Before you begin, review the Final Project Guidelines and Rubric document, and post any questions to the Capstone General Questions topic.

Use your learning from MBA 515, MBA 550, MBA 560, and MBA 635 to lay out the rationale for the concept, including the problem or opportunity it addresses, the market for the product or service, and the key features that set it apart from the competition. You should also discuss how the concept fits with the mission, vision, and priorities of the company implementing it and how or why it is innovative.

For additional details, please refer to the Milestone One Guidelines and Rubric document.

Justification of Driverless Trucks in Starrett Company

Introduction

Businesses and companies thrive from the consistent development of new products and the exploitation of new ideas and opportunities in the changing and evolving world. Moreover, for companies to maintain or maximize their competitive advantage, intrapreneurship is crucial and should be a priority, among other growth strategies (Zenovia, 2011). Companies must thrive and champion for intrapreneurship as a strategy to keep updates with the ever-changing technologies, many market trends, and changing customer needs. Hence, the paper below conclusively discusses an intrapreneurship opportunity that is likely to restructure the working processes and make them more manageable, efficient, and effective for employees, customers, and the company at large.

The paper shows the justification for the idea of introducing an integrated system and the autonomous/driverless trucks in Starrett’s STD (Shipping, Transportation, and Distribution) departments and the logistics process. Moreover, the paper outlines the reasons why the idea is an opportunity for all stakeholders in the company and analyses its market. Finally, key features that distinguish the concept as unique and a beneficial opportunity are discussed for the company to fully understand the intrapreneurship objective that would align with the organizational goals and objectives.

Rationale 

The tools and instrument manufacturing industry is incomplete without the famous L.S Starrett Company headquartered in Athol, Massachusetts. Since its inception in the 1880s, the company has grown to produce a variation of over 5,000 precision tools that range from precision measuring tools, metrology equipment, and products. The company has a wide range of customers from large manufacturing companies to medium and small-scaled businesses and firms (Starrett, 2016). The company has the main factory in Athol, Massachusetts, with other plants in six divisions in the USA, two branches and warehouses, and over ten international manufacturing locations. This shows how comprehensive the company’s logistics process is vulnerable to delays, missed payments, and wrong deliveries. Its mission, vision, and standards to provide excellent precision tools and maximize its customer’s experience and satisfaction guide Starrett Company. The company strives to ensure customer’s orders, queries are attended to, and that their services are of high quality, accurate, available, and of assurance.

However, over the years, the company has recorded a consistent increment of operational costs, negative feedback among customers, and redundancy in its operations, especially in the STD departments. With adequate research, the STD department houses many nonvalue activities, repetitive functions, delayed deliveries, damaged, lost, and missing products during deliveries, and increased costs due to the numerous outsourcing of transportation services (ClA, 2019). These aspects have become detrimental to the company, as operational costs have increased; customers’ loyalty decreased and sought other competing companies. Reverse logistics has become more expensive due to the customer return of damaged products. These problems, if not addressed, would continue to damage the company’s brand image, reputation, and its profit margins.

Through the R&D and the STD, the most appropriate solution would be to introduce the autonomous trucks in the STD departments, and logistics process backed up by an integrated system that would amalgamate these three departments, reduce the duplicated functions, and eliminate any nonvalue adding activities. The introduction of the driverless trucks would address many issues outlined above. These trucks will reduce delivery time and increase delivery trips. According to research, driverless trucks are faster than manual vehicles and save energy by about 15%. Increased delivery trips will increase the company’s cash flow, enable efficient inventory management, and reduce warehousing problems (Coccia, 2017). Moreover, the trucks will ensure timely deliveries, as they are programmed through the integrated system, which will result in customer satisfaction. The trucks are hardly involved in accidents, and they have tracking software; thus, complaints of lost, missing, or damaged products will decrease. Nevertheless, once the life cycle of the integrated system is followed effectively, the STD processing will be a success (Coccia, 2017). Implementing driverless trucks is a financial saving strategy on the high costs incurred in outsourcing transportation services as well as paying many drivers. Autonomous vehicles operate under the programming of the integrated system, thus, requiring no drivers.

