The Dana Packaging Company has chosen a differentiation strategy. This is supported by the shift to producing packaging for high end products. These products require more technological sophistication and better materials for their packaging so as a result Dana is making their packaging more study, colorful, attractive, and better sealing. The other are that Dana has made it a point to differentiate is in their filling process. The packages are filled only at Dana-owned plants where they stress safety, cleanliness, and low cost to its customers in order to retain a high reputation in their quality of the filling process.
Question 2: Develop a value chain for Dana. What are its opportunities for cost reduction and/or value enhancement?
Value Chain for Dana Packaging Company
Production of pulp paper| Produced in Danas mills around the world. Some pulp material is purchased from recycling operators.
Opportunities for cost reduction and value enhancement
Danas opportunities for cost reduction include outsourcing some of the manufacturing to outside vendors, which would improve speed, timeliness and quality. Dana should contract out the pulp production process to recycling operators rather than using its own valuable resources to produce the pulp material. By doing this, the company could free-up plant space and labor resources that could then be utilized for more significant and value adding processes. With the pulp production being eliminated the company could reduce production costs by merging the paperboard production, coating and filling activities into one location rather than transporting the unfinished goods from plant to plant.
Keeping in alignment with its differentiation strategy and to enhance customer value, Dana needs to continually seek out new technologies to produce superior quality packaging materials. Dana should continue training and developing employees as well as upgrading plant equipment to produce smaller batches of high-end materials. Reducing setup time between batches will increase customer value by allowing for more cost efficient customization options. Additionally, Dana should continue quality improvement initiatives to maintain a high reputation for the quality of their filling process.
Question 3: Danas management is considering the use of a balanced scorecard for the firm. For each of the four areas within the balanced scorecard, list two or three examples of measurable critical success factors that should be included.
For the balanced scorecard for Dana, the following critical success factors should be used:
* Reduce Cost per Unit: Measurable by having a standard costing per each product and adhering to that
* Revenue Growth: Measurable by recording the percentage increase in sales for their new market
* Quality: Measured by doing quality checks and surveys with customers
* Price: Measured by monitoring sales
* Efficiency: Measurable by checking lead times between customer order and order fulfillment
* New Product Success: Measured by number of sales
Learning and Growth
* Manufacturing Learning: Measured by improving efficiency and quality over time
* Employee Skills: Measured by surveying and observing employees to make sure they understand the new systems and technology.