Competitive Priorities in Operations Management

• Operations managers must work closely with marketing in order to understand the competitive situation in the company’s market before they can determine which competitive priories are important.
• There are four broad categories of competitive priorities: cost, quality, time, and speed.
• When companies focus on quality as a competitive priority, they are focusing on the dimensions of quality that are considered important by their customers.
• Quality as a competitive priority has two dimensions: high-performance design and goods and services consistency.
• Companies that compete on quality must deliver not only high-performance design but goods and series consistency as well.
• To see why product and process quality are both important, let’s say that your favorite fast-food restaurant has designed a new sandwich called the “Big Yuck.” The restaurant could design a process that produces a perfect “Big Yuck” every single time. But if customers find the “Big Yuck” unappealing, they will not buy it. The same would be true if the restaurant designed a sandwich called the “Super Delicious” to meet the desires of its customers. Even if the “Super Delicious” was exactly what the customers wanted, if the process did not produce the sandwich the way it was designed, often making it soggy and cold instead, customers would not buy it.
• Companies that compete on time must address both of these issues: the product must be designed to meet customer needs, and the process must produce the product exactly as it is designed.
• The key to becoming leaders in an industry is to make time a competitive priority and to use technology to speed up processes.
• Flexibility is the ability to readily accommodate changes in the environment.
• When time is a competitive priority, the job of the operations function is to critically analyze the system and combine or eliminate processes in order to save time.
• Rapid delivery refers to how quickly and order is received; on time delivery refers to the number of times deliveries are made on time.
• Flexibility can be achieved by offering a wide variety of goods and services, as well as customization to the unique needs of clients.

Test your knowledge about the competitive priorities in operations management, including cost, quality, time, speed, and flexibility. Learn about the dimensions of quality and the importance of addressing design and process to meet customer needs.