IE10 Operations Management Introduction

IE10 - Operations Management

• The course covers operations management, specifically focusing on the introduction to the topic.
• The table of contents outlines the following topics: operations and productivity, operations strategy in a global environment, project management, and forecasting.
• Operations Strategy in a Global Environment is a key part of the course.

Global View of Operations & Supply Chains

• Boeing's success stems from its worldwide sales and supply chains.
• Benetton rapidly moves inventory globally through effective communication and flexible design.
• Sony's supply chain extends across multiple countries for electronic product assembly and distribution.
• Volvo, now owned by Geely, assembles cars globally on shared platforms (e.g., Mazda 3, Ford Focus).

Globalization Impact

• Globalization encompasses worldwide customers, talent, and suppliers.
• Key impacts on companies due to globalization include quality, variety, customization, convenience, timeliness, and cost.
• Companies seek international operations to enhance supply chains, reduce costs, improve operations, understand markets, and acquire global talent.

Determining Missions & Strategies

• Mission defines the purpose or contribution of an organization to society.
• Strategy is the action plan to achieve the mission and is more manageable if the mission is clearly defined.

Achieving Competitive Advantage

• Competitive advantage arises from creating a system superior to competitors in differentiation, low cost, and response.
• Differentiation focuses on unique customer experiences, using customer senses for engagement and immersion in the product.
• Low-cost leadership aims to maximize value as determined by the customer.

Response-based Competitive Advantage

• Flexibility in response is vital in dynamic market conditions with fluctuating design innovations and volumes.
• Timely product development, delivery, and scheduling are crucial for effective response.
• Reliability of scheduling is another key aspect of competitive response.

Operational Strategy Issues

• A vital perspective is the resource view, considering financial, physical, human, and technological resources and their compatibility with potential strategies.
• Value chain analysis helps identify activities that represent strengths or potential strengths to enhance competitive advantage.

Porter's Five Forces Model

• Porter's Five Forces is a framework for identifying and analyzing competitive pressures within an industry.
• The model analyzes threat of new entrants, rivalry among existing competitors, bargaining power of suppliers, bargaining power of buyers, and threat of substitutes.

Strategy Development & Implementation

• SWOT analysis is a strategic management tool for assessing internal strengths and weaknesses and external opportunities and threats.
• Companies engage in SWOT analysis to understand internal strengths and weaknