companies heavily invested on structural prerequisites to enhance their
operation. Based on nature, these investments can be categorized under o4
areas. Such as,
An emphasis on continuous improvement
throughout the organization
Investment in research and development
The adoption of advanced product,
process, and organizational / managerial technology
The integration and coordination of
activities through the value chain
to the given scenario can be summarized details as follows.
An emphasis on
continuous improvement throughout the organization
improvements mean that continually makes small changes within an organization.
Small changes provide a road map to massive changes. This concept is
universally known as Kaizen. Kaizen is the secret behind the success of
management had introduced Kaizen principles to all levels of the firm. They
arranged corrective- action groups to deal with numerous interior issues with
quality. These groups consist with lower level employees, a process improvement
specialist and managers. And also 200 suppliers and 500 customer action groups
were created in that period. As a result of the above changes, Milliken able to
achieved 60% drop in the cost of nonconformance. And also reduce the percentage
of the number of off-quality discounts and customer returns. As well as on time
deliveries improved from 75% to 99%.
to above advantages,
Milliken achieved a high market share
Retain customer for long periods of
Increased customer loyalty
Generated competitive advantages through
low price and high quality
Investment in research
current practice Milliken allocated 2% of sales revenue, for research and
development (R&D) activities. R&D is the best way to achieve
innovations. Milliken is developing
their own machineries to save proprietary technology within the firm. Research
and development activities provide a lot of advantages for Milliken. Such as,
Can generate competitive advantages over
Can enter new markets with new products
Can stimulate employees
Can enhance product quality while
minimizing production cost
The adoption of
advanced product, process, and organizational / managerial technology
operators faced a lot of unexpected downtime on the machine. In previously Milliken
used mechanic staff to repair breakdowns. Problem was they have taken long
hours to repair machines. As a result of that increased ideal time of machine
operators. To overcome this issue introduced an automated system to repair and
maintenance. Through this system they obtained below mentioned advantages.
Speed up their production process while
minimizing human intervention
Decreased ideal time of machine
Respond and deliver customer orders on time
Milliken had adapted to the advanced
technologies to survive in the market. Management introduced new looms to the
decorative fabrics business unit. That looms can run at a high cycle rates.
This is caused to improved amount of lineal feet of fabric woven per loom hour.
As a result of that Milliken has enabled to cut the minimum efficient length of
run. Milliken can function beneficially on short run due to high cycle rate.
And also it was caused to increase operational flexibility and responsiveness.
Now Milliken can carry out production run in a shorter period of time than
fabric business unit waste time can be minimized by reducing the design cycle
time. To achieve above target management introduced a computer aided design
system (CAD) to the decorative fabrics business unit. It generated following
It saves time of designers
Incurred low cost to design process
Eliminated manual drafting
Product can be designed quickly
Provided high accuracy
Reduced cycle time
Can easily carry out modifications and
The integration and
coordination of activities through the value chain
are two methods to save customers and create value through the value chain.
promotion campaign to attract customers
to sell firm’s product to customer
is the traditional method of manufacturing products. In here did not concern
about needs and want of customer. Firms produce products based on their
system differs from push system. It has many steps. Such as,
market survives to determine customer need and wants
on that design product
demand for the product
material and labour requirements for production
is the newest way of manufacturing products. Under this method manufacture do
not allocate more money on promotions. There is no risk in the market.
Manufacture can sell their product easily without any extra effort. Milliken
moved from a push system to pull system. It generated more value to Milliken.
Increased employee involvement on both
product design and manufacturing
Reduced the work in progress in inventory
Provide a basis for continuous
Generated more cash flows
addition to management taken action to eliminate limited value added activities
in the value chain. Example: removed management position of the organizational
got support from their key suppliers and customers for new product development.
Suppliers know how to minimize costs through material handling. Customers know
what type of product features satisfy their needs and wants. Suppliers and customers ideas helpful to the generate