b) The lower capital intensity of the mentioned type of firms is explained by the stability of working processes when serving a focus customer. Crews do not need retraining because they do the same thing, for the same customer, all of the time. The machinery factor is also to be regarded: for example, the folding and gluing machine at Focus Packaging handles only one size box, so it never has to be reset. The press stops only to install a new roll of the thin cardboard on which it prints .
a) The necessity of the firms with a product focus to plan production and inventory levels further into the future is explained by the vitality of the production plan and inventories for successful supply chain management. It is necessary to plan thoroughly the production basing on the demand forecasts and according to this to make up the corresponding inventories. For the firms with focused production it is especially essential, because their performance depends on demands of particular customers, or one major customer .
b) All the above mentioned relates also to the necessity to have more formalized supplier relationships. ...Show more