The Family and Medical Leave Act (FMLA) of 1993 was introduced to allow employees to take up to 12 weeks of leave a year to provide care to their families as well as themselves. To be eligible, the employee must have worked for the company for a minimum of a year and have worked at least 1,250 hours. Companies who have at least 50 employees within 75 miles of their location must adhere to FMLA regulations. A similar law, the Americans with Disabilities Act (ADA) is sometimes confused with the regulations of FMLA. It is important that companies know the differences of each law to ensure that they are abiding by the correct regulation. Although America provides FMLA, it is one of three countries that do not provide paid leave. America has fallen behind other countries around the world for providing time for employees to take care for their family matters.

The Family and Medical Leave Act of 1993

The Family and Medical Leave Act (FMLA) of 1993 was created to the response of needs in the workforce whose demographics had changed. The prevailing demographic shift was the incursion of women into the workforce that incorporated women from childbearing to mothers of all ages. An additional concern was the aging of the workforce. The post World War II baby-boomer population was aging, so the subjects of disability leaves, medical expenditures, and insurance coverage had become a growing concern. Furthermore, there was a mounting national concern about work and family. The Act was thought to be needed to shield workers from losing their jobs when they wanted time off to address family problems as needed (Lewis, 2004).

The Family and Medical Leave Act has been a topic of vast discussions since the legislation was first introduced. Many corporations have been anxious that the law would cause them excessive manpower and financial hardship to remain in compliance. A dialogue on the history, regulations, and impact of FMLA will be presented.

History

The Family and Medical Leave Act of 1993 is a Federal Law that endured eight years of congressional debates, 13 votes and two presidential vetoes before it was finally declared a law. The Act first emerged during the Ronald Regan years in 1985 and was introduced as the Parental and Disability Leave Act. This legislation was proposed by United States Representative Pat Schroeder, a democrat from Colorado. Schroeder’s intentions were to allow parents of seriously ill children to take leave from work to care for them without the threat of losing their jobs. Under this proposal, parents were permitted to take 18 weeks of leave in a two-year time frame to take care of their ailing, newly adopted or newborn children. Additionally, under the rules, parents were additionally allowed 26 weeks in which they could return to work part time while continuing care of their children. The employee’s benefits were to continue during leave and they were to return to their previous job duties without penalty (Wimberly & Lawson, 1996).

The bill was modified in 1986 to include the authorization of leave for the care of the employee’s sick parents as well. The bill was renamed to the Family Medical Leave Act to signify the change. The new proposal provided 26 weeks of leave in a two-year period to cover the employees own illnesses and up two 18 weeks designated to take care of a family member. The bill continued to be modified during the Regan administration but faced fierce opposition by corporations and could not muster support by the President. During the remainder of the Regan years, the legislation never made its way to the House floor (Wimberly & Lawson, 1996).

During the early years of the George Herbert Walker Bush administration, democrats continued to compromise with republicans to produce a bill that was acceptable for congress. In 1990, congress had agreed upon a family leave act that would oblige employers with 50 or more employees to grant up to 12 weeks of unpaid leave based on family medical needs. Although the bill was passed through congress, the Act was immediately vetoed by President Bush on June 29, 1990 (Wimberly & Lawson, 1996).

Congress continued to team to pass a similar bill in 1992. President Bush again vetoed the bill on September 22, 1992. The senate struck back by overriding the Presidential veto while the House of Representatives voted to support the president’s position (Wimberly & Lawson, 1996). President Bush’s justification for his use of the veto was centered on his apprehensions on implementing federal leave policies on an already delicate competitive world economy. He offered to endorse an alterative family leave incentive that he had previously proposed (Bush, 1992).

Bush (1992) wrote:
America faces its stiffest economic competition in history. If our Nation is to succeed in an increasingly complex and competitive global marketplace, we must have the flexibility in our workplaces to meet this challenge. We must ensure that Federal policies do not stifle the creation of new jobs or result in the elimination of existing jobs. The Administration is committed to policies that create and preserve jobs throughout the economy — serving the most fundamental need of working families. (p.1)

The third attempt by congress to pass the Act was in 1993 when Bill Clinton was president. Unlike his predecessor, Clinton supported the bill. The bill was signed by the president into law on February 5, 1993. The Family and Medical Leave Act of 1993 became enforceable on August 5, 1993 (Wimberly & Lawson, 1996).

FMLA Overview

The Family and Medical Leave Act (FMLA) of 1993 provide eligible employees with up to 12 weeks of unpaid, job-secure leave per year. The FMLA allows working Americans to take responsibility for family life outside by allowing a reasonable period of unpaid leave time for certain medical and family reasons. Under the FMLA the employee will maintain employer health care coverage as if the employee were still working and not taking leave (Wimberly & Lawson, 1996).

Eligibility

For an employee to be covered under the FMLA they must work for an employer that has 50 or more employees within 75 miles of the location of the business. Employee eligibility is determined by the number of hours and length of time that the employee has put in with their current employer. An employee must have worked at least 12 months for the current employer and have at least 1,250 hours worked within a 12-month period (Employment Law Information Network, 2004).

There are exceptions to the rule where 50 or more employees are required to be covered by FMLA. All federal, state, and local government organizations must permit employees to be able to use FMLA regardless of how many employees are within the organization. Public schools and other public education institutions must also offer FMLA leave to employees (Employment Law Information Network, 2004).
The FMLA allows up to 12 weeks of leave for the following situations (Employment Law Information Network, 2004):

1. Care of spouse, child, or parent with a serious health condition.
2. Employee’s own serious health condition
3. Birth of a child and care for the child within the first year after birth
4. Adoption of a child and care for the child within the first year of adoption

A spouse is identified by FMLA as a significant other that is legally married according to the laws of the employee’s state. Common law marriages recognized by the state are also applicable under FMLA. This can also be interpreted as same sex partnerships in some states. A parent is defined as the genetic parent of an employee or someone who was the custodian of the employee when they were a child. This includes grandparents or any other person that may have raised the employee in the absences of their biological parents. An in-law is not considered a parent and not covered by FMLA (Wimberly & Lawson, 1996).

Children are designated as biological children of the employee, adopted children, step children, or children in legal custody that are under the age of 18 or over 18 with a disability. The mother and father of an expected birth of a child can also qualify for FMLA. The leave may be granted before the birth of the child and after the birth of the child to provide care. Additionally, the mother may take intermittent time off for any pregnancy complications that have been documented by the health provider. Likewise, parents are eligible to take leave in the first year of an adoption of a child into the home and during the process of such an adoption. Leave may also be taken intermittently as needed as the procedure of adopting my require employees to be away from work. The employee may take leave for their own serious health condition if it renders the employee unable to perform their duties according to their job position under FMLA regulations (Wimberly & Lawson, 1996).

Additional qualifications

The definition of a serious health condition is laid out in FMLA regulations. Serious heath conditions are described as illnesses, injuries, impairments or any other physical or psychological condition that requires assistance or suppresses a person from a functional lifestyle. This includes the care needed after a major operation or medical conditions that are under the direct supervision of a physician where the individual would not rehabilitate without care. Serious health conditions are also a condition where consecutive three days or more are required for care. Pregnancies are considered a serious illness when prenatal care is needed. Treatments for substance abuse are also covered under FMLA. This includes treatments for the employee or a spouse or parent who may need support (Wimberly & Lawson, 1996).

The employer has the right to call for the necessary certification statements from the health care provider that will supply the justification required within the boundaries of FMLA. Heath care providers include medical doctors of medicine, dentists, psychologists, and optometrists that are currently practicing their respective occupation. Nurse practitioners and midwives that are authorized by law are also considered authorized health care providers if they are making recommendations within the prenatal spectrum (Wimberly & Lawson, 1996). Health care providers that are recognized by the company or the company’s health plan are also eligible under the law. Authorized providers are extended beyond the United States and include any health provider that is legally recognized and practicing in their residing country (AFSCME, 1998). Finally, Christian Science practitioners who are authorized by the First Church of Christian Science in Boston, Massachusetts are also considered legal providers (Wimberly & Lawson, 1996).

Employer Rights and Responsibilities

The employer has the right to be given 30 days notice from the employee of any FMLA leave that may be anticipated. In the account that the necessity for leave is not foreseeable, then the employee must notify the employer as soon as possible. The employer may also call for reasonable updates from the employee of their intentions to return to work. Furthermore, in the case that employee is taking time off because of their health; the employer may request certification from the heath provider that the employee is fit to return to work (Employment Law Information Network, 2004).

The employer may also designate their definition of a 12-month period. There are four allowable ways that an employer can define this period. The first allows a company can use is the calendar year which is defined as January through December. An employer can also use a set 12-month period from the date that the employee started with the organization. The third alternative a company may use is to start the 12-month period from the first day that the employee initially used FMLA leave. The final option for an employer is to calculate the 12-month period backwards from the day the employee first used FMLA leave. The employer may switch between the four options available to accommodate the needs of the company. To do so, the employer must give a minimum of a 60-day notice before executing the change. Employees remaining leave time must be calculated to correctly transpose to the new timeframe (Wimberly & Lawson, 1996).

The employer has the option to deplete FMLA leave for each day that the employee receives paid medical time off such as short-term disability. However, an employer must not charge FMLA leave during such periods where a compulsory or forced plant shutdown is in effect. Leave may continue to be charged at the end of the shutdown (Wimberly & Lawson, 1996).

The employer may also exercise the right to limit married couples to a combined 12 weeks leave that is designated for a birth when both members work for the same company. This regulation applies regardless if the couples are working at the same location or otherwise. This holds true when adoptions are the reason for leave. Each individual spouse is entitled to their remainder of FMLA leave for additional reasons (Wimberly & Lawson, 1996).

The employer may call for that all accumulated paid time off be used as a part or the full 12 week of employee leave, making the 12 weeks of FMLA the bare minimum amount of time that an employer may offer for leave. The employer must allocate the leave permitted to the employee as FMLA leave to protect the rights of both the employee and employer (Schmidt, 2001).

During the employees leave under the FMLA the employer must retain the group health care coverage under the identical circumstances as if the employee were still working and not on leave. Furthermore, included to protect the employee’s rights is the restoration of the employee to their former job or one that is of similar status. Employers must not retaliate against an employee in any fashion for using their FMLA leave. Employers can not claim that allowing FLMA leave to an employee will cause undue hardship for the company (Schmidt, 2001).

The United States Department of Labor mandates that all employers retain and present the Family and Medical Leave Act Poster (WH 1420) in a noticeable place where employees and candidates for employment can examine it. This poster encapsulates the major requirements of FMLA and informing employees how to register a complaint. This poster should be displayed at all locations although there may not be any any eligible employees (Department of Labor, 2003).

Employee Protection

The Family Medical Leave Act is enforced by the Wage and Hour Division of the U.S. Department of Labor. Employees who may have a claim that their company may have violated FMLA regulations may contact the agency directly. Employees are not required to exhaust their employer’s complaint system to file a complaint. Employees have two years after the alleged violation to file and complaint and three years if it was a willful violation. A private lawsuit can also be filed to recover damages (AFSCME, 1998). The following damages can be recovered by the employee if a violation is found (Employment Law Information Network, 2004):

• Back pay, in which is comprised of wages, salary, and benefits that were lost during the time frame of inequity.
• Monetary losses, these are the tangible losses incurred as a direct consequence of the violation. This includes the expenditures of providing care up to 12 weeks of wages.
• Liquated damages, which is equal to the sum of lost wages plus interest. These damages may be reduced or abolished if the employer can demonstrate that they acted in good faith.
• Attorney fees can be recovered by the employee.
• Injunctive relief, this is where the employer has practiced deliberate unwarranted actions to discriminate against the employee. The employee can be restored to their pervious job and the company is barred against any retaliation against the worker.

Americans with Disabilities Act

There is a similar law that originations must be aware of that protects disabled workers. This law is known as the Americans with Disabilities Act (ADA). Companies must be aware of the similarities and differences between FMLA and ADA to determine which circumstances follow the correct legislation (Schmidt, 2001).

Title I of the Americans with Disabilities Act became in effect on July 26, 1992. ADA prohibits discrimination against people with disabilities in employment and defines certain rights of disabled workers in the workplace. Unlike the FMLA, ADA is a civil rights statue that safeguards disabled employees from prejudice from acquiring and sustaining employment and forces employers to make reasonable accommodations to the qualified employee (Schmidt, 2001). Employers must be aware that ADA not only covers protects current employees as with FMLA but potential employees that are applying for employment (State of Florida, 2003). ADA is not restricted to offering leave time as with FMLA but offers supplementary safeguards. ADA mandates that employers that have 15 or more employees for each working day in each of 20 or more calendar weeks in the current or previous calendar year be subject to the law (Schmidt, 2001).

An individual qualifies for ADA if she or he has a physical or psychological impairment that significantly limits one or more of that individual’s life functions. This also includes anyone who has a documented history of such impairments. Additionally, individuals are qualified if they are considered to have an impairment. Pregnancies and temporary impairments are not included in the scope of ADA (State of Florida, 2003).

To initiate the process, an employee must inform their company that they need an accommodation (State of Florida, 2003). ADA requires the employer to actively engage to provide accommodations to the approved worker. Additionally, ADA contrasts with FMLA in the following ways (Schmidt, 2001):

• ADA provides the eligible worker with an unlimited amount of obligatory leave time when it is an accommodation.
• ADA does not require a minimum number of hours or months as a stipulation for eligibility.
• ADA covers the employee only and is not intended to cover the workers family members.
• Employee may return to work beyond the 12 weeks designated by FMLA and must be reinstated to the same or similar position and salary.
• Under ADA, the employer is not required to preserve employee’s benefits during approved leave.

In dissimilarity to the FMLA, the ADA provides an undue hardship defense for the employer. If the employer can establish that providing exceptionally expensive accommodations to the employee would be detrimental to the finances or operations of the company, the employer may not be required to perform these accommodations (Schmidt, 2001).

