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The Internal Analysis of strengths and weaknesses focuses on internal factors that gave Timken a certain advantages and disadvantages in meeting the needs of its target market. Strengths refer to core competencies that gave the firm an advantage in meeting the needs of its target markets. Weaknesses refer to any limitations that the company faces in developing or implementing a strategy. Also, from a customer perspective because customers often perceive weaknesses that a company cannot see. The following area analyses are used to look at all internal factors affecting Timken: Resources: Profitability, sales, product quality brand associations, existing overall brand, relative cost of this new product, employee capability, product portfolio analysis Capabilities: Goal: To identify internal strategic strengths, weaknesses, problems, constraints and uncertainties
Resources
Resources refer to factors that a company owns, controls and uses for the purpose of creating value. Timkens numerous tangible and intangible resources help to determine its distinctive competency, thus leading to maintaining a competitive advantage. When identifying Timkens resources, both its tangible and intangible assets are included. Tangible resources include assets that are financial in nature, or have physical properties. For the year ended 31st December 2009, Timken recorded a sales and operating cash flow of Rs. 31,836 Lakhs as part of its financial resources. In 2009, Timken recorded a sales and operating cash flow of $220.1 million, as part of its financial resources. Land, buildings, machinery, and equipment are also part of Timkens tangible resources, and are worth approximately $ 4,379.2 million (Timken, 2007). Intangible resources include those non-physical assets that the company uses to produce goods or provide services, or expects to generate future productive benefits. The Timken brand is considered one of the worlds most recognisable and trusted brands The Timken brand is associated with superior quality, innovation and style, in the minds of its customers. A major initiative taken to improve customer service in 2007 resulted with The Best Supplier Award from Mahindra & Mahindra. The new business model makes the inventory available at the four regional hubs, closer to most original equipment manufacturers. Also, the operations of picking from plant to delivery to customer have been outsourced to a single global logistics company. In an increasingly competitive world, Timken provides solutions that help customers reach their full potential. The customers turn to a trusted partner in solving their toughest friction management and power transmission challenges. And while providing products, services and technical support that help equipment perform better, customers rely on the brand for so much more like reducing operating costs and providing expertise that contributes to the bottom line. Timkens expertise spans the areas of friction management and power transmission. Their technical solutions and services make it possible for equipment to run harder,
faster and longer with enhanced durability and superior performance. They are experts in mechanical power transmission, antifriction bearing design, tribology, metallurgy, clean steel production, precision manufacturing, metrology, and engineered surfaces and coatings. Their $50-million investment in research and development activities in 2009 allowed them to grow their capabilities, expand product and service portfolio, and deliver value to the customers. Timkens plants and distribution centers received 100 quality certifications under ISO 9001, ISO/TS 16949, AS9100, M-1003, OHSAS18001 and other quality certifications.
Capabilities
Resources are not productive on their own. The most productive tasks require that resources collaborate closely together within teams. The term organizational capabilities are used to refer to a firms capacity for undertaking a particular productive activity. Our interest is not in capabilities per se, but in capabilities relative to other firms. To identify the firms capabilities we will use the functional classification approach. A functional classification identifies organizational capabilities in relation to each of the principal functional areas.
Timken has been a leader in the rail industry since the 1920s. Their focus on innovation, product development and process improvement uniquely positions the company to serve the needs of railroads, car builders and rail operators globally. They have established 13 technology centers, which employ skilled technicians, engineers and scientists to study all aspects of rail operations. This leads to continued innovation and improvements for increasingly demanding applications. Timken were successful in identifying their various markets and dominate them. They established themselves with variant products for below Industries. Around the world and in a variety of industries, customers improve their performance by turning to Timken. Our associates deliver value by working closely with customers to provide friction management and power transmission solutions that cater to their specific industry and applications.
Aerospace: Timken provides aerospace and defence customers with next-generation technologies for commercial and military applications.
Agriculture: Design engineers and farmers alike rely on Timken for reliable solutions in a wide range of demanding agriculture applications, from hay balers to combines.
