Production core competences

Products Core competencies/core products End products sold by business units Common manufacturing processes Material sources... 

Eastman Kodak has identified 10 core competencies and developed a process for their management and utilization within the company (29). Similarly, Eaton Corporation selected seven core technical competencies, ranked them in importance, assessed their importance vs the known state-of-the-art for the industry, and developed action plans to extend the life of each (30). Eaton subsequently found the company could bring to market products designed with proven building blocks, thus minimizing risk and the need for additional capital equipment. In addition, the competencies were found to be reservoirs of proprietary advantage that had not previously been put to work. 

An example in point is Johnson Matthey, the world s largest supplier of opiates. The products are obtained by plant extraction, which is the company s core competence. JM acquired the chemical CRO PharmEco with the intent to offer a one-stop shop capability. As PharmEco was primarily involved in synthetic chemistry, it is difficult to come across a synergy between the small- and the large-scale business. 

Automobiltechnik Blau s core competence is the forming of metal parts. Main products are filling systems like caps of fuel tanks and oil tanks. Their... 

VOCs are the only chemicals the SME applies in larger quantities so that the application of the chemicals is not part of the user s core competencies. As the cleaning process has minor importance in the overall production process of the SME, the costs for the company to conduct research and development regarding the risks and efficient application of the chemicals are disproportionately high and the producer is probably the only source of information for the user. 

Rong (Ron) Liu has been in the pharmaceutical industry for 20 years, and is currently leading AustarPharma, a pharmaceutical company based at Edison, New Jersey. The core competence of the company is drug delivery technologies. Before his current role, Ron was employed at Bristol-Myers Squibb (BMS) as a director of global product development for more than 5 years. 

Achieving competitive production costs depends heavily on maintaining a clear focus on those core competences and products that will allow the company to build a distinctive position. This implies that the organizational setup should outsource all non-core functions, including in the portfolio only those production steps or products that show the required margin contribution. 

Integration, or Verbund as it is known in German, is a core competence at BASF. Byproducts or waste materials from one manufacturing process can in turn be used in another, increasing efficiency and cutting costs. The result is a highly sophisticated and flexible chain of production, where plants are effectively... 

Virtual companies are based on the premise that core competencies within chemical and pharmaceutical companies he in discovery research and not in development. There are many contract research and manufacturing companies who do have the necessary skills for the product development process and the job of the virtual company is to access these skills and then utilise them in an efficient way. The hub in which such a virtual pharmaceutical company operates is illustrated in Figure B9. 

An interesting combination occurs when exploitation is beyond the core competencies of the company and the sales of a particular product would be small. A theoretical example of such an occurrence in the electronic materials for displays area is illustrated below. 

The accidental discovery of products or processes by R D that are outside the core competencies of the company does happen. Often this is when it is least expected and exploitation on a reasonable time frame is impossible because it was unplanned. In these cases the assignment of a patent to another company much better equipped to develop the invention is a good option. 

If an organization can hx its position on the life cycle curve (S curve), and it has a sense of the slope of the curve, it has an excellent mechanism for determining where its technology is headed, and it can also determine the relative rapidity of that movement. Understanding this dynamic yields unique insights on how to direct product/service development and R D processes, as well as how to proactively align core competencies with new technology imperatives. 

Gradually partnerships were formed between life sciences and fine chemicals industries, the latter having resources to respond to the specific needs in terms of products and technologies. The relationship between life sciences and fine chemicals industries has evolved from a vendor-purchaser approach to a strategic partnership. There has been a much broader sharing of information, be it with respect to cost improvement programs or to commercial outlook for the product(s). Both partners focus their resources on their core competencies. 

In terms of focussing on core competencies, manufacturers of functional chemicals will no longer produce all the chemicals of their system solutions themselves in the future, but they will have to reduce their value-chain instead and partly restrict themselves to formulating bought-in molecules in a product system for customers application. 

Pharmaceutical companies have to be continuously vigilant and forecast the future directions of drug developments and regulatory requirements. They have to use their core competencies to deliver a pipeline of products to remain competitive and profitable in the long term. 

Syntex (now Roche Palo Alto) for example, once sold dental chairs, x-ray equipment, and hair care products. Many pharma companies were involved in cosmetics, agricultural chemicals, and veterinary products before deciding to focus once more on their core competency . 

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