An employer can not make an individual undergo a medial examination before an offer is made to the employee concerning a position. However, an employer can declare that the offer is conditional on the results of the tests if the same standard is held for all employees in that position. Current employees can be asked to take a medical exam to determine if they can perform the vital duties of the position. Medical exam can also be used to determine if the employee needs the accommodations that are requested (State of Florida, 2003).

FMLA Cases

Congress enacted the Family Medical Leave Act to balance employees’ home life and workplace demands. But the often-burdensome regulations of FMLA have led to litigations through our judicial system. During 2003, 39,425 FMLA cases were concluded resulting in $212,537,554 in back wages paid to employees and $9,993,041 in civil penalties assessed to companies (Department of Labor, 2004).

There is one lawsuit that has been the focus of much debate. In 2002, Ragsdale v. World Wide Wolverine was decided by the Supreme Court. The case is presented as follows (Cornell University, 2003).

The company, World Wide Wolverine approved Tracy Ragsdale for 30 consecutive weeks of leave for cancer treatments under the Wolverine leave policy. At the end of seven months of leave, Tracy Ragsdale asked for an extra 30 days or part time work under FMLA. Her request was denied. When Ragsdale did not come back to work after her initial leave request she was terminated (Cornell University, 2003).

Ragsdale filed a lawsuit, insisting that Wolverine in no way informed her that her 30 weeks of leave would be designated as FMLA. She insisted that she was entitled to an additional 12 weeks under the Department of Labor regulation 29 C.F.R. 825.700(a) (Cornell University, 2003).

The Ragsdale argument was eventually listened to by the United States Supreme Court and determined on March 19, 2002, under an infringement of FMLA. The Supreme Court rejected the argument by Ragsdale maintaining that the penalty provision that permits employees’ additional leave when employers fail to inform employees their leave would be designated as FMLA, was unfounded. The court established that company did fail to inform Ragsdale in advance that her leave would be considered as FMLA and their verdict sustains the rule that employers must continue to follow the obligation of notification. Furthermore, the Supreme Court evaluated all statutory penalties concerned in the Department of Labor’s guidelines for providing individual notice and resolved that this penalty was disproportional to the original intentions of Congress. The court regarded that Ragsdale’s serious medical circumstance would have kept her from returning to her job whether or not she was informed of the FMLA entitlement. It was left for interpretation that in other cases the up-front notice may weigh in how an employee would decide to control their rights in taking the leave (Cornell University, 2003).

The Supreme Court decision does not impede or overturn the individual notice obligation from the United States Department of Labor. Furthermore, the judgment does not amend any of the FMLA statutes. However, it succeeds to place in doubt the issue of automatic penalties for any originations who fails to abide by the regulation in question. This ruling grants an employer who inadvertently breach a Department of Labor directive for FMLA guidelines, a chance to sustain their argument without any additional fines or consequences (Brown, Mero, & Robinson, 2003).

Statistics

In 2000, the U.S. Department of Labor performed a survey that was sent to various employers and employees. The survey was focused on the impact and opinion of the then close to decade old FMLA law. From 1993 to 2000, over 35 million covered and eligible personnel took advantage from exercising leave for family and medical reasons (FMLA Survey and Information., 2002).

The assessment suggested that more than 80 percent of eligible employers, the Act had a positive effect, or no evident effect, on business efficiency, profitability, or growth. This contrasts with the companies’ initial beliefs when the Act was originally presented to the public. Moreover, two-thirds of eligible employers stated that, overall, conforming to the Act was very or somewhat effortless (FMLA Survey and Information., 2002).

The survey further revealed that more than four in five employees in the study agreed that every worker should have up to 12 weeks of unpaid leave in a year for family and medical troubles. Despite this, the reality is that more than half of the workers who received family or medical leave were anxious about having sufficient money to pay their bills. This may clarify why 88% of those who wanted time off but did not use it stated that they would have taken FMLA leave if they could have received some compensation during their leave (FMLA Survey and Information., 2002).

It is projected that 40% of workers expect to need family leave within the next five years. This may lead to pleads to amend the FMLA regulations to accommodate the requests of workers. The survey suggested that Americans endorse the expansion of Unemployment Insurance (UI) or Temporary Disability Insurance (TDI) to supply paid family and medical leave. 79 percent of Americans favor supplying family leave insurance through expanding UI or TDI (FMLA Survey and Information., 2002).

Conclusion

In this fast-paced modern world, daily demands of careers have taken time away from parent’s duties of raising a traditional family. Despite the initial resistance to the Family Medical Leave Act by corporations and politicians, this law is now considered an important step to protect the value placed on a family. However, this should be viewed only as one small step to protect families in the United States.

Out of 158 countries around the globe, 130 have leave policies for parents, of which 98 percent have paid leave. Merely three, the United States, Ethiopia and Australia, present unpaid leave. The question if the United States will ever supply any paid leave does not to seem to be expected soon (FMLA Survey and Information., 2002). Nevertheless, as the world seems to place importance on the significance of family, Congress may possibly have to mull over strengthening current FMLA regulations or establishing new laws to keep in tempo with the remainder of the world governments.

As the leader of the world, America should be assertive in being the world leader in family values as well. This country should set the standards for the world to follow our footsteps instead of lagging behind the rest of the world. America should continue to improve measures to protect families while finding a balance with our careers.

References

AFSCME (1998). Afscme guide to the family and medical leave act: Questions & answers. Retrieved July 19, 2004 from http://www.afscme.org/wrkplace/fmla.htm
Brown, J. A., Mero, N. P. & Robinson, R. K. (March 2003). Employer penalties for failure to provide individual employee notification under the family and medical leave act: “Clarifications” following ragsdale v. wolverine worldwide, inc. Employee Responsibilities and Rights Journal. 15(1). p. 11.     New York. Retrieved on July 15, 2004 from ProQuest.
Bush, G.W. (1992). Message to the senate returning without approval the family and medical leave act of 1992. Retrieved July 8, 2004 from http://bushlibrary.tamu.edu/research/papers/1992/92092206.html
Cornell University (2003). Ragsdale v. wolverine world wide, inc. (00-6029). Retrieved July 18, 2004 from http://supct.law.cornell.edu/supct/search/display.html?terms=administrative&url=/supct/html/00-6029.ZS.html
Employment Law Information Network (2004). Fmla Summary. Retrieved July 5, 2004 from http://www.elinfonet.com/FMLAsum.php
FMLA Survey and Information Web Site (2002). Fmla statistics. Retrieved July 8, 2004 from http://www.familyleavesurvey.homestead.com/FMLAStats.html
Lewis, G. (2004). Violence at work: Causes and protection. Retrieved July 18, 2004 from http://www.geraldlewis.com/chapter%20draft.htm
Schmidt, M. (2001). Employee leaves of absence: Overlapping and conflicting requirements. Retrieved July 4, 2004 from http://www.fbwhlaw.com/docs/Interplay Between FMLA and ADA.pdf
State of Florida (2003). Comparison of ada and fmla. Retrieved July 20, 2004 from http://www.state.fl.us/dms/hrm/leave/fmla_ada.html
U.S. Department of Labor (2003). Family and medical leave act (fmla) poster. Retrieved July 15, 2004 from http://www.dol.gov/esa/regs/compliance/posters/fmla.htm
U.S. Department of Labor (2004). Wage and hour division enforcement in fiscal year 2003 at ten-year high. Retrieved July 16, 2004 from http://www.dol.gov/esa/whd/statistics/200318.htm
Wimberly & Lawson (1996). The family and medical leave act of 1993: A practical guide for human resources professionals. Retrieved July 8, 2004 from http://www.wimlaw.com/fmla.htm

The post The Family and Medical Leave Act of 1993 appeared first on Michael A. Hartmann.

Abstract

Sam Walton is best known for being the founder of Wal-Mart, the most successful retail outlet in the world. Sam Walton was able to provide leadership to transform his innovative concepts into a revolution within the industry. Even after his death in 1992, his legacy continues to inspire other leaders who would like to enjoy the same success. Leaders can study Sam Walton’s leadership skills and use them as a model to sharpen their own skills.

The Leadership of Sam Walton

Introduction

Exceptional leadership is a critical factor in making any organization successful. An individual that is a true leader will be able to take a company to a place they wouldn’t go to by themselves by providing vision, direction, and passion. Sam Walton is acknowledged as one of the few leaders in the 20th century who built an entrepreneurial empire based on his own vast array of leadership expertise. An introduction to the various distinct leadership roles will be presented in addition to an examination of the prevalent leadership roles that Sam Walton possessed.

The Competing Values Framework

Leadership Roles

The Competing Values Framework consists of eight distinct roles that leaders perform in an organization. Each role consists of different attributes that belong to an individual leader that will demonstrate their function in the organization. This model and framework is created to provide assistance in recognizing organizational dynamics and notions concerning the rationale and structure of work, interactions among workers, and decision-making functions. The eight roles are the mentor, facilitator, monitor, coordinator, director, producer, broker, and innovator (Quinn, Faerman, Thompson, & McGrath, 2003).

The Mentor

A mentor is a leader that holds a wealth of experience and is a trusted advisor (Jewell, 2001). An individual who retains mentor traits will be characterized by being a caring and kindhearted leader. A manager who is a mentor will focus on building on open and fair relationship with his subordinates as each one of them was a protégé. A mentor will take the time to listen to an employee’s concerns and will extend his/her help whenever possible. Mentors recognize that people are essential resources that can be continually cultivated. The mentor role can also be described as the human concerned role because of the focus on human relations (Quinn et al., 2003).

For a mentor to be successful, they must have a comprehensive understanding of themselves and others. Mentors ought to learn the strong and weak characteristics of each employee. With this knowledge, a mentor can allocate tasks to individuals that would exploit their strong abilities to better serve the organization. A mentor may also elect to introduce tasks that focus on weaknesses and help them grow and broaden their skills. Additionally, a mentor will be familiar with their personal strengths and weakness. These strengths can be passed on to the individuals that are under their guidance (Quinn et al., 2003).

A good mentor will have the capability to influence behavior of others and replicate valuable skills to subordinates. Mentors can help mold potential leaders and inspire them to follow in their footsteps. Not only does this improve the leadership skills of others, but it causes the mentor to be a more valuable asset to the organization. Many companies with strong leadership can trace their expertise and values back to a single leader who mentored others. A single leader can transfer their attributes to others that in turn, can be passed down through the future generations to come (Maxwell, 1998).

The Facilitator

The facilitator role is a human relations role as well. Like the mentor, the facilitator is proficient in their listening skills, is kindhearted towards others and is sensitive to the concerns of others. While a mentor may focus on individual development primarily on a one on one basis, a facilitator will focus their attentions to providing cohesion within a group (Quinn et al., 2003). Facilitators will skillfully expedite the needs of a group to build a model working team environment (Jewell, 2001).

The facilitator themselves, must be a team player and be able to put together an efficient team that is dedicated to a shared objective or purpose. Team members must be given clear roles that can mutually support each other. Additionally, teams must be able to effectively communicate among each other and possess a sense of responsibility. Successful facilitators will listen to the input from team members to make certain decisions. At times where there mat be conflict within the team, a facilitator must be able to take the steps to help resolve any issues that may arise (Quinn et al., 2003).

The Monitor

A monitor can be described as a person that exams or alerts others about an operation or circumstance. A monitor can further be depicted as a watchdog, auditor, observer, overseer, or guardian (Jewell, 2001). Monitors may be spotted in the workplace looking over employee’s shoulders and gauging how procedures are being adhered to (Quinn et al., 2003).

A manager that assumes the monitor role would need to be very familiar with organizational procedures and be able to consistently notice any discrepancies in the organization. Not only should this person be able to identify any problems, they must be able to set an example for others to follow. Although a monitor may not be the most popular individual in the organization, they are an immense value to the company to ensure that consistency and quality are maintained (Quinn et al., 2003).

The Coordinator

A coordinator will cause a team to work together efficiently (Jewell, 2001). In this role, a manager will be able to delegate tasks to the appropriate personnel to obtain maximum efficiency. A coordinator must be able to ensure that different groups are operating together in harmony. As one group finishes their part of a process, the next group should be able to continue with the next step of the process smoothly under the direction of the coordinator (Quinn et al., 2003).

The Director

A director is a person who directs or controls something. A leader that possesses the traits of a director may be portrayed as a guide, leader, commander, or an executive (Jewell, 2001). A director may be the driving force behind the direction and strategy of the organization. They will have the skills to develop well thought out policies and tactics. A director who is effective leader will be able to fascinate an audience and clearly convey concepts. They will be able to set goals and objectives for an organization to concentrate on. As dynamics may change in the business atmosphere, they must be able to quickly react to those changes by amending these ambitions.  Additionally, directors must devise and organize company structures (Quinn et al., 2003).

Leaders who assume the director’s role need to possess the respect of others. Followers must be able to be drawn to the leader and believe in their leadership. This charismatic magnetism is needed to attract new followers or strengthen the loyalty of those who already are devoted to the leader. Individuals are attracted to strong and competent leaders with a clear vision for success (Maxwell, 1998).

The Producer

A producer is a person who can competently compose or generate something. They can cause something to come about by organizing and supervising a task (Jewell, 2001). A producer can be described as a motivated, empowered, and committed person. Producers can be distinguished from directors because producer roles require that the leader to be able to achieve and maintain a balance between driving for effort and productivity and overall wellbeing and effectiveness. A producer will ensure that their group is productive and performing at peak performance. However, the same time the producer must be able to cultivate a positive work environment that rewards employees that perform well. Well constructed incentive systems will covey an optimistic message to workers that will aid in building loyalty and motivation with each worker. Finally, a producer must be able to effectively manage time and stress while focusing on the daily demands of productivity (Quinn et al., 2003).

As a producer, a leader must not be afraid to empower followers. Many leaders make the mistake of closing their minds to ideas from those who serve them. Leaders may also be reluctant to offer responsibilities to those who may be able to efficiently execute them in proxy for the leader. In these cases, the lead may be concerned that subordinates may be put in the spot light instead of themselves. Some may feel threatened that they are encouraging others to take over their positions if results are superior to what the leader can do. However, empowering others renders others to view their leader with more esteem thus making the leader more valuable to the company. Empowerment can improve morale and to improve efficiency in the organization (Maxwell, 1998).

The Broker

A broker is defined as an agent or negotiator who can arrange deals, sales, or other agreements (Jewell, 2001). The broker possesses highly developed social and communication skills to negotiate concepts within an organization. In this role it is essential that the individual can influence the stream of available energy and resources toward a variety of goals that may on the organizational, team, and individual levels. A broker must be confident, influential, highly knowledgeable, resourceful, and able to put together strong social networks. As a negotiator, a successful broker must be committed to all parties and appear trustworthy as well. This puts the individual in the position that they mutually respect their colleagues for the duration of negotiations as well as all other times. A broker must master valuable oral communication skillfulness to express a clear message and appear unquestionably credible and confident. These skills combined, a broker is a vital asset to the dexterity of an organization. Brokers tend to be transactional leaders where leaders attempt to motivate followers by giving them something they desire for their good performances (Quinn et al., 2003).

The Innovator

Innovators are not afraid to introduce, manage or accept changes in the work environment (Jewell, 2001). Changes in the work environment may come spontaneously and be received as undesirable annoyances. However, changes are important to react to external and internal environmental transformations. As an innovator, they must be able to conform to this changing world. Innovators must be creative thinkers and they should be capable of generating new ideas and solutions. Innovative ideas can be developed from previous methods or may be a revolutionary conception. Managers of this role need to manage and implement these changes while understanding that there may be resistance to any proposed changes. Many times, an innovator may also need to take on the role of a broker to sell or negotiate these newly communicated ideas (Quinn et al., 2003).

Leadership skills alone will not bring about successful change within an organization. Leaders must have a balance between leadership skills and essential management skills to implement long term change. These management skills include the ability to pursue objectives, coordinating for implementation and controlling the progression of changes to keep efforts successful (Kotter, 1996).

Likewise, superior management without good quality leadership dexterity will seldom cause an organization to achieve a successful transformation. Leaders that lack charisma will have a difficult time when nonconformist are resistant to the changes proposed. Charisma can be used to convince followers that change is necessary and achievable. Charismatic leaders can also sell the notion that the group will be better off after the transformation is complete. However, the lack of a well constructed strategic plan will result in failure. This failure may cause followers to lose confidence in the leader’s credibility (Kotter, 1996).

Sam Walton

Wal-Mart Background and History

Wal-Mart Stores, Inc. is currently the world’s leading retailer, boasting $256.3 billion in sales in the 2003 fiscal year. The corporation has more than 1.3 million employees worldwide. Wal-Mart has more than 4,900 facilities around the world that are comprised in all 50 states, Puerto Rico, and eight foreign countries. The company claims that more than 100 million patrons per week visit their stores globally. Wal-Mart competes in the industry by offering everyday low prices to their customers that are hard to beat by local competitors. Wal-Mart is proficient in lowering the cost of merchandise through negotiations with suppliers and by competently administrating their distribution system. While saving customers cost, the company offers elevated customer service that is rarely present among other major competitors at the same price (Wal-Mart, 2004).

Sam Walton was the founder of Wal-Mart owned variety stores. As Sam Walton expanded he began to experiment with large variety stores, which he named Walton’s Family Centers. His first retail store was called Walton’s Family Centers, and opened in 1962 in St. Robert, Missouri, a town with a population of 1,500. The flagship store, which was 13,000 square feet size, had to be increased to 20,000 square feet in less than a year, and its annual sales volume of $2 million made it the nation’s second largest Ben Franklin store in regards to sales revenues. The St. Robert outlet demonstrated that a store in a small town could attract numerous customers from considerable distances and produce a considerable volume of business if it offered a wide mixture of goods at lower prices. Based on the success of the St. Robert store, Walton developed a second, 13,000 square foot Family Center in Berryville, Arkansas, a town with a population of 2,000, and a third such outlet in Bentonville. By 1962, Walton and his brother Bud owned and managed 16 variety stores in Arkansas, Missouri, and Kansas, making theirs the biggest independent variety-store chain in the United States. From Sam Walton’s leadership and management techniques is how Wal-Mart formed into the massive organization that it is today (Fitzgerald, 2002).

The basis for Wal-Mart’s popular success is because it still follows Sam Walton’s values.  Sam Walton gave each store a hometown identity where each person is welcomed personally, each store honors a graduating high school senior with a college scholarship, bake sales are to benefit a local charity determined by associates, and the prices are consistently lower than other local competitors. Wal-Mart goes according to what Sam Walton believed, “Each Wal-Mart store should reflect the values of its customers and support the vision they hold for their community” (Fitzgerald, 2002).

The Definitive Director

Out of the various leadership roles that Sam Walton’s guidance provided, his clear dominant role was that of a director. Walton was the motivating force behind the vision and direction of the company (Walton & Huey, 1992). Visions help employees share a clear sense of what the company is striving for (Spurge, 1997). Sam was truly the beat of the heart of the company.  Sam firmly believed that embedding a strong company culture into Wal-Mart was the primary key to success. Sam believed that once this was accomplished that he could then use this extraordinary culture to set goals and objectives to win customers over by designing and organizing effective business strategies (Walton & Huey, 1992).

Sam Walton’s reputation for providing direction within Wal-Mart was so admired that even his prevalent rivals envied him. Harry Cunningham, former Kmart CEO declared, “Sam’s establishment of the Walton culture throughout the company was the key the whole thing.” Cunningham also further declared, “He is the greatest businessman of the Century” (Walton & Huey, 1992, p. 156). Walton believed that if he could direct an optimistic company culture that started at the top ranks, he could permeate that positive atmosphere downward the corporate ladder. One of the unorthodox traditions that he would accomplish this was to gather company executives, managers and associates together every Saturday to lead in a thunderous Wal-Mart cheer session. On occasions, he would travel to local stores to lead them in victory rallies as well.  Additionally, Walton frequently attempted to capture the attention of his employees to keep them interested in the company goals and visions. Sam did not allow himself or any of his millionaire executives from clashing with the established hometown personal culture that the company was supposed to represent. He frequently scolded his executives if they appeared at Wal-Mart wearing lavish clothes and driving luxurious cars. He preferred that executives appeared to be a representative of the simple and trusting image that Wal-Mart was supposed to be comprised of. His charismatic personality was able to draw people towards him and his vision (Walton & Huey, 1992). Sam Walton would often communicate to his management, “Capital isn’t scarce; vision is” (BrainyQuote, 2004).

Same Walton’s vision that he used to inspire his employees was a straightforward one. The secret to the success of Wal-Mart, according to Walton, would be to give the customers what they desire. He would focus on directing the company to offer service that would formulate into creating an environment where customers would have the best experience possible and would want to return repeatedly. The recipe that he directed for success was to offer a wide assortment of quality merchandise at the lowest possible prices, customer satisfaction guaranteed guidelines, pleasant and well-informed service representatives, and convenient store hours. The challenge for Sam was to keep the company focused on these ambitions no matter how gigantic the company became. He consistently would ensure that each new store stuck to his revelation that the customer was the reason that Wal-Mart was in business. Sam would frequently pass out buttons for employees with different mottos that would reflect this philosophy. One button read, “Our people make the difference” which was designed to remind customers and employees as well that Wal-Mart placed their customers first (Walton & Huey, 1992). Sam viewpoint was, “There is only one boss, the customer. And he can fire everybody in the company from the chairman on down, simply by spending his money somewhere else” (BrainyQuote, 2004).

Sam Walton proved his director role further by introducing and commanding a ten-step process for success. This ten-step practice was based on being aware of the mistakes made by Sam himself or by observing other companies. This ten-step philosophy directed by him committed the organization to have an embedded partnership with employees, customers, suppliers, and the community. This philosophy was rooted into the culture of the company (Refresher Publications, 1999). The ten-step philosophy entitled “Ten Rules for Success” is included in the appendix of this text.

The Lucid Innovator

Sam Walton was a genuine innovator who came up with his own philosophies for conducting business. He constantly sought-after change to improve the system and developed novel measures to adapt to Wal-Mart’s overwhelming growth and profitability concerns. To do this, he had to think creatively as well as to encourage others to furnish their own resourceful ideas that would enhance the organization. Sam was known as being a master at implementing changes that he was passionate about within the company (Walton & Huey, 1992). Loretta Boss Parker, who was Walton’s personal secretary for 25 years testified that, “His mind works ten times faster than everybody else’s. If he gets something in his mind that he needs to be done regardless of what else might have been planned, the new idea takes priority, and it has to be done now” (Walton & Huey, 1992, p. 116).

While other companies like Kmart and Target would only operate in larger cities and towns, Sam Walton formed the concept of building a store chain that would offer discounted merchandise to small towns. Each store was designed to be an integral part of the host town. As the company swelled, the threat of losing that hometown store feel would be an issue to be contended with. He would not allow any of his stores to have the corporate atmosphere that competing stores had created. To offset any potential threats to this culture and to sustain that hometown Wal-Mart signature, Walton would continuously generate fresh ideas to keep his vision alive. One of the creative solutions that he implemented was to transform the perception of the everyday Wal-Mart employee that worked in the local stores. Walton relabeled these workers from being referred to as “employees” to obtaining the new title of “associates”. The purpose of this change was to empower the employee and make them feel as if they were an important partner at Wal-Mart. Furthermore, customers could see that the company was indeed displaying a hometown friendly atmosphere (Walton & Huey, 1992).

Another change that was introduced by Walton to uphold the Wal-Mart hometown tradition was to add friendly greeters to the front entrances of each location. These greeters would enable to store to offer an immediate contact upon entering the store in a neighborly fashion. Walton felt that all customers should feel as if they were the number one concern of the company. In this way, customers would be able to get immediate assistance if needed, unlike other competitors where customers would have to hunt down employees for assistance (Walton & Huey, 1992).

Further evidence of Sam Walton’s leadership taking on the innovator’s role lies within the comments of current Wal-Mart CEO David Glass. Glass wrote, “He gets up everyday bound and determined to improve something” (Walton & Huey, 1992, p. 39). Not only could Sam Walton’s leadership provide exciting changes, he could successfully implement these changes managerially (Walton & Huey, 1992). Sam Walton himself declared, “I have always been driven to buck the system, to innovate, to take things beyond where they’ve been” (BrainyQuote, 2004).

The Kindhearted Mentor

Sam Walton was a successful mentor as well. He clearly understood himself and the desires of others. He appeared to have understood the needs of employees and customers meticulously. He aimed to provide a real relationship with his employees while making his customers feel as important assets to his company. He could communicate with clarity and passion to an individual to make them feel as if his words were genuine. Moreover, he developed and molded his executive staff into compassionate leaders as if they we following in his footsteps (Walton & Huey, 1992). Walton urged, “Outstanding leaders go out of their way to boost the self-esteem of their personnel. If people believe in themselves, it’s amazing what they can accomplish” (BrainyQuote, 2004). He spent time with the people around him to become familiar with them and give them guidance (Walton & Huey, 1992).

Sam stated that, “I’m optimistic that we can rely on a sound future generation of leaders, but it’s up to all of us to help ensure the right educational opportunities to guarantee it” (Walton & Huey, 1992, p. 176). Walton preferred to set an example to other by giving donations to various originations to give back to the community. Frequently these donations were given anonymously or under strict requests for no publicity. One of these funds that Walton created was to create scholarships to send students from Central America to colleges in Arkansas. His intentions were to help them learn about the potential of the free enterprise system. He felt that this knowledge would enable them to return to their home country and make their own fortunes. Walton wanted to leave a legacy for others to follow (Walton & Huey, 1992).

Walton adamantly believed that effective communication was the key to success. He believed that unambiguous communication was the most vital aspect in any given company. Walton himself was able to deliver his messages to the public, employees, and his business partners with absolute authority and enthusiasm. Although Walton utilized satellite communication to keep in contact with his enormous empire, he preferred to converse with people in person. He was aware that personal communication was his forte. He would constantly travel from store to store in locations around the world to personally communicate his vision to inspire them. Walton’s leadership unmistakably encouraged others to follow in his footsteps (Walton & Huey, 1992).

Conclusion

Under the drive, vision and inspiration of Sam Walton, Wal-Mart’s phenomenal growth and pursuit of excellence is unparalleled. Even a decade after his death, Wal-Mart continues to adhere to his principals and the guidance that his leadership bestowed. Many companies have borrowed some of his beliefs and management techniques to improve their own companies. Few businessmen have impacted society directly or indirectly the way Sam Walton has. Successful leadership extends past mere profitability results and can be seen in the culture of the company. Sam Walton can be looked at as a role model for all leaders to follow in their journey to success.

References

BrainyQuote (2004). Sam walton quotes and quotations. Retrieved September 2, 2004 from http://www.brainyquote.com/quotes/authors/s/sam_walton.html
Fitzgerald, K. (2002). Business biography. Retrieved August 30, 2004 from http://www.stfrancis.edu/ba/ghkickul/stuwebs/bbios/biograph/walton1.htm
Jewell, E. (ed.). (2001). The oxford american desk dictionary and thesaurus. New York: Berkley.
Kotter, J.P. (1996). Leading change. Boston: Harvard Business School Press.
Maxwell, J.C. (1998). The 21 irrefutable laws of leadership. Nashville, TN: Thomas Nelson.
Quinn R, Faerman S., Thompson M., & McGrath M. (2003). Becoming a master manager. John Wiley and Sons, Inc.
Refresher Publications. (1999). Sam walton’s 10 rules for success. Retrieved September 1, 2004 from http://www.refresher.com/!walton
Spurge, L. (ed.). (1997). Knowledge exchange business encyclopedia illustrated. Santa Monica, CA: Knowledge Exchange.
Wal-Mart (2004). Wal-mart stores, inc. at a glance. Retrieved September 1, 2004 from http://www.walmartstores.com
Walton, S. & Huey, J. (1992). Sam walton: Made in america. New York: Bantam.

Appendix

Sam Walton’s “Ten Rules for Success” was the strength behind forming the culture of Wal-Mart (Refresher Publications, 1999).

1. Commit to your business. Believe in it more than anything else. If you love your work, you’ll be out there every day trying to do the best you can, and pretty soon everybody around will catch the passion from you – like a fever.
2. Share your profits with all your associates and treat them as partners. In turn, they will treat you as a partner, and together you will all perform beyond your wildest expectations.
3. Motivate your partners. Money and ownership aren’t enough. Set high goals, encourage competition and then keep score. Make bets with outrageous payoffs.
4. Communicate everything you possibly can to your partners. The more they know, the more they’ll understand. The more they understand, the more they’ll care. Once they care, there’s no stopping them. Information is power, and the gain you get from empowering your associates more than offsets the risk of informing your competitors.
5. Appreciate everything your associates do for the business. Nothing else can quite substitute for a few well-chosen, well-timed, sincere words of praise. They’re absolutely free and worth a fortune.
6. Celebrate your success and find humor in your failures. Don’t take yourself so seriously. Loosen up and everyone around you will loosen up. Have fun and always show enthusiasm. When all else fails put on a costume and sing a silly song.
7. Listen to everyone in your company and figure out ways to get them talking. The folks on the front line – the ones who actually talk to customers – are the only ones who really know what’s going on out there. You’d better find out what they know.
8. Exceed your customer’s expectations. If you do they’ll come back over and over. Give them what they want – and a little more. Let them know you appreciate them. Make good on all your mistakes, and don’t make excuses – apologize. Stand behind everything you do. ‘Satisfaction guaranteed’ will make all the difference.
9. Control your expenses better than your competition. This is where you can always find the competitive advantage. You can make a lot of mistakes and still recover if you run an efficient operation. Or you can be brilliant and still go out of business if you’re too inefficient.
10. Swim upstream. Go the other way. Ignore the conventional wisdom. If everybody is doing it one way, there’s a good chance you can find your niche by going exactly in the opposite direction.

The post The Leadership of Sam Walton appeared first on Michael A. Hartmann.

Lockheed Martin is a leader in the Aerospace Industry that provides a diverse range of products for the commercial and government sectors around the world. The company has enjoyed record profits in the wake of September 11 due to security interests around the world. As the global demands change, Lockheed must be able to continue to diversify to meet these changing demands. The year 2005 is a crucial year where the company must develop a new strategy to prepare for a downturn in military needs.

Lockheed Martin Corporation Strategic Plan

Company Overview and History

The Lockheed Martin Corporation is an advanced technology company based in Bethesda, Maryland that was established in 1995 when Lockheed Corporation and Martin Marietta merged. Although the company has been newly formed, it is comprised of 17 heritage companies that date back to 1909. These 17 companies include Lockheed Corporation, Martin Corporation, American Marietta, Goodyear Aerospace, General Dynamics, Sperry, IBM Federal Systems, Ford Aerospace, Sanders, Gould, Xerox Electro-Optical Systems, Loral Corporation, UNISYS, and Vought (Lockheed Martin, 2005a).

Lockheed Martin currently employs 130 thousand employees worldwide and in 2004 generated $35.5 billion dollars in sales. The company offers research and development services as well as a manufacturer of advanced technology systems and aerospace aircraft and equipment. 80% of the company’s business is with the United States Department of Defense (Lockheed Martin, 2005b).

The company is best known for its jet powered aircraft. Most notably are the C-130 transport cargo, F-16 Fighting Falcon, SR-71, F-117A Stealth Fighter, F/A-22 Raptor, and the U-2S spy plane. Lockheed Martin is also responsible for the manufacturer of NEXTRAD Doppler RADAR, the GPS System, the Hubble Space Telescope, Magellan spacecraft, Pershing II missile systems, and the Titan IV missile systems. Additionally, the company has set milestones that have shaped the aerospace industry (Lockheed Martin, 2005b). Some of the prevalent achievements of the company are as follows:

• In 1962, John Glenn is the first American to orbit the Earth using General Dynamics Atlas Rocket (Lockheed Martin, 2005a).
• During 1963, Jacqueline Cochran pilots a Lockheed F-104 Starfighter, setting the woman’s speed record at 1,429 mph (Lockheed Martin, 2005a).
• Lockheed’s SR-71, the world’s fastest aircraft sets the world’s fastest speed record by traveling America’s coast to coast in 64 minutes and 2 seconds at an average speed of 2,144.8 mph in 1990 (Lockheed Martin, 2005a).
• Lockheed Martin develops a tracking infrastructure system for the U.S. Postal Service. This system enabled the Post Office to track and confirm packages, greatly maximizing delivery time and accuracy and reducing the likelihood of lost packages (Lockheed Martin, 2005a).

Lockheed Martin continues to expand their services beyond the limitations of aerospace. The company generated $17.3 billion in 2004 in these diversified services. These services include energy programs, government and commercial IT services, and other federal services. Lockheed Martin is led by Robert J. Stevens, Chairman, President and Chief Executive Officer. The company is currently the largest defense contractor in the world (Lockheed Martin, 2005b).

Competition

The Boeing Company

The Boeing Company is currently the world’s largest aerospace company. Additionally, they maintain the title of the world’s prominent defense contractor. The Chicago based Boeing Company employs roughly 154 thousand people in 67 countries worldwide. In 2004, the company had revenues of $52.45 billion dollars. Presently, Boeing has established itself as the largest United States exporter (Boeing Company, 2005a).

Boeing is widely known for its production of commercial jetliners, military aircraft, satellites, and missiles. The list of current commercial jetliners includes the 717, 737, 747, 757, 767 and 777 series aircrafts. There are more than 12,000 of these aircraft in service worldwide, which consist of 75% of the world’s commercial fleet. Boeing also offers global financial services, aviation training services and other diversified services and products (Boeing Company, 2005b).

Despite being the world’s largest aerospace company, Boeing has endured several setbacks in recent years. In 2003, then CEO Philip M. Condit was forced to resign after allegations of corruption by the United States Air Force. Being was accused of inflating lease prices to the Air Force. Harry Stonecipher, former McDonnell Douglas CEO, replaced Condit but was also removed in 2005 for violating company conduct codes (Yahoo, 2005).

In June 2003 Lockheed Martin sued Boeing claiming that Boeing had resorted to industrial espionage in 1998 to succeed in gaining the Evolved Expendable Launch Vehicle (EELV) contract. Lockheed alleged that an ex-employee distributed 25,000 proprietary documents to Boeing. Lockheed maintained that these documents permitted Boeing to win 21 of the 28 offered military satellite launches. In July 2003 Boeing was disciplined, with the Pentagon removing $1 billion worth of contracts away from Boeing and giving them to Lockheed (Wikipedia, 2005).

General Dynamics

General Dynamic’s corporate headquarters is in Falls Church, Virginia. The company has leading market eminence in shipbuilding and marine systems, land and amphibious combat systems, mission-critical information systems and technologies, and business aviation. Additionally, General Dynamics is a principal supplier of advanced defense systems to the United States and its partners and has established the world standard in business jets. It has four major business segments which are Aerospace, Combat Systems, Information Systems and Technology, and Marine Systems (General Dynamics, 2005).

General Dynamics Land Systems is best known to produce the M1A2 Abrams Battle Tank that primarily supplies the United States Army. The company also holds the distinction of designing the F-16 fighting Falcon, known as the most successful fighter of its generation. General Dynamics sold the project to Lockheed Martin in 1993. The company has since abandoned military aerospace programs (General Dynamics, 2005).

General Dynamics is highly competitive with Lockheed Martin via their General Dynamics Information Systems & Technology business unit. The unit specializes in incorporating commercial and military off-the-shelf and custom-engineered products to convey command, control, communications, computing, intelligence, surveillance, and reconnaissance solutions. This includes supplying information-assurance resolutions and putting forward advanced software and electronics systems. This business unit has increased its authority recently with the aid of defense, intelligence, and homeland defense needs (General Dynamics, 2005).

Raytheon

Raytheon was founded as the American Appliance Company in 1922. The company is an industry leader in defense and government electronics, space, information technology, technical services, and business aviation and special mission aircraft. Their mission is to be the most well-liked defense and aerospace systems supplier in the world. Raytheon uses their own version of Six Sigma which is implanted within the framework of their business organizations as the means to improve productivity, develop the business, and to build a new tradition (Raytheon, 2005).

Integrated Defense Systems (IDS) is Raytheon’s business unit that is competing with Lockheed Martin the most. Raytheon has a sturdy international and domestic customer base that includes the U.S. Missile Defense Agency and the U.S. armed forces. IDS is a supplier integrated air and missile defense and naval and maritime war fighting solutions. The company invests in the latest technology to develop products that are cutting edge. The company has also benefited by the Global War on Terror by designing high-end surveillance and reconnaissance systems (Raytheon, 2005).

United Technologies Corporation

The United Technologies Corporation (UTC) has been dubbed Fortune Magazine as the most admired aerospace company in the world. This diverse company has several business units that include Carrier heating and air conditioning systems, Hamilton Sundstrand Aerospace and Industrial Systems, Otis Elevators and Escalators, Pratt & Whitney, Sikorsky, UTC Fire & Security protection services, UTC Power and United Technologies Research Center. The company is best known for their Pratt & Whitney aircraft engines that propel over 50 percent of the world’s commercial airliners and their products can be discovered on more than 90 percent of the world’s aircraft (United Technologies, 2005).

Sikorsky is world renown for their design and production of advanced helicopters for commercial, industrial, and military uses. Hamilton Sundstrand may produce the highest threat to Lockheed Martin as they produce engine control and electric power systems, as well as electronic controls for actuation systems for aircraft. Lockheed and UTC frequently work together on such projects as the Joint Strike Fighter. UTC maybe the least threat of Lockheed Martin since the two companies manufactures many unlike products (United Technologies, 2005).

Northrop Grumman

Northrop Grumman Corporation is a global defense company that offers a wide range of technologically advanced, pioneering products, services and solutions in systems integration, defense electronics, information technology, advanced aircraft, shipbuilding, and space technology. Most of the business units in the company directly compete with Lockheed Martin. The two companies run so parallel that they attempted to merge in 1998 and were blocked by the Federal Government who was concerned that the combination was too powerful. Despite being able to be highly competitive, the two companies have undergone many high level joint ventures such as the Joint Strike Fighter (Northrop Grumman, 2005).

Current Strategies and Objectives

Overview

Lockheed Martin’s current strategy is to focus on the business units and projects that encompass the core strengths of the company. The company has enjoyed four years of repeated improvement in their operating margins through a mix of investments and divestures. Business units that do not fit their core businesses that provide stability have been sold or discontinued. For those products that the company deems part of their strengths, they intend to gain market shares in the form of horizontal integration. Their goal is to continue to increase their Return on Invested Capital (ROIC) by using their assets and other investments wisely (Lockheed Martin, 2005b).

Lockheed Martin has chosen to bolster their Information Technology business units to provide customers the latest and more secure means of communication possible. The company has also purchased Sippican Holdings Inc., a supplier of naval electronics. Lockheed Martin believes that their expertise in avionics systems can be applied to naval weapons as well. The company plans to make several more acquisitions in the Information Technology and Naval/Aerospace electronics industry soon. Investing in missile and space technology is also part of their overall strategy (Lockheed Martin, 2005b).

Sensing that the commercial satellite industry has become over-saturated, their satellite business units have been trimmed down or eliminated. Lockheed Martin has recently sold their stakes in three satellite companies that include New Skies, Comsat General and Intelsat. All three companies are a hindrance to the vision of the company in the future. Additionally, a merger with Titan Corporation was canceled due to the same reasons (Lockheed Martin, 2005b).

Lockheed Martin’s overall objective is to continue to increase their operating income annually and position themselves to be able to react to any political changes that may come. Horizontal integration in the commercial and government sales industry will help the company become increasingly diverse. The company intends to focus on providing current customers as well as potential customers with the best quality service possible (Lockheed Martin, 2005b).

Current Mission Statement

“To become the preferred supplier of high quality, cost competitive technical and personnel support services for government and commercial customers and all Lockheed Martin companies in the United States as well as other international companies marketing business opportunities in the world.” (Lockheed Martin, 2005b).

Revised Mission Statement

To become the preferred trusted supplier of a diverse range of advanced security and defense technologies that meet the highest standards for commercial and government organizations around the world.

Current Vision Statement

“To be the world’s best advanced technology integrator” (Lockheed Martin, 2005b).

Revised Vision Statement

To become the trusted leader in providing the world with advanced communication and security needs.

Evaluation

Competitive Profile Matrix (CPM)

A Competitive Profile Matrix is used to categorize strengths and weakness of a company with its major competitors (David, 2005). The Aerospace industry is rather unique compared to other industries. While companies viciously compete for market share and government contracts, they frequently unite to bid on a contract. An example of this is a joint venture between Boeing, Lockheed Martin, United Technologies Corporation, and Northrop Grumman in the design and production of the F-35 Joint Strike Fighter contracted to the United States military (Yahoo, 2005).

The CPM identifies the focus and strengths of major business units with each company. Boeing, the largest aerospace company of the group heavily relies on its sales of commercial airliners but is not very strong in military aircraft contracts. Lockheed Martin strength lies in their production of military aircraft, especially tactical aircraft to the United States and foreign governments. Lockheed Martin has recently invested in resources into naval technologies. Doing so, places the company in increased competition with Northrop Grumman, and United Technologies Corporation (UTC) (Yahoo, 2005).

UTC is the only company in the group to produce jet engines. Boeing and Lockheed Martin depend heavily on the quality Pratt & Whitney engines provided by UTC. UTC is strong in providing avionics equipment and fixed wing aircraft (Yahoo, 2005).
While all companies in the industry are leaning towards providing Information Systems, Boeing and Raytheon are considered the leaders in the industry. With the sale of the F-16 to Lockheed Martin, General Dynamics is no longer a concern in the military aircraft industry. GD has elected to focus on land vehicles and other technology solutions (GD). Commercial satellite comparisons are not included in the CPM resulting in the divestment of satellite business units by Lockheed Martin in 2004. The CPM is presented below:

External Factor Evaluation (EFE)

An External Factor Evaluation (EFE) Matrix allows strategists to review and evaluate economic, social, cultural, demographic, environmental, political, governmental, legal, technological, and competitive information (David, 2005). A summary and table of external opportunities and threats are listed below.

Although the satellite industry has become saturated with products and the demand is low, there are opportunities to provide advanced technology that can be used inside satellites. Lockheed Martin is in the position to provide such technology to partner with companies that build satellites. The Global War on Terrorism and the needs for Homeland Security technology offers Lockheed Martin a continuing demand for Information Technology and security needs. This demand not only with the United States, but also includes foreign sales. This is evident with the interests by foreign countries in the newly designed F-16 fighting Falcon (LCK). Missile and space-based technology provide an avenue for demand as it can be associated with Homeland Security needs. Naval opportunities exist with the need for the United States to replace the countries aging fleet (Lockheed Martin, 2005b).

Threats include the high costs of research to develop advanced technology. As the demand for high technology products rise, the costs associated with it increases with it. This means that a higher percentage of revenue must be allocated to research where it could be used somewhere else (David, 2005).

Potential lawsuits on environmental contamination and pressure from environmental activists are a constant threat to the company. Given the company environmental record, Lockheed Martin must be proactive in their environmental responsibilities. A sudden political shift in the upcoming elections can quickly place Lockheed Martin in a downward trend. Politicians that wish to limit defense contracts will diminish military and defense revenues. An ongoing threat is the possibility of interruptions within the supply system. Lockheed Martin uses sole suppliers for many of their raw materials. The company has little control of their suppliers especially companies that supply aircraft material (David, 2005).

The Boeing Company and Raytheon are considered the two biggest threats to Lockheed Martin. Boeing is currently the largest aerospace company in the world industry with the resources it needs to invest in horizontal integration as well as backward integration. Boeing also has extensive Information Systems contracts with the United State Government. Raytheon has a long history of developing high tech equipment and security systems to the United States government. Raytheon’s political ties with the nation may give Raytheon a competitive advantage. Although Northrop Grumman, General Dynamics, and UTC are also viable threats, Boeing and Raytheon are in the best overall position to be competitive (Yahoo, 2005).

Internal Factor Evaluation (IFE)

An Internal Factor Evaluation (IFE) Matrix is a strategy-formulation tool that condenses and evaluates the key strengths and weaknesses in the functional areas of a business. A major internal strength of Lockheed Martin is that they have been able to increase their Operating Income over the last four years. This shows that the company has been focuses and taking advantage of changes in the industry. In the age of Homeland Security concerns, the company has managed to secure many military and government contracts. This has been aided by their political ties, history, and willingness to partner with competitors. Six Sigma implementation aids the company in reducing wastes and producing a higher quality product. A diverse business line helps shield the company from fatal drops in income due to lower demands in one product (David, 2005).

Although strength of the company is the fact that they have military contracts, one of their major weaknesses is their dependence on military contracts. Lockheed Martin has had weaknesses with exercising environmental accountability and soil contamination. Other weaknesses include the shortage of machine tooling suppliers to manufacture equipment needed to produce aircraft, shortages of skilled workers to maintain the machines, and the company only uses one supplier for raw airframe materials (David, 2005). The IFE table is below:

SWOT Matrix (TOWS)

The SWOT Matrix (TOWS) is a vital matching device that aids managers to develop four types of strategies: SO Strategies, WO Strategies, ST Strategies, and WT Strategies. SO strategies pursue opportunities that are a good fit to the company’s strengths. WO strategies overcome weaknesses to pursue opportunities. ST strategies identify ways that the firm can use its strengths to reduce its vulnerability to external threats. WT strategies institute a defensive plan to prevent the firm’s weaknesses from making it highly vulnerable to external threats (David, 2005).

SO strategies include taking advantage of increased operating income, the company’s ability to adapt to change, and Lockheed Martin’s investments in new technology to seize opportunities in advanced technologies. Opportunities that have been untapped by the company within the military and foreign sales can be captured by focusing on a diverse product line. Missile, space, and naval technology can be developed to take advantage of needs by the United States and other high technology nations.

In WO strategies, the dependence on military contracts can be softened by continued efforts to invest in technology to assist needs in the Homeland Security and the Global War on Terrorism by government as well as commercial organizations. Funding received by this diverse product line can be reinvested in the company to increase funds for research and design. To overcome environmental concerns, funds can be used to clean up and prevent any additional damage to the ecosystem.

ST strategies for Lockheed Martin focus on using their resources to attract a diverse range of customers around the world. Using their Six Sigma philosophies, the company can improve profitability to remain competitive in the commercial industry as well as to foreign governments. Environmental accountability should be a major concern for the company as increased demands around the world expect minimal damage. Efficient inventory systems can help buffer any potential shortages from suppliers. Using minimal waste, inventory can be used on an optimal level.

WT strategies call for the possibility of using backwards integration of suppliers to have more control over process flow. Environmental teams can be funded to ensure that studies are conducted to head off any excess damage. Finally, the company could sponsor courses to train skill labor employees to get them working using the best knowledge possible. Only by taking these matters seriously and applying proper resources, the threats and weaknesses of the company can be eliminated.

Strategic Position and Action Evaluation Matrix (SPACE)

The Strategic Position and Action Evaluation (SPACE) Matrix is another essential matching instrument. Its four-quadrant framework reveals whether aggressive, conservative, defensive, or competitive strategies are most appropriate for a given organization. The axes of the SPACE Matrix represent two internal dimensions (financial strength [FS] and competitive advantage [CA]) and two external dimensions (environmental stability [ES] and industry strength [IS]). These four factors are the most important determinants of an organization’s overall strategic position (David, 2005).

The SPACE matrix for Lockheed Martin indicates that the company can obtain an aggressive strategy (David, 2005). The financial strength of the company is relatively high in comparison to its competitors. Due to the demands with Homeland Security and the Global War on Terrorism, the Aerospace industry is enjoying rapid growth (Lockheed Martin, 2005b). Diversity in product lines will determine the stability in the environment. All major companies in the industry are seeking to extend their products and services to attract a wide range of customers. The industry is no longer limited to the dependence on commercial and military aircraft sales.

Boston Consulting Group Matrix (BCG)

Independent divisions (or profit centers) of an organization make up what is called a business portfolio. When a firm’s divisions contend in diverse industries, a separate strategy frequently must be developed for each business. The Boston Consulting Group (BCG) Matrix is designed exclusively to improve a multidivisional firm’s efforts to formulate strategies (David, 2005).

The BCG Matrix for Lockheed Martin is absent of information from its competitors. The first reason is that each company fragments their business units differently. Extensive research would be required to group products in like categories that span across business units. Secondly, Lockheed Martin has made several moves to divest in the commercial satellite industry, which makes significant changes in relevant data (Lockheed Martin, 2005b).

The BCG Matrix indicates that the Aeronautics business produces the highest revenue at 33% and growth rate of 15.48%. The Electronics Systems business unit produces the second highest revenue at 27% and maintaining the highest operating profit. The Information and Technologies Services business unit is the fastest growing with a 19.57% growth rate. The sales from satellites included in the Space Systems business unit that generates 18% of the revenue. Satellite sales consist of 60% of this business unit that has the lowest growth rate of 5.58%. Much of the growth rate is attributed to military contracts (Lockheed Martin, 2005b).  

Grand Strategy Matrix (GS)

A Grand Strategy Matrix (GS) places a company in one of four quadrants based on two dimensions. These dimensions are competitive position and market growth. Each quadrant contains a list of appropriate strategies a company can take (David, 2005). Lockheed Martin falls into Quadrant I is reserved for companies that are highly competitive in a rapidly growing market. Strategies in this quadrant call out for market and product development as well as diversification and various forms of integration (David, 2005).

Quantitative Strategic Planning Matrix (QSPM)

The Quantitative Strategic Planning Matrix (QSPM) is an analytical system created to establish the relative attractiveness of practical alternative measures. The QSPM for Lockheed Martin compares two alternatives. The first alternative is to commence in horizontal and backwards integration, including using resources to train skill labor employees. The other alternative is to forego integration and retain and redevelop what is left of commercial satellite production (David, 2005).

The matrix shows that horizontal and backward integration is more attractive to the goals of the company in every category apart from one. The only exception is that the future demand for advanced GPS may be benefited by retention of commercial satellite production (Lockheed Martin, 2005b). All other factors fail to find a solution to the direction that the company needs to survive in the future.

Income Statement and Balance Sheet

A projected income statement and balance sheet for Lockheed Martin is presented in the table below. Projected values for 2005 are based on industry expectations as well as the current company trend. It is assumed in 2005, that sales will grow by 11%. Debt and inventory levels are assumed to be lowered as the current trend and no indications are to the contrary (Lockheed Martin, 2005b).

Conclusions

Lockheed Martin is currently enjoying a renaissance period in the sales of products to the United States Department of Defense. The company is in the best financial position of its history. Only Boeing leads Lockheed Martin in revenue in the industry. However, Boeing’s dependence on commercial aircraft sales has caused the stability of the company to be questionable due to airline bankruptcies and the negative impact of September 11. Boeing will be forced to use their resources to aggressively compete in the military aircraft and Information Systems industries. Lockheed Martin needs to use this transition period to strengthen their core businesses before Boeing can execute their plans (Lockheed Martin, 2005b).

In contrast, Lockheed Martins dependence on military aircraft sales places uncertainty in the future of the company. As the political environment shifts, there are no guarantees that military sales will be able to drive profits in the future. This forces the company to seek new customers with diverse products around the world. The company must tackle their environmental problems to ensure that they are well respected by the government and society in the future. Gaining control of their suppliers and providing a pipeline for skill labor is an essential element for continues success. This can be accomplished by focusing on the core strengths of the company and purging products and units that are outside of their business core. Decisions that the company makes now will determine their stability in the future.

Recommendations

It is recommended that Lockheed Martin pursue horizontal and backwards integration to protect the company from instability in the future. Diversification, image, and control of suppliers will be the key to the success of the company in the future. This will be achieved by a combined effort by all business units within the company and by alliances with other companies.

The company has stated that they have the desire to strengthen the current business core of the company. Each project should be individually evaluated to see if it fits into the core of the business. If the project is outside of the desire parameters, the project can be sold or discontinued so that focus is placed where needed. The production of sales of commercial satellite equipment is a good example. In a market that has very little growth and demand, these projects should be shed from the company. The exception would be if the technologies are like that used in aerospace or missile-based products such as GPS and other advanced technologies.

Horizontal integration is necessary to attract new customers around the world.  This can come in the form of acquisitions of other companies. However, wise decisions must be made in choices of acquisitions. Companies who produce projects outside the core strengths of the company should not be purchased unless those undesired units of the company can be liquidated without loss. The company must pay attention to Information Systems opportunities because it is the fastest growing unit in the industry. Additional naval technology is highly desirable since many components are used in aerospace systems. As an ideal, every business unit of the company should have a high level of continuity with each other to share advances in technologies with each other. Similar technologies can share additional recourses in production and design stages.

Backward integration is also highly recommended. Lockheed Martin must have better control over suppliers. The company needs to investigate investing in companies that produce raw materials for aircraft. They are currently using a sole supplier that has other customers such as Boeing, who may take precedence in delivery requirements. The company can be in the position to generate revenue by selling these materials to competitors.

The second area of backward integration would be to invest in companies that produce the tooling equipment that is needed for the company. With a limited amount of reliable companies available that can produce machinery tools for Lockheed Martin, a major weakness has formed (David, 2005). The company’s expertise in designing advanced aircraft should easily integrate into the design and production of the machines that help create them. This also allows the company to have control over specifications and modifications. The company can choose to sponsor technical schools or create their own program to train operators and technicians. When changes are made to the machines or processes, workers can be informed rapidly.

Lockheed Martin also needs to focus on improving their image as an environmentally friendly company. This needs to surpass the usual public relations statements made on brochures and on the web. The company has been under pressure by the government and environmental groups to have more accountability at their locations. The company should create a small but effective environmental team. Their duties would be to ensure that the company is complying with all environmental related issues, identify and clean previous contaminated sites, and to research methods to minimize future contamination.

Finally, it will be important for Lockheed Martin to continue to forge alliances with other companies to produce certain products. Northrop Grumman has virtually an identical business profit center system where the two companies should be competing at every level. However, the two companies have chosen to form a partnership together that benefits both organizations but beats other contractors for the bids. Although the two companies have been forbidden to formally merge, using each others strength to benefit both companies can be very attractive at this point (Wikipedia, 2005). There may be a time in the future where the United States government will allow them to merge.

Evaluations

To measure success, changes will have to be evaluated periodically. No specific timeline can be given to implement changes since various acquisitions may not be available when desired. It would be beneficial if all changes could be implemented within a five-year period.

Lockheed Martin has used two indicators that the company has measured its own success. These are Operating Margin and Return on Invested Capital (ROIC) (Lockheed Martin, 2005b). These indicators should be calculated as part of the evaluation. With each venture, the company will have to make investments with capital in some fashion. The RIOC can determine what impact the investment has placed. At the same time, Operating Margins must be measured to ensure that desired levels are being maintained. It would be ideal if funding from divested projects in the company be used to help fund horizontal and backward integration as well as the different programs suggested.

On a broader scale, evaluation can be used in the form of a revised IFE and EFE matrix. At the end of each fiscal year, the company can compare the new matrixes with the original matrixes to see if any progress has been made. Each potential investment must be evaluated before the purchase is made to estimate the effect on the strategy of the company. Together with a careful examination of finical records, the company will be able to track the impact of all relevant changes as they are made.

References

Boeing Company. (2005a). Boeing company annual 2004 report. Chicago: Author.

Boeing Company. (2005b). Boeing in brief. Retrieved October 12, 2005, from http://www.boeing.com/companyoffices/aboutus/brief.html

David, F.R. (2005). Strategic management: Concepts & cases. Englewood Cliffs, NJ: Prentice Hall.

General Dynamics. (2005). Home. Retrieved October 18, 2005, from http://www.generaldynamics.com/default.htm

Lockheed Martin. (2005a). About us. Retrieved October 14, 2005, from http://www.lockheedmartin.com/wms/findPage.do?dsp=fec&ci=4&sc=400

Lockheed Martin. (2005b). Lockheed martin corporation annual 2004 report. Bethesda, MD: Author.

Northrop Grumman. (2005). About us. Retrieved October 24, 2005, from http://www.northropgrumman.com/capabilities/capabilities.html

Raytheon. (2005). About us. Retrieved October 23, 2005, from http://www.raytheon.com/about/

United Technologies. (2005). Company profile. Retrieved October 23, 2005, from http://www.utc.com/profile/index.htm

Wikipedia. (2005). Lockheed martin. Retrieved October 14, 2005, from http://en.wikipedia.org/wiki/Lockheed_Martin

Yahoo. (2005). Yahoo finance. Retrieved October 15, 2005, from http://finance.yahoo.com

The post Lockheed Martin Corporation Strategic Plan appeared first on Michael A. Hartmann.

Microsoft Visual Studio .NET is an Integrated Development Environment (IDE) software package that allows programmers to develop software under the Microsoft .NET Framework. This programming platform allows developers to build software rapidly with very little difficulty. Although .NET technology is still in its juvenile stages, the platform has proven to be extremely effective and promises an absolute solution for programmers in the future using any Operation System or microprocessor. Visual Studio.NET has many features to empower programmers to achieve virtually any task and has been heavily marketed by Microsoft in recent years. .NET currently only has one rival with a similar technology, Sun Microsystems’, Java 2 Enterprise Edition (J2EE) technology. Independent tests and studies have demonstrated that .NET is outperforming J2EE in every testable category. The .NET platform continues to be refined to become more efficient, simple, and powerful to keep up with the demands of changing technologies.

Visual Studio .NET

Introduction

Until recent times, developers had to create their programs using separate interpreters or compilers for each programming language to render software on a system. Furthermore, despite using the same programming language on one microprocessor, compiled code would rarely work on a different processor. This required programmers to recompile their code on the new target processor or must totally rewrite the code to maintain compatibility. Microsoft developed the .NET Framework to bridge the gap between microprocessor dissimilarities and enabling the programmer to concurrently use an assortment of programming languages. Microsoft Visual Studio .NET is Microsoft’s Integrated Development Environment (IDE) software designed to permit developers to take full advantage of the technology. A discussion of the details of Visual Studio .NET will be presented.

Microsoft Corporation History

Microsoft was founded in 1975 when Paul Allen and Bill Gates completed and sold a BASIC (Beginner’s All-Purpose Symbolic Instruction Code) interpreter to Micro Instrumentation and Telemetry Systems (MITS). Microsoft soon sold their version of BASIC to other companies and subsequently developed two additional programming languages, FORTRAN (Formula Translation/Translator) and COBOL (Common Business-Oriented Language). Sales of these three languages generated an annual income of one million dollars by 1978 (Grote & Nichols, 2000).

Steve Ballmer joined the company in 1980 as the company expanded sales throughout Europe and Asia. Microsoft is incorporated as a privately held corporation in 1981. Pascal, another popular programming language was added to Microsoft’s catalog and their first operating system, MS-DOS 1.0 was introduced as well (Grote & Nichols, 2000).

1983 was a landmark year for Microsoft as the company introduced Microsoft Word 1.0, Microsoft Mouse, and the first version of Microsoft Windows. After three years of substantial growth, the company became a public corporation by selling an initial 61 million dollars in stock. 15 years after the company was founded, the company was already achieving sales of 1 billion dollars annually. Through the years, Microsoft continued to innovate and developed fresh concepts to market to customers. Microsoft introduced the .NET concept in 2000, promising a technology that would bind all application and web developers together with a single platform (Grote & Nichols, 2000).

Microsoft.NET

Overview

The .NET Framework is Microsoft’s latest offering in the world of cross-platform development. The Microsoft .NET Framework introduces many new concepts, technologies, and terms. .NET is designed to be as trouble-free as possible. .NET contains functionality that a developer can effortlessly access. This same functionality operates within the boundaries of standardized data types and naming conventions. This internal functionality also includes the establishment of special data within an assembly file that is vital for interoperability, .NET’s built-in security, and .NET’s automatic resource management (Balena, 2002).

The .NET Framework is comprised of two elements: The Common Language Runtime (CLR) and the Framework Class Library (FCL). The .NET Framework is the part of the plan that makes developing services and applications truly simple. Microsoft made the CLR and FCL available in the various versions of Windows and the Windows.NET Server Family. A miniature version of the .NET Framework, identified as the.NET Compact Framework, is also available for PDA’s and appliances (Balena, 2002).

The CLR is the runtime environment for .NET. It manages code execution and the services that .NET offers. The CLR discerns what to do through unique data that is referred to as metadata that is enclosed within the applications. The metadata inside the applications deposit a map of where to find classes, when to load classes, and when to set up runtime environment boundaries, produce native code, implement security, establish which classes use which methods, and load classes when required. Since the CLR is privy to this information, it can also decide when an object is used and when it is released. This is known as managed code. Managed code is what sets apart .NET from previous endeavors by companies (Microsoft, 2004c).

For a user to run applications in the .NET framework, .NET framework runtime must be previously installed on the computer. This can be downloaded freely from Microsoft on their web site. The .NET Framework is already included in Windows XP starting with Service Pack 1 as well as all Windows Server 2003 systems. The company intends to include the runtime in all future releases of Microsoft Windows. .NET offers many advantages over legacy development platforms (Microsoft, 2004c).

Consistent programming model

Contrasting other platforms, where some operating system services are retrieved using Dynamic-Link Library (DLL) functions and other services are accessed passing through COM objects, all application services are obtainable through a common object-oriented programming model (Balena, 2002).

Simplified programming model

The CLR attempts to significantly simplify the confusing and mysterious structure required by Win32 and COM. Explicitly, the CLR now liberates the developer from struggling to comprehend many difficult concepts that were previously barriers to development. The CLR does not just eliminate these concepts away from the developer; these concepts just do not exist, in any manner, in the CLR (Balena, 2002).

Run once, run always concept

Every single Windows developer is accustomed with “DLL hell” versioning problems. This state transpires when components being installed for a new application overwrite components of an old application, triggering the old application to exhibit bizarre behavior or discontinue functioning altogether. The architecture of the .NET Framework now separates application components so that an application consistently loads the components that it was compiled and tested with. In theory, if the application runs after installation, then the application should always run (Balena, 2002).

Simplified deployment

Outside of .Net, Windows applications are unbelievably difficult to set up and deploy. Numerous files, registry settings, and shortcuts frequently need to be produced. Additionally, completely uninstalling an application is virtually unattainable. The .NET Framework attempts to eliminate these issues in Windows (Microsoft, 2004c).

This is accomplished by not referencing the .NET Framework components in the registry. Essentially, installing the majority of .NET Framework applications necessitate no more than copying the files to a directory and adding a shortcut to the Start menu, desktop, or Quick Launch bar. Uninstalling the application is as effortless as deleting the files. Therefore, a special installation package for an application is no longer required (Balena, 2002).

Wide platform reach

When compiling source code for the .NET Framework, the compilers produce common intermediate language (CIL) as an alternative to the more traditional CPU instructions. At run time, the CLR translates the CIL into native CPU instructions. Since the translation to native CPU instructions is done at run time, the translation is done for the host CPU. This allows the deployment of any .NET Framework application on any machine that has an ECMA-compliant version of the CLR and FCL running on it. These machines can be x86, IA64, Alpha, PowerPC, and so on. Users will instantly be pleased about the significance of this broad execution if they ever change their computing hardware or operating system (Balena, 2002).

Programming language integration

COM permits different programming languages to interoperate with each another. The .NET Framework allows languages to be incorporated with one another so that a programmer can utilize types of another language as if the languages are the same. For example, the CLR makes it possible to create a class in C++ that stems from a class implemented in Visual Basic. The CLR permits this because it defines and provides a Common Type System (CTS) that all programming languages that reference the CLR must draw on. The Common Language Specification (CLS) controls what compiler implementers be required to do for their languages to integrate well with other languages (Microsoft, 2004c).

Microsoft is itself providing several compilers that produce code using the runtime: C++ with Managed Extensions, C#, Visual Basic .NET, ASP.NET, J#, and an intermediate language (IL) assembler. Moreover, companies other than Microsoft and academic establishments are developing compilers for other languages that also use the CLR. Some of these include compilers for Alice, APL, COBOL, Component Pascal, Eiffel, FORTRAN, Haskell, Mercury, ML, Mondrian, Oberon, Perl, Python, RPG, Scheme, F#, and Smalltalk (Balena, 2002).

Simplified code reuse capabilities

Using the components described above, developers can generate their own classes that offer services to third-party applications. This makes it tremendously simple to reuse code and generates a large market for component vendors. These custom classes can be built on existing classes or codes included in .Net (Balena, 2002).

Automatic memory and management

Programming involves great expertise and discipline, particularly when it comes to managing the use of resources such as files, memory, screen space, network connections, database resources, etc. One of the most frequent bugs is the neglect to free one of these resources; eventually causing the application to perform improperly at some irregular point in time The CLR automatically tracks resource handling, assuring that an application on no account leaks resources. This is also referred to as the garbage collection (Microsoft, 2004c).

Type-safe verification

The CLR can verify that all a developer’s code is type-safe. Type safety makes certain that allocated objects are constantly accessed in compatible ways. Consequently, if a method input parameter is declared as accommodating a 4-byte value, the CLR will detect and lock out endeavors to access the parameter as an 8-byte value. Likewise, if an object uses 10 bytes in memory, the application cannot force the object into a form that will permit more than 10 bytes to be read. Type safety also means that execution flow will transfer only to recognized locations. There is no way to create an arbitrary reference to a memory location and cause code at that location to initiate execution. Collectively, these actions ensure type safety eradicating many common programming errors and classic system attacks like exploiting buffer overruns (Microsoft, 2004a).

Rich debugging support

Because the CLR is used for numerous programming languages, it is now much simpler to employ segments of an application using the language best fitting to a specific task. The CLR completely supports debugging applications that traverse language boundaries. This is a feature that has been new to programming concepts (Microsoft, 2004a).

Consistent method failure archetype

One of the most frustrating characteristics of Windows programming is the unpredictable style that functions use to convey errors. Various functions report Win32 status codes, some functions return HRESULTs, and other functions throw exceptions. Inside the CLR, every failure is reported using exceptions only. Exceptions permit the developer to isolate the failure from the code then allow clean-up code to finish. This departure from previous error handling significantly simplifies writing, reading, and maintaining code. Additionally, exceptions work across module and programming language boundaries. And, dissimilar status codes and HRESULTs, exceptions cannot be disregarded. The CLR also supplies built-in stack-walking facilities, allowing it much easier to trace any bugs and failures (Balena, 2002).

Security

Conventional operating system security offers isolation and access control centered on Windows user accounts. This method has demonstrated usefulness; however, at its core, it assumes that all code is uniformly trustworthy. This assumption was acceptable when all code was installed from physical media or trusted organizational servers. However, with the growing dependence on portable code such as Web scripts, applications downloaded over the Internet, and e-mail attachments, programmers need ways to manage the activities of applications in a more code-centric way. Code access security provides a means to accomplish this (Balena, 2002).

Interoperability

Microsoft understands that developers already have a massive quantity of existing code and components. Revising all this code to take full benefits of the .NET Framework platform would be a colossal task and would thwart the rapid implementation of this platform. In response to this, the .NET Framework fully supports the capability for the developer to access their existing COM components as well as call Win32 functions in existing DLLs (Balena, 2002).

End users will not directly understand the CLR and its abilities, but they will surely become attentive of the value and features of applications that make use of the CLR. Additionally, users and organizations bottom line will welcome how the CLR permits applications to be developed and deployed more quickly and with less management than Windows has ever permitted previously (Balena, 2002).

Visual Studio.NET

Overview

The Microsoft .NET Framework Software Development Kit (SDK) incorporates everything developers need to write, build, test, and deploy .NET Framework applications and provides to documentation, samples, and command-line tools and compilers. This SDK is free of charge and available on Microsoft’s website. Command-line compilers are difficult to use even for advanced programmers. Many third-party software companies have developed front-end Graphical User Interfaces (GUI) to make development a lot easier for programmers. GUIs are Window driven interfaces that provide simple point, “drag and click” methods to perform functions. Microsoft sells their own GUI dubbed Visual Studio.NET to developers for them to enjoy the full benefits of the framework (Microsoft, 2004d).

Microsoft initially released Visual Studio.NET in 2001 under the name Visual Studio.NET 2002. The development package was shipped with .NET Framework 1.0. The package supplied great functionality, however, being an initial product for a new technology; changes were needed to address developers concerns and more flexibility was needed. Microsoft responded by updating many classes in the framework and released .NET Framework 1.1 in 2003. Visual Studio was revised to match these improvements and released the current version, Visual Studio.NET 2003. By doing this, end users must update to .NET runtime 1.1 to be completely compatible with the changes (Microsoft, 2004d).

Visual Studio.NET 2003 offers many functions to assist the developer. These functions aid programmers to build applications speedily inside the platform. This is known as Rapid Application Development (RAD) (Oancea & Donald, 2002). Some of the GUI driven functions included in the package will be discussed.

 Design Window

The design window is used when a developer is graphically constructing an application by means of the Toolbox to drag and drop objects onto the window. Like the code window and browser, the design window cannot be docked or set to Auto Hide. The design view can be split or have tab groups added to it. Splitting the window helps when programmers need to evaluate the code from two separate files. The design view can be described as the graphical output of what the user will see. User controls can be placed or drawn in this window from the toolbox much like a newspaper layout (Oancea & Donald, 2002).

Code Window

The code window is much like the design window. However, there is no toolbox functionality within the code view and users cannot drag and drop objects from the toolbox and into the code view. When an object is placed into the design window, the code is automatically placed into the code window to support the object. Object methods, events, and properties are accessible through the code window. Code can be typed in this window to build the application or text can be cut and pasted from another source much like is done in Microsoft Word or other word processing software packages. Errors in programming syntax will be highlighted as a mistake make be made or upon an attempt to compile the code (Oancea & Donald, 2002).

