Page 253 - Performance Leadership

242 • Part IV Implementing the Performance Leadership Framework

F igur e 12.8
New Performance Network for Athletixx Footwear

3 Logistics
Factory 1 4
Shops
5
2 Athletixx 1
Factory 1 Corp Consumer

customers design their own personal product, and there is no need to
assemble a season’s collection. New elements and colors can be added,
but this is done centrally; there is no need to filter out all possible com-
binations into a small set of products to be produced in large quanti-
ties. This dramatically changes the way Athletixx works with its contract
manufacturers.
Instead of a relatively off-line relationship, where there is a contract
to manufacture a previously planned number of shoes, there needs to
be tight systems integration between Athletixx’s design systems and the
manufacturing systems. The manufacturing processes needs to be
redesigned, and logistics processes need to be revamped; the average
size of parcels being shipped becomes a lot smaller and the shipping
process needs to be more precisely planned for efficiency. Every order
needs to be completed and delivered within seven working days. A new
operational excellence model emerges, not based on squeezing costs
by economies of scale, but based on tight integration between the stake-
holders. In the old situation, the most important metrics would be
growth and revenue, to produce the economies of scale.
The model has changed from a single order of large quantities to a
large number of orders for a quantity of one or a few; therefore, it is
contribution margin or profitability that becomes the primary driver,
to make sure every order (of which the product characteristics are
unpredictable) is profitable. Planning cannot take place anymore based
on capacity, it has to be totally demand driven. Seasonal plans are
replaced with a continuous monitoring process. The role of the cus-
tomer changes dramatically too. The first buyers’ collectives have been
identified already, bargaining for a better price or an even higher degree