5. ↑ Handelsblatt (Ed.): Handelsblatt Management Library. Volume 1: The best management books, AK. Campus, Frankfurt am Main 2005, ISBN 3-593-37816-7 , pp. 82-85.
  6. ↑ The topic only attracted more attention from management practice from 1994 onwards, as can be seen from the sudden increase in publications this year.
  7. ↑ See: WorldCat on the keyword Clockspeed , read on October 14, 2010.
  8. ↑ Kenneth Karel Boyer, Rohit Verma: Operations and Supply Chain Management for the 21st Century. South-Western, Mason (Ohio) 2010, ISBN 978-0-618-74933-1 .
  9. ↑ Ling Li: Supply chain management: concepts, techniques, and practices enhancing the value through collaboration. World Scientific, Hackensack (NJ) 2007, ISBN 978-981-270-072-8 .
  10. ↑ Werner Delfmann, Thorsten Klaas-Wissing: Supply chain design: theory, concepts and applications. Kölner Wiss.-Verlag, Cologne 2007, ISBN 978-3-937404-10-3 .
  11. ^ Bob Paladino: Five Key Principles of Corporate Performance Management. Wiley, New York 2007, ISBN 978-0-470-00991-8 .
  12. ↑ Thomas Liebetruth: The information basis of supply chain controlling: state of research, empirical analysis, design recommendations. Kölner Wiss.-Verlag, Cologne 2005, ISBN 3-937404-12-0 .
  13. ↑ Michael J. Mauboussin: More than you think: Financial knowledge where you don't suspect it. FinanzBook-Verlag, Munich 2009, ISBN 978-3-89879-315-5 , p. 143.
  14. ↑ Oliver Gassmann: Business Excellence through Innovation. In: Christian Marxt, Fredrik Hacklin (Ed.): Business Excellence in Technology- Oriented Companies. Springer, Berlin 2009, ISBN 978-3-540-73880-0 , pp. 2-12.