The integrated system in the STD departments will also address significant issues such as the presence of duplicated functions that result in many nonvalue-adding activities. Besides, issues such as backlogs and loss of essential information will be addressed, as the integrated system will ensure privacy and adequate information sharing. The system is thus, vital, as it will maximize employee performance and productivity, which are essential virtues in the company. Implementing disruptive technologies in the company acts as a pathway to introduce lean manufacturing (Coccia, 2017). Lean manufacturing strives in environments where only value-adding activities are present. Thus, the integrated system will amalgamate all essential and critical functions in the three departments and unify all processes, which will reduce operational costs by about 10%. It will result in shared information, transactions, and orders efficiently as the life cycle moves from Order Initiation-Processing-Releasing-Closing-Delivery-Customer Feedback. Introducing lean manufacturing smoothens processes and operations, resulting in maximized customer experience, reduced returns, and increased profit margins due to the elimination of nonvalue-adding activities (Gerguri, 2016). Implementing both the integrated system and autonomous vehicles will enhance communication and efficient interactions among the three departments.

Opportunity in the Idea

When analyzing the SWOT analysis of Starrett Company, a significant opportunity was presented, namely, decreasing the transportation costs by exploiting lower shipping costs and introducing a new technology in the STD departments. The company is faced with stiff competition from other companies in the industries as they adopt new technologies to stand out and become more competitive. Implementing the autonomous trucks in the company will significantly revolutionize the company’s logistics (ClA, 2019). Evaluating Starrett’s logistics processes, there seem to be possible gaps that have resulted in high operational costs accumulated from the outsourced functions and duplicated functions. These gaps influence the costs and financial health of the company as well as the outcomes, including late deliveries, lost, missing, and damaged products. Any gap present in a business or department presents a potential opportunity that requires to be exploited and becomes a threat if not addressed.

Introducing the autonomous trucks and the integrated system in the STD departments becomes an opportunity that will result in more benefits than limitations. These benefits include improving the company’s processes, enhancing warehouse operations, ensuring effective order management, and, most importantly, ensuring effective supply chain management and logistics process. The autonomous trucks will be a significant response to customer needs and demands, addressing the complaints raised previously. Moreover, once the customer satisfaction and experience are enhanced, the customer’s purchase behavior may maximize, and new customers can be recommended (Coccia, 2017). These trucks travel faster and cover many miles, which can increase the customer base and tap untapped niches in the industry. Reducing operational costs will maximize the comparative and competitive advantage in the industry, which will translate to maximized profits, sales, customer satisfaction, and the market share of Starrett Company.

Market Analysis

The ultimate benefactor and winner of introducing the autonomous trucks and integrated system in the STD departments and logistics process are the Starrett Company and its subsidiaries. Moreover, the success and high performance of the deliverables depend on the vibrant marketing strategies that the company will accentuate. Customers ranging from large scale to medium and small-scale customers will be notified of the changes in the company’s logistics process and the presence of autonomous trucks (Starrett, 2016). In most cases, the large-scale customers who order large quantities of products such as government agencies and established ‘cash cows’ firms will be prioritized in the deliveries using the autonomous trucks. Hence, they are the primary target of this new idea in Starrett’s company. The medium and small-scale customers, such as local wholesalers and retailers will not be excluded, but the deliveries will be conducted simultaneously (Starrett, 2016). A faster, safer, and convenient mode of transportation will impress the customers and probably recommend new market niches, which will expand the company’s customer base and profit margins.

Starrett Company will adopt a rigorous marketing strategy, including both traditional and digital marketing. However, the company will emphasize digital and content marketing, as well as other B2B and B2C marketing strategies. These strategies include content marketing, networking events, earned media (PR), affinity marketing, social media, affinity, and Point-of-Purchase marketing (Wymer, 2017). The new deliverables will impress the target customers and the entire market, as it provides smoother, safer, faster, and efficient transportation and delivery of their products. This project will be implemented in all locations and manufacturing plants, both locally and internationally (Wymer, 2017). Moreover, the company will prioritize the implementation plan, especially in China, being a significant source of customer base for the company. The Chinese market is endowed with a large customer base with many loyal clients due to its large population and the sophisticated industrial nature. Hence, enhancing the customer experience with more natural, safer, faster, and efficient transportation and delivery of products will highly result in increased profits and revenue.

Competitive Advantage 

The competition that is set to delay the success of this project is likely from other mature companies and new entrants in the industry. Some of Starrett’s competitors may decide to adopt driverless trucks in their logistics processes, which may become a significant source of competition. However, five salient features will distinguish and set aside this project. Primarily, Starrett Company backs up the autonomous trucks with a conclusive, compelling, and integrated system that will ensure seamless communications in the STD departments, thus making order transactions easier to process (Coccia, 2017). Moreover, there will be transparency and smooth logistics processes that will impress the customers. Secondly, the marketing strategy includes a sustainability strategy that will ensure all customers are updated on the changes and continuous improvement of services and product delivery (Wymer, 2017). The marketing strategies adopted are conclusive and cover both traditional and digital forms of marketing, thus, reaching a wide range of customers and untapped niches.

