Business Strategy Chapter 2

Strategy

• A sustainable strategy meets current needs without compromising future generations' ability to meet their needs.
• A triple bottom line includes social, economic, and environmental criteria.
• Seven competitive dimensions in operations and supply chain are cost, quality, delivery speed, delivery reliability, coping with changes in demand, flexibility, and speed of new product introduction.
• Cost is a major competitive dimension that is difficult to compete on.
• Straddling occurs when a company matches a competitor's actions while maintaining its existing competitive position.
• An order winner is a criterion that differentiates a firm's products or services from others.
• An order qualifier is a screening criterion that permits a firm's products to be considered for purchase.
• An activity-system map shows the activities that support a company's strategy.
• Productivity is a measure calculated by taking the ratio of output to input.

Design of Product, Service, and Capacity

• A contract manufacturer is an organization capable of manufacturing or purchasing all components needed to produce a finished product.
• A core competency is the one thing a company can do better than its competitors.
• The six phases of the product development process are planning, concept development, system-level design, detail design, testing, and production ramp-up.
• Net present value is a useful tool for the economic analysis of a product development project.
• Quality function development uses interfunctional teams to get input from customers in design specification.
• A house of quality is a matrix of information that helps translate customer requirements into operating or engineering goals.
• Design for manufacturing and assembly aims to simplify products by reducing the number of separate parts.
• Ecodesign incorporates environmental considerations into the design and development of products or services.

Project Management

• A pure project or skunkworks is a project structured where a self-contained team works full-time on the project.
• Milestones are specific events that mark important progress toward completing a project.
• A work breakdown structure defines the hierarchy of project tasks, subtasks, and work packages.
• Activities are pieces of work in a project that consume time to complete.
• A Gantt chart shows both the time and sequence for completing activities in a project.
• Critical paths are activities that in sequence form the longest chain in a project.
• Slack is the difference between the late and early start time for an activity.
• The Program Evaluation and Review Technique (PERT) schedules activities with probabilistic task times.
• Crashing is the procedure used to reduce project completion time by trading off time versus cost.
• Resources are always available, a key assumption related to the resources needed to complete activities when using the critical path method.

Manufacturing and Service Processes

• A made-to-order production environment involves making predesigned products directly to fill customer orders.
• A decoupling point is a point where inventory is positioned to allow the production process to operate independently of the customer order delivery process.
• A make-to-order production environment involves designing and building products from scratch according to customer specifications.
• If a production process makes a unit every two hours and it takes 42 hours for the unit to go through the entire process, the expected work-in-process equals 21 units.
• A finished goods inventory, on average, contains 10,000 units if the production rate is 1000 units per day and the average delivery time is 10 days.