Heavy
provides products and services to automakers that improve fuel economy, reduce emissions and improve vehicle performance.
&
Construction:
Timken products and services are utilized by OEM's and construction crews to enhance performance in earthmovers, bulldozers, cranes and more.
provides aggregate and cement equipment makers with bearings and related products and offers additional maintenance services to the aftermarket.
Coal, Consumer:
Timken
Oil
&
Gas:
products are used every day in appliances, recreational vehicles and many other consumer applications.
Energy & Power Generation Timken bearings steel and related technologies help improve performance in oil and gas drilling, wind energy and power plant applications.
Gear Drive: Timken steel, bearings and related components are utilized by power transmission and motion control suppliers to provide subsystems for the worlds major industries.
There are many other industries to be mentioned. This has been very motivating for both the organization and their business partners to coordinate and develop their market.
Timkens journey towards real options analysis began in 1996, when the corporation made the decision to focus on profitably growing the business by 10% by every year. However, when they started with their approach for the same, they identified various gaps which were more than the anticipated growth requirement. The identified gaps were: i. ii. iii. The lack of expertise in Project Management and Market Research. Poor defined and documented product and corporate strategies. Financial evaluation capabilities
The first group of gaps identified was addressed by recruiting various consulting firms to assist those disciplines. The financial evaluation gap was addressed over the following years, initially with the internal finance department. During this period, Monte Carlo stimulation was being used among the industries to determine various risks for projects. This risk simulator was then purchased by the corporation and was very useful for reviewing a high-profile project that contained hidden ranges of risks. It also broadened the view of the significant impact that strategic fit, selection and timing has with respect to financial success.
Another strategic capability of Timken is establishing joint-ventures. For e.g., Timken entered a joint venture with Xiangtan Electric Manufacturing Co. (XEMC), of China to build a $38-million plant in China to manufacture main shaft bearings for wind turbines. Timken will hold 80 percent of the venture, which will employ 110 people. By combining Timken's alloy steel expertise, power-transmission design and precision manufacturing capabilities with XEMC's leadership in heavy-equipment manufacturing in the Chinese market; the joint venture will be well-positioned to meet the needs of China's rapidly growing wind energy industry. To add more, back in 2002 Timken Company forms joint venture with Japan's Sanyo Special Steel Co. Ltd. and Showa Seiko Co. Ltd. to supply forged and machined rings for bearings.
Timkens is shaping up its MILLTEC Programme, under which it takes on the entire responsibility of performance of the rolling mills in steel plants - a unique concept to provide a complete package solution for bearing and roll-shop maintenance. It involves improvement in capacity utilisation through timely maintenance, minimising changeover and breakdown time thereby extending the life of bearings and equipment resulting in significant cost savings.The MillTec concept has been used by major steel manufacturers like Tata Steel, Essar and JSW. The company has chalked out plans to take the concept globally.
Production Process
Focusing on TIMKEN Products, the production process defined is almost similar across the product range. Focusing on the variant component types of bearings mentioned below:
Timken Indias production planning cycle defines the customer lead time from order to shipment varies from 0 to 105 days. With the implementation of Fast Response Process, the supply will be completed within the same day (24hrs) with subject to the availability of stock.
Procurement lead time is 0 to 45 days for rings and cages. Plant flow (from raw material to finished goods) takes on an average of 17 days. 45 days advance planning done firm plan. Green rings lead time < 45 days. Cages lead time < 45 days. Roller wire lead time is 140 days (production plan is met through RM stock).
To be highlighted, TIMKENs On Time Delivery (OTD) is quite high at 97%. Also, planning is a strong point for which 45 days advance planning means the forecast accuracy is good. OTD at 97% also shows that procurement accomplishment of RM, Spares, Consumables etc., is very high. On the other hand, to showcase the weakness of the supply chain management for TIMKEN; Steel, Cage and Wire Rod the three major raw material items are all from single source. Roller wire is imported. No local source is developed in the last ten years. Inventory turnover is 11.40 times which needs improvement.
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