Thirdly, Starrett’s brand name and reputation will enable the company to adopt the value-based pricing strategy, as the company values the worth and value of the customers. Customers are keen and very concerned with the quality of the products they buy and the services they receive. Thus, adopting a value-based pricing strategy will be the most appropriate providing a competitive edge, where customers pay according to the value they want. Emphasizing on vale and high-quality services will distinguish the company and set it unique among its competitors. This will hold a significant advantage over its competitor firms (Zenovia, 2011). Finally, the company’s R&D will continue researching on the best practices that match the needs and demands of all customers despite the level of business. This idea will provide many and significant benefits among customers and the company, thus, creating a win-win situation.

Alignment of the Idea with Corporate Goals, Mission, and Vision 

L.S Starrett Company’s mission statement focuses on the values and strategic details that communicate the purpose of the company as well as the services and products offered. The components of the mission statement form the basis of the alignment between the mission and the intrapreneurship idea developed. These components include customer satisfaction, the core competencies, the processes the company ventures into to achieve the goals and objectives (Starrett, 2016). The mission statement significantly aligns with the business idea in that, through the autonomous trucks and an integrated system, processes and delivery are faster, easier, and efficient, which results in enhanced customer satisfaction and experience.

Secondly, the core competencies and internal strengths outlined in the mission that communicates better ways to serve the customers align with developing new ideas and strategies to translate objectives into planned actions. The vision statement communicates the desired future of the company, which acts as the company’s strategic plan. It is guided by the need to maintain availability, ensure quality assurance, and high-quality accuracy (Starrett, 2016). These aspects form the basis of the company’s priorities that guide all strategic actions and managerial decisions.

Innovativeness of the Idea

Implementing the autonomous trucks and the integrated system in the logistics process and STD departments is an innovative idea due to many reasons. Primarily, it is an innovative idea as it involves adopting disruptive technologies and lean manufacturing in the company. The advancement of technology has resulted in the creation of disruptive technologies, which are termed creative and innovative. Disruptive technologies alter the operation processes among consumers, businesses, and industries, replaces the processes with superior functions and attributes (MAIR, 2019). These technologies create new markets and networks and are the most recent technological trends and innovations. This qualifies the idea of being innovative and creative for the company. Secondly, the idea stands out to be unique, continually enhances customer experience and satisfaction at the same time being distinguished from other competition. The idea is adopted to deliver unique and different services to customers with ease and efficiency (Gerguri, 2016). Scholars and authors describe innovation in many and various ways, however, what stands out common in over five authors is that an idea is innovative if it solves problems efficiently, revolutionaries the organization’s strategies and streamline internal processes, among others.

According to the above-outlined definition, the idea of autonomous trucks and the integrated system in the logistics process and STD departments falls in that category. This is because; the autonomous trucks deliver products quickly and conveniently, while the integrated system streamlines the internal processes and operations by eliminating backlog and nonvalue-adding activities. Thirdly, innovations are brought about to improve various aspects of life, which is the case of the autonomous trucks and the integrated system (MAIR, 2019). The trucks reduce operational costs, enhance delivery time, and ensure efficient delivery and customer satisfaction. On the other hand, the integrated system reduces backlog among employees, eliminates duplicated functions, provides transparency, effective information sharing, and seamless communication.

References

ClA. (2019, June 4). L.S. Starrett Company. The Wall Street Journal, p. pp: 1.

Coccia, M. (2017). Disruptive Technologies and Competitive Advantage of Firms in Dynamic Markets. SSRN Electronic Journal, 3-15.

Gerguri, V. R. (2016). Innovation: Principles and Strategies. Wiley Online Library, Vol 20, pp: 101-110.

MAIR. (2019). Disruptive Technology: Concepts, Methodologies, Tools, and Applications. New York: IGI Global.

Starrett. (2016). The Starrett Story: 2016 Edition. pp:3-10: Metrology Solutions.

Wymer, W. (2017). Social marketing strategy and industry involvement. Journal of Social Marketing, 2042-6763.

Zenovia, V. M. (2011). Entrepreneurship versus Intrapreneurship. Review of International Comparative Management , Vol, 12(5) pp: 971-976.