Server Explorer

The Server Explorer has been named one of the best features in VS.NET. From this window, programmers can connect to a server on the network and have full access to that server. Developers can also link to any database servers that may be on the network. Overall, programmers can connect to database connections, IIS servers Crystal Reports, event logs, message queues, performance counters or any Window service that may be active (Oancea & Donald, 2002).

Toolbox

The Toolbox includes Data, Components, Web Forms, and Window Forms objects that can be dragged and dropped into the Design View window. Each object in the toolbox appears as icons much like many users are familiar on the Windows Desktop. Additionally, programmers can customize the Toolbox by adding their own code fragments and renaming them to something to their liking. Third party objects or controls that are available for .Net will appear in the toolbox as well. The toolbox allows programmers to build the Design Window at a rapid pace, where manual insertions would take extended time (Oancea & Donald, 2002).

Docking Windows

One of the features for VS.NET that was not available to previously released programming GUIs is docking windows. These can allow programmers to dock or expand or collapse all the windows within the view of the IDE. To add windows to the IDE, programmers can maneuver to the standard toolbar and select view; here they can select all the windows that are desired to have immediately available in the IDE environment. The auto-hide feature of each window makes them glide off the display and affix in the side when they are not needed. This allows developers to have maximum code view but have all windows at hand (Oancea & Donald, 2002).

Properties Explorer

The Properties Explorer is a table that contains existing attributes for a selected object. The right-hand column displays the property names, and the left-hand column stores the attribute’s value. The Properties Explorer can be organized by either categories or alphabetically. Some properties are editable and some are not. Any changes made in this window will be transferred to the design view and code view windows, correspondingly (Oancea & Donald, 2002).

Solution Explorer

The Solution Explorer is a list at all the files in a project solution. The Properties option lets developers view and edit all the solutions’ properties, as well as debug parameters options. The .NET GUI has two different types of containers offered for retaining objects, solutions, and projects. The main difference between the two is that multiple projects exist within a solution, while the project container retains merely files and items within files (Oancea & Donald, 2002).

Object Browser

The Object Browser will give the entire list of all classes’ methods and properties in a solution. The whole solution is listed, and it is rather profoundly detailed. If developers want, they can look up parents of classes that they are utilizing and list out the methods and properties at their choosing. Using the Object Browser allows developers to navigate within the entire solution quickly (Oancea & Donald, 2002).

Dynamic Help

The Visual Studio .NET Dynamic Help Window provides real-time, contextually pertinent information about an assortment of essentials and topics throughout the software creation progression. This information is shown within the Dynamic Help Window, available by selecting the dynamic help option from the help menu. There are three chief components to the default Dynamic Help Window, the contents button, the index button, and the search button. Anyone of these buttons will launch the full Visual Studio .NET Help File Collection in the proper mode. The Dynamic Help Window can be described as a sequence of quick links to direct the developer where to find more detailed information about their chosen topic (Oancea & Donald, 2002).

Task List Explorer

The Task List allows developers to add tasks that need to be completed and to categorize them in several different ways and with priority. An additional element of the Task List is that it will generate tasks on-the-fly as programmers’ debug applications by marking down any errors (Oancea & Donald, 2002).

IntelliSense

IntelliSense is a method of code completion that has been part of most Microsoft developer tools for several years. Code completion technology assists when users start to type a tag, attribute, or property by presenting the resulting ending so that users will not have to type out the complete item. This feature assists greatly in rapidly entering source code (Oancea & Donald, 2002).

Visual Studio.NET Pricing

There are currently four editions of Visual Studio.NET 2003 that can be purchased from Microsoft. The least expensive version is the Academic Version. This is a basic version that is suited fit for students and instructors. This package sells for $99 USD and is available through Microsoft or at various schools and universities. There is a small collection of visual tools that comes with the package for the student to gain some familiarity with the programming environment (Microsoft, 2004b).

Users that would like to purchase a more robust version of the package can purchase the Professional Special Edition. This version has an estimated retail price of $799 US. The Professional Special Edition makes it possible for developers to rapidly generate data-driven Web applications using well-known Visual Basic methods and dozens of reusables, browser-independent Web controls. Web applications assembled using Visual Studio .NET gain from superior performance, dependability, security, and scalability (Microsoft, 2004b).

Development teams can purchase the Enterprise Developer version of Visual Studio.NET for $1,799 US. This includes the features in the Professional Special Edition and includes bonus resources for enterprise development teams constructing mission-critical applications that are directed at any device and incorporate with any platform (Microsoft, 2004b).

The Enterprise Architect version also sells for $1,799 US. Visual Studio .NET 2003 Enterprise Architect builds on the strength of the Enterprise Developer version by adding extra capabilities for designing, specifying, and communicating application architecture, development best practices, and application functionality (Microsoft, 2004b).

.NET vs. J2EE

Microsoft’s Visual Studio .NET and the .NET Framework has just one rival technology in the market. Sun Microsystems launched Java 2 Platform, Enterprise Edition (J2EE), a Java based cross platform endeavor. The J2EE platform makes things easier for developers to create applications by centering them on standardized, modular components, by supplying an absolute set of services to those components, and by managing countless of application performance automatically, without complicated programming (Sun Microsystems, 2004).

Although both technologies have similar objectives, there are some advantages that each has over the other. Unlike .NET, J2EE already runs on any operating system that can use java technology. J2EE has a proven track record and is further along in the maturity process then .NET. J2EE has more enterprise features for session management, fail-over, load balancing and application integration and is preferential by experienced enterprise retailers such as IBM, BEA, SAP, and Oracle (Computerworld, 2004).

On the downside, J2EE has a complex application development environment that makes it difficult for a user to master. Additionally, the tools within the J2EE GUI are difficult to employ. J2EE is also reported to be costly to build, deploy and manage applications. J2EE also lacks built-in support for Web services standards that makes it awkward to deploy web applications (Computerworld, 2004).

The advantages of .NET are that is has Easy-to-use tools within its GUI to increase programmer efficiency. Unlike J2EE, .NET can use multiple programming languages. .NET also has excellent support for Web services. Companies will find that the cost of developing projects will be much less expensive than J2EE (Computerworld, 2004).

The disadvantages of .NET are that it is a fairly new technology that lacks maturity. Users of previous Microsoft programming language tools and technology face a potentially steep learning curve since so many changes have been incorporated in .NET. This also makes conversions from legacy languages to .NET timely. Furthermore, the .NET runtime is not available on every operating system yet (Computerworld, 2004).

Doculabs is an independent research and consulting firm that improves the way companies plan for, select, and optimize emerging technologies through project-based services. The firm measured the performance of J2EE and .NET to determine which platform ran Web service applications more efficiently. After extensive testing, the company concluded that Microsoft .NET offered the best performance among the two products evaluated in all tests performed. The firm attributed the superior performance results for .NET were due to that Web Services were an integrated component of the core .NET framework from the start, and not supplementary features on top of an existing framework as with J2EE (Doculabs, 2003).

Conclusion

As corporations are looking for diverse programmers that can use multiple languages, the demand for a single programming platform has never been higher. Visual Studio .NET provides flexibility and rapid development functionality to Microsoft’s .NET Framework. As the demands by developers increase, Microsoft will continue to advance Micsrosoft.NET to meet and exceed these needs.
References
Balena, F. (2002). Programming visual basic.net. Redmond, Washington: Microsoft Press.
Computerworld. (2004). Pros & cons: .Net vs. j2ee. Retrieved October 3, 2004, from http://www.computerworld.com/developmenttopics/development/story/
Doculabs. (2003). @Bench web services performance benchmark. Retrieved October 19, 2004, from http://www.doculabs.com/docs/reg/
Grote, D. & Nichols T. (2000). Microsoft: Through the years. Retrieved October 4, 2004, from http://wwwshs1.bham.wednet.edu/curric/socst/wa/Micro.htm
Microsoft. (2004a). Common language runtime overview. Retrieved October 3, 2004, from http://msdn.microsoft.com/library/en-us/cpguide/html/cpconcommonlanguageruntimeoverview/
Microsoft. (2004b). How to buy Microsoft developer products. Retrieved October 18, 2004, from http://msdn.microsoft.com/howtobuy/vstudio/
Microsoft. (2004c). Overview of the .net framework. Retrieved October 3, 2004, from http://msdn.microsoft.com/library/en-us/cpguide/html/cpovrintroductiontonetframeworks/
Microsoft. (2004d). Using Visual Studio .NET. Retrieved October 26, 2004, from http://msdn.microsoft.com/vstudio/using/default.aspx
Oancea, G. & Donald B. (2002). Visual basic.net: By example. Indianapolis, Indiana: Que.
Sun Microsystems. (2004). J2ee Overview. Retrieved October 25, 2004, from http://java.sun.com/j2ee/overview.html

The post Visual Studio .NET appeared first on Michael A. Hartmann.

The Just-in-Time (JIT) manufacturing and inventory system is a philosophy that strives to eliminate wastes and be effective in lowering production costs. Inventory is supplied only when needed from start to finish. JIT requires the total cooperation of the entire company from the top executives to the common factory worker. Suppliers must also be included in the system to ensure that materials are shipped exactly when needed. Only when this is accomplished can a company successfully execute JIT inventory principles.

Just-In-Time Inventory

Introduction

Just-in-Time (JIT) is a widely used inventory system that is used throughout the world. The system is put into operation to enrich the Return on Investment (ROI) of a company by diminishing in-process inventory and its related overheads. In basic terms, JIT is a manufacturing structure which is designed to produce only the needed units, in the required amount at the obligatory time that upholds desired level of quality standards. It is a movement that is intended to attain excellence while diminishing or eliminating waste (Agility Centre, 2000).

The system requires the involvement of all employees from executive management to the factory worker. JIT is a long-term commitment that may take time and practice to achieve optimal results. All employees must be trained on the attributes of JIT for the system to reach its potential. The fundamental attributes if Just-In-Time manufacturing state the following (Agility Centre, 2000):

• Customers can receive what they desire when they need it with no added consequences or hassles.
• Continuous improvement is necessary to remain competitive to offer customers the best possible solution.
• Customers are the motivation for the company being in existence, and they deserve to receive a faultless product or service.
• All process bottlenecks and buffers are inefficient and need to be purged from the system.
• Employment within a JIT company consists of resolving increasingly challenging issues in a multi-skilled, cross-functional team atmosphere.

To absorb a company into the JIT philosophy, the company must first be prepared to develop basic strategies. Companies must be aware that Just-in-Time has total authority in ordering, scheduling, and producing aspects of a manufacturer. The success of this system in a manufacturing company is dependent on employees, suppliers, and customers. The system solely relies on a partnership between all elements of the manufacturing chain. A break in the chain can result in a total collapse in the JIT system if it is not remedied. Some of the elements of a strategy can be as follows (Agility Centre, 2000):

• Know the customer and their desires, recognize value-added activities and functions.
• Focus all the company’s processes around the value flow of activities.
• Bring into line the company to the requirements of all customers.
• Actions that are excessively timely, assets and excess space that do not to the customer’s requisite are non-value added and must be condensed or eradicated.
• Institute performance measurements in all facets of the value stream.

The most important aspect in JIT is implementing the empowerment of the workers. A company that empowers its employees provides them with the authority to resolve issues on their own. When this is available, workers will be properly trained and have the power to halt production to work out problems, as an alternative to depending on the direction of supervisors. The purpose of worker empowerment is obtaining employees that are engaged in problem-solving at the shop floor level (Agility Centre, 2000).

History

Fredrick Taylor is attributed with developing the fundamentals of JIT by presenting his scientific management ideology to the manufacturing community. His methodology for operational blueprint effectiveness encouraged manufacturers to look at means to improve systems to boost production at reduced costs. Furthermore, Taylor acknowledged the erroneous technique of extending tool life as a substitute for slashing production rate. Consistency and superlative procedure operations are also essential ideologies of scientific management. Taylor also thought that best practice operation effect enhancements to all related operations in the business (Strategos, 2005).

Henry Ford and Charles E. Sorensen shaped the first comprehensive manufacturing policy in 1910. They assembled all the rudiments of a manufacturing scheme comprising of employees, equipment, tooling, and products and structured them in a continuous technique for fabricating the Model T automobile. Ford was so remarkably triumphant using this scheme that he rapidly developed into one of the world’s richest men and massed produced vehicles to the world. Ford is regarded as by countless industrialists to be the earliest creator of Just in Time Manufacturing (Strategos, 2005).

After World War II, Japanese companies embarked to examine American manufacturing procedures such as the structure employed at Ford Motor Company. Toyota Motor Company took scrupulous regard to Henry Ford’s system and Toyota’s Taichii Ohno and Shigeo Shingo commenced to integrate Ford’s policies. Nevertheless, they quickly recognized that the Ford system had countless imperfections that needed to be enhanced to operate efficiently in the industry that existed after World War II. The Ford System did not consider the sociological facets of the workplace and was thought to put insignificant importance on the contributions that could be generated by company workers. Toyota embarked to define a total system that would be able to be used at all levels and fabricate higher quality parts at reduced costs. They also acknowledged the vital function of inventory. This system was soon christened the Toyota Production System (Strategos, 2005).

As the western world observed the accomplishments of the Toyota Production System, an assortment of American corporations attempted to imitate Toyota’s system with varying results. In 1990 an American, James Womack distributed a manuscript called “The Machine That Changed the World”. Womack’s writing was a straightforward account of the history of automobile manufacturing mixed with a study of American, Japanese, and European automotive production facilities. The outcome of the book was the creation of the expression “Lean Manufacturing”. Lean Manufacturing caught the awareness of companies all over the world. Lean Manufacturing methods are now widespread throughout the world. The expertise and knowledge base are mounting quickly. “Just-in-Time” is another term for Lean Manufacturing (Wikipedia, 2005).

JIT Process

Just-in-Time system centers around activities in the factory. Events in the factory effect how the company is going to execute their inventory levels, costing, and pricing schemes. Therefore, JIT suggests that it is the factory that must be able to implement the bulk of the responsibility for the company to be successful. Moving products quicker with smaller lot sizes and minimal waste is the key to achieving consistent job flow. Consistent job flow enables the company to run smoothly. This is achieved by implementing a Kanban system and a pull system (Agility Centre, 2000).

Kanban is the Japanese term for “card”. Kanban is a clear-cut parts movement configuration that depends on cards and containers to transport parts from one workstation to another in a manufacturing setting. A Kanban card refers to a set quantity of production or dimensions of a container and denotes information that consists of a part number, nomenclature, the type of the container, unit load, preceding station, and the subsequent station. The foundation of the Kanban model is that a company should only dispense components to the production line as and when they are necessary so it does away with storage in the production region. In this manner, each unit can be tracked and Work in Process (WIP) can be tracked more efficiently. Items that are not required to process products should be completely moved from the area to avoid confusion or delays. It is important that the areas are continued to be clean to avoid any pitfalls (Agility Centre, 2000).

One common method to control factory space is to construct cellular layouts. This is made up of manufacturing cells or work-cells that consist of different machinery grouped together to manufacture a specified category of products in a specific stage. These Cells are situated in relation to each other so that material movement is as little as possible. This allows materials to be tracked as well as WIP and finished products (Najarian, 2002).

Conventional manufacturing processes are structured by functional areas into plant divisions. This system dictates in the case of a PCB manufacturing company that all wave soldiers are in one department, all component placement machines in another, PCB wash machines in another and onwards. Typically, employees are situated down straight lined fashioned production lines and produce products in hefty batches or lots. Batch production describes a process that carries out all the order and then shifts it to the subsequent process for more processing (Najarian, 2002).

JIT cellular organization provides the opposite process. Production is controlled by product in contrast than by function with equipment committed or somewhat committed to a family of products. Production in cells is accomplished consecutively in the sequence in which a process should be executed to manufacture the end item. Employees in this kind of system are near one another and are completing processes on lots of one (Najarian, 2002).

Cellular production consists of the following characteristics (Najarian, 2002):

• Product family focus. Product family grouping and layout are what comprise a work cell driven plant. Equipment is devoted to the product line.
• One at a time production. A lot size of one is what results in overlapping operations. In this setting, the subsequent process is established right after the part comes out from the previous process. In this manner, the company produces a batch of one piece.
• Flexible output levels. To appreciate the benefits of JIT, work cells loosen the output level to the final level of demand by the customer regardless if the customer is the ending user or a subsequent work cell. All work cells must maintain their output levels harmony to keep away from batch production.
• Operator multi-tasking. Work cell operators characteristically control more than one machine at the same time. In this situation, the operator is frequently administering alike machines making dissimilar parts.
• JIT defines certain goals during the production of products from start to finish. These goals ensure that the process flow is running evenly and consistent as possible. These defined goals are as follows (Hendrickson, 2005):
• Zero Defects. If quality is not 100%, production is in discontent. In legacy manufacturing systems, companies believed that zero defects production was not likely and not essential. Previously it was the attitude of companies to be content with meeting the expectations of their customers. JIT strives to eliminate the potential for defects and exceed customer expectations.
• Zero Set-up Time. Reducing the set up-times results in an increasingly even production level. Zero set-up time also generates shorter production time and production cycles, and fewer required inventories. Under JIT set up times should be insignificant. This necessitates either exceptionally rapid changeover to minimize the effect on production or the accessibility of additional machines previously set up. Fast changeover allows small lot sizes to be sensible and permits an extensive selection of parts to be made regularly.
• Zero Inventories. Inventories, as well as WIP, finished goods, and sub-assemblies, must be exhausted. This is a polar standpoint from traditional manufacturing, where inventories are perceived as a buffer against a variable demand, or as a buffer to augment unreliable vendors. Simply inventory is considered a liability. Every effort must be used to eliminate it.
• Zero Handling. This means purging all non-value adding actions. Design is the first phase in manufacturing and is consequently the single most significant factor in both manufacturing costs and labor requirements.
• A Lot Size of One. A lot size of one enables a company to be dynamic when demand is varying. Lots should be used for immediate needs only. A minimum replacement quantity is preferred for both manufactured and acquisition parts.
• Zero Queues. Manufacturing queues need to be eliminated under JIT principles. When problems arise, workers can recognize the reasons and correct them. The correction procedure is assisted when queues are small. If the queues are small, it reveals problems before they can affect additional products.

The JIT system promotes the pull production system. The pull system is modeled after the retail system. In retail, products are supplied based on relies on customer demand to pull products all through the inventory system. Shelves are stocked according to the current demand of customers. In the same fashion, the JIT pull system states that workers will only take those parts or materials are required and can be handled without interruption. This is dissimilar to the conventional push system which develops demand forecasts to begin assembly and inventory designs. Pull systems have fewer bottlenecks and are inherently less problematic to manage than usual push systems (Najarian, 2002).

JIT Planning and Control

For a company to begin to produce a strategy for producing a product under JIT, they must establish a production schedule. The Master Production Schedule (MPS) provides the governing schedule that all products will be manufactured under. The MPS regulates the amount of each product to be completed each week of the short-term planning scope. The MPS is also a plan for the outlook of the expected manufacture of end products. The MPS regulates its production timetables centered on a forecast, orders, and lot size (Hendrickson, 2005).

Following the creation of the Master Production Schedule, a company should determine how they will plan and control the inventory needed to assemble the product. This includes ordering the right amount of material needed to assemble the product and the costs associated with them. The company must be sure that all required machines are purchased and in place in their respective work cell configurations. Manufacturing floor schedules like machine changeovers and workforce schedules should be determined to compute the amount of labor and associated overhead that will be directly linked to the product. Indirect overhead should be included to give an accurate cost that will be charged to the costs for production (Hendrickson, 2005).

Ordering materials under a JIT system involve having the knowledge of what to order and when to order. It also controls supplier selection which determines the elimination of suppliers. There are some concerns with companies with relying on one primary vendor to supply materials for a project; however, it is becoming increasingly common in JIT to use the single vendor all the times. Using the same vendor is essential to building up a relationship with vendors, to guarantee long-standing relations. This long-standing relationship is crucial since, in a pull system like JIT, the materials are obtained or delivered for by customers as required. If the buyer has any predicaments, then the supplier must react to that. In the case that a supplier has issues, then the buyer is affected and production ceases. There are three vital ingredients in the capability to forge a relationship with suppliers. These ingredients are trust, communications and time and visibility (Hendrickson, 2005).

Trust is the essential element to need to supply constancy among a company and its supplier. Having a high level of trust will help mold the two companies together that will result in benefiting them both. When two companies are on the same page, any problems or special circumstance can be taken care of quickly (Najarian, 2002).

Communications between the two companies are also vital. Suppliers have two mechanisms to cope with communication. They are Supplier Contact and Supplier Programs. Supplier Contact is the point of contact that a company can get in touch with in any situation. The benefit of this is that it offers a formal communication conduit for the supplier and consequently diminishes any potential miscommunication. Supplier Programs keep the supplier up to date on matters of reciprocal concern or anything that may alter supplier’s production quality or level. These programs offer important knowledge of each company’s requirements and needs (Najarian, 2002).

Time and visibility allow the partnership to respond to variations in customer demand that can fluctuate. Changes occur that may call for additional equipment, training, or workers, modifying working shifts, purchasing materials, and so forth. With time visibility suppliers may possibly react more rapidly to required adjustments (Najarian, 2002).

Once partnership with suppliers has been established, it is the company’s responsibility to control their inventory and production schedules. There is always a chance that expected product flow will require a high level of control once implemented. Bottlenecks or delays in manufacturing at a certain point are always a threat to JIT (Hendrickson, 2005).

One way to eliminate that threat is to execute the Theory of Constraints (TOC) system. The TOC is a system to remove restrictions in a manufacturing setting. TOC manufacturing planning and control system, assisted by a computer software program named OPT. OPT analyzes the manufacturing process and works in the following way: The amount of work that must be done at a workstation is inputted into the system. The software discovers the bottlenecks of the process. If it is required that a product must be passed through multiple product workstations, TOC reveals which workstation is the bottleneck. This aspect is central because the capacity of the slowest workstation is the capacity of the production line. The slow workstation point is then focused on to improve capacity. As the production rate of a bottleneck improves, the output of the factory increases until it is no longer considered a bottleneck. Another term for this method is called synchronous manufacturing and is essential to establishing the workflow of a JIT system and controlling inventory (Hendrickson, 2005).

As the process flow is clear of any bottlenecks, the company can focus on maintaining an optimal inventory program. The impact of JIT’s inventory results from three interconnected events. The first deals with a spotlight on product and process quality. The implementation of analytic tools and the incorporation of direct labor into quality enhancement plans have a considerable impact on inventory levels. Analytic tools are employed to identify the cause of defects, regardless of these problems begin in defective assembly practices, materials, or materials design. These tools turn out to be even more potent when their use is coordinated by direct workers in production and logistics whose expertise and familiarity is exploited by quality teams. As causes of shortcomings are recognized and resolved, product quality enhances the number of quality control inspectors lessen, and the quantity of scrap and rework inventory is reduced (Droge, 1998).

Decreases in WIP inventories result in a diminished requirement for safety stock established upon anticipated defect levels in inventory. Safety stocks of finished goods may perhaps also deteriorate because the anticipated defect percentage is lower. Given that products are of a superior quality, the quantity of subsequent sales service repair work falls off. This leads to prospective decreases in the number of emergency parts stocked in inventory (Droge, 1998).

The second source of JIT’s inventory impact is situated in the redesigning of internal plant processes. Cellular work cells are used to enhance the process flow as previously designed. Direct workers at a specific cell should be required to control several different machines. Cellular layout condenses the amount of travel that inventory in the plant. Currently, JIT embraces pull support, reduced machine set-up times, and total preventive maintenance. Under pull support, inventory is made accessible only when the subsequent workstation requires more inventory in a specific quantity. Reduced machine set up time allows quick change over rates from one product to another. The objective of total preventive maintenance is having equipment constantly running when they are supposed to (Droge, 1998).

While combined, the outcome of cellular layout, total preventive maintenance, reduced machine setup times, and pull support on inventory quantities is substantial. While these essentials can be applied devoid of an overreaching JIT viewpoint, their synergy provides their definitive outcome on inventory levels. For example, materials travel shorter distances within the facility, produce a decrease in internal distribution cycle span and inconsistency. The effect is a reduction in inventory for unexpected internal distribution setbacks. Given that machines operate when they are supposed to, less inventory is necessary to support machine failures. Pull support ties the amount manufactured to the amount required, prompting production simply when following stations require inventory. Reduced machine set up time pushes lowered lot sizes that will outcome in a lowered average inventory on hand (Droge, 1998).

The third and final inventory associated component of JIT is exchange with suppliers. Nearby suppliers can cut down incoming supply lines, dropping equally the length and the inconsistency in delivery cycles. This eventually shrinks the amount of inventory required to account for overdue or partial distribution. Overdue delivery is additionally influenced by the buyer giving out production plans and schedules with suppliers. Collective buyer and seller product plans will enhance the number of people undertaking quality concerns and improve the prospect of design for manufacturability. The outcome trickles down throughout the buyer’s logistics chain, promoting lower inventory levels. Far-reaching supplier evaluation programs eliminate less dedicated suppliers to preserve only those competent enough to provide elevated quality materials on schedule. Single sourcing can lead to fewer distribution cycles that require management. When this is pooled with broadly based supplier appraisal, retention of nearby suppliers, and improved buyer-seller communication, inventory levels ought to decline (Droge, 1998).

Even in an established JIT system, inventory and assets can become excessive. JIT dictates that all unneeded material and assets be eliminated. Therefore, inventory liquidation ought to be a continuing practice that should be managed by a specific employee in the company. This person is commonly referred to the dead stock coordinator. After getting the list of discontinued products and assets with surplus inventory, this employee ought to establish the finest scheme of liquidation. This is going to be the process which provides the most value to the company. The process consists of that person going through the list, calculating each technique of liquidation in order of suitability, until they liquidate the material (Schreibfeder, 1998).

There are several methods of liquidation. Commonly the best method is to transfer the surplus to another company place where the inventory is desired. A product may be discontinued in one location, but still functioning in another location. This selection is predominantly appealing if the rate of moving the asset among locations is a small portion of the value of the item. Another common method is to trim down the price to move the surplus inventory. Companies find creative ways to reduce inventory but also may choose to sell the surplus to other companies, donate it to a nonprofit organization, sell excess finished products to a surplus retail store chain, or even throw it away. Whatever method a company chooses, JIT principles suggest that excess and waste must be removed to be successful (Schreibfeder, 1998).

Conclusion

To make a Just-in-Time inventory program to become the success that a company desires, all facets of the company must work together. JIT is a total commitment philosophy that affects everyone from the CEO to the common worker. With the changes properly made, JIT inventory will help reduce waste and in turn will lower costs, raise profits and quality, and improve relations with suppliers as well as customers. If a company does not totally embrace the JIT concept, the system is sure to fail.

References

Agility Centre (2000). Just-in-time Retrieved September 8, 2005, http://www.agilitycentre.com/best%20practice/JIT.PDF
Droge, C. (1998). Just-in-time inventory effect. Retrieved August 16, 2005, from http://www.findarticles.com/p/articles/mi_qa3705/is_199801/ai_n8781524/print
Hendrickson, W.F. (2005). Just in time production (JIT). Retrieved August 15, 2005, from http://members.aol.com/williamfla/jitprod.htm
Najarian, G. (2002). Manufacturing in the new millennium. Retrieved August 18, 2005, from http://www.remgrp.com/jitarticle.htm
Schreibfeder, J. (1998). Liquidating non-moving inventory. Retrieved August 15, 2005, from http://www.effectiveinventory.com/article14.html
Strategos. (2005). Just in time, toyota production system & lean manufacturing. Retrieved August 25, 2005, http://www.strategosinc.com/just_in_time.htm
Wikipedia. (2005). Just in time. Retrieved August 14, 2005, from http://en.wikipedia.org/wiki/Just_in_time

The post Just-in-Time Inventory appeared first on Michael A. Hartmann.