Smartville: Extras (3)

Basic Complementarities Afforded by MCC’s Performance of Final Assembly
The centrality of MCC and the Smartville information system means the manufacturing process resembles a closed loop/MRP system. The following table reports the benefits of MCC’s acting centrally by performing the final (main) assembly:

Benefits to SuppliersMCC Perspectives
Suppliers report to a central actor.Coordination.
MCC arbitrates in event of inter-supplier dispute.Centralization of authority.
Suppliers stand to obtain capability benefits by meeting MCC’s standards and learning from other suppliers’ methods of meeting those standards.  By enforcing quality and unifying objectives, MCC pressures suppliers into committed relationships, both with MCC and between the suppliers, elevating the standards of all.
Avoidance of friction/competition with other suppliers.Prevention of titular rights disputes / legal issues regarding ownership of materials once out of supplier’s hands.
Suppliers might lack assembly skills, resources, etc.MCC’s core competence will be assembly.
Handling of other supplier’s components would incur hazard – in event of breakage during assembly, who compensates who?Assumption of responsibility for the crucial, pivotal stage of aggregation.  
Absence of MCC from the assembly line or assembly by a third party would add another layer of management costs.Presence of MCC on assembly line is a pre-emptive and active cost-saving measure.
Central presence of MCC avoids expense involved in training and employing assemblers in Smart Centres or on other supplier’s premises.Cross-skilling of supplier personnel likely to be difficult, especially if assembly was done outside Smartville, i.e. in Smart Centres or regional sub-plants.
Final assembly by MCC relieves suppliers from administrative and coordination-related burdens, allowing leanness that should contribute to price lowering and better service.On-the-spot presence of MCC in a central location has both practical and control effects – e.g. haste reduction and consolidation of tools.
Suppliers do not have to take an unfair proportion of assembly work, which would complicate job descriptions, statements of work, and billing.MCC undertakes assembly work that would otherwise be passed to a third party or delegated between the suppliers – a complex, expensive and potentially divisive task.
Suppliers can concentrate on their core competencies.Speedy assembly methods are a source of competitive advantage that would benefit suppliers and challenge MCC if unregulated or excessive spill over were to occur.