Presentation on theme: "Puttick Grid Introduction"— Presentation transcript:
1Puttick Grid Introduction The Puttick Grid was developed by John Puttick, originally at PA Consulting and subsequently at the University of Warwick, and first published by the DTI in ‘Factory for the Future’ (1995). The Grid was introduced as a methodology through which a manufacturing or service company could develop an operational strategy which was wholly aligned to delivering specific customer values. To this end, the Grid assists companies to evaluate:How does the market view a company’s product-market arena todayHow will the market view a company’s product-market arena tomorrowThus the company is able to prepare its strategies and plans in the light of the how the customer views and appreciates the products it wishes to acquire and the characteristics of the acquisition process, rather than how the organisation views its own products, strengths and weaknesses.Product families are placed in one of four categories:Super Value GoodsProducts/Services with time-limited windows of opportunity (e.g. fashion goods, spares)Consumer DurablesCommoditiesPlacement is based on two key criteria:Uncertainty: Driven by changes in factors such as specification, quality, process reliability, level of demand, external influences (e.g. politics, weather), fashion changes, supply changes, competitors’ actions etc., which typically cannot be forecast with certaintyComplexity: Determined by numbers of products and variants (including customisation), layers in bills of material, tiers in supply chain, purchased items, suppliers, contractors, processes, and transactions
2Puttick GridSuper Value Goods: Highly complex products, specific requirements for which are highly uncertain. The lifecycle of these products is generally long, with up-grading and re-fitting common. Industries which best fit within this category are aerospace, defence, heavy electrical equipment and railway equipment. Differentiation is based on fitness for purpose and service support.Fashion / Spares etc.: These products are categorised by suddenly high demand, rapid depreciation and high rates of obsolescence, or the products are suddenly needed and demand is immediately fulfilled. Industry sectors which fit within this category are food and drink, cosmetics, mobile phones and emergency calls on contractors such as builders, plumbers and electricians. Emotional appeal and time to market within a limited window of opportunity are key methods of differentiating fashion or spares products.Consumer Durables: For consumer durables there is a medium term lifecycle with a strong focus on a second hand market. Industries such as automotive, white goods and machine tools fit within this category. Value for money and availability are important differentiators for the consumer durables products.Commodities: These products are generally consumables which can be recycled such as simple components, paper, primary metals and glass. Price is the key differentiator of commodity products.The underlying concept behind the Puttick Grid is understanding the product families from the customer’s point of view. Customer perceptions of products will determine where the product is placed in the grid:ComplexityUncertaintyHighLowRequirements present a real challengeFew other suppliers have the capabilitySome risk of failure must be acceptedExpect to pay for the privilegeOwning one will raise my image“I must own one”Prepared to pay for exceptional serviceRare capability that is urgently neededCan put us ahead of competitorsRecognised as good makePlenty of choiceNot expected to pay silly pricesWell proven products / servicesService exceeds expectationsFunctionality satisfies needsPrepared to pay for something extraNumerous alternative suppliersRequirements easy to satisfyExpect low price todayExpect even lower price tomorrowService and quality are given
3Puttick GridProduct positioning should be used to ensure that all business processes and requirements are aligned, including business imperatives:Super Value Goods: leading edge technology; strong design and development;Fashion / Spares: market vision; rapid time to market;Consumer Durables: effective supply of defined product range; brand management;Commodities: low cost supply to wide customer baseProduct ComplexityUncertaintyHighLowMachine ToolsPower Gen. EquipWatchesMobile TelephoneTrainersLight BulbsMetal WindowsAll aspects of the business should be focused on delivering the value ‘specified’ by the customer; including, values and behaviours, skills, manufacturing technology (process, plant and equipment), supply chain management and financial configuration. However, positioning is not static and can change over time, for example:Broadly, there are three classes of strategies companies can adopt as a result of these evaluations:Compete as a commodity providerDifferentiate their product(s) further in a specified quadrantCreate the means to move their product(s) ‘back up’ the Grid.
4Puttick Grid Instructions Further Information Overview: Turner, S., 2002, ‘Tools for Success: A Manager Guide’, McGraw Hill Professional, Berkshire, UKIn-depth: Warwick Manufacturing group, University of WarwickInstructionsThe Puttick Grid on the next page may be used to capture your organisations product families from the customer’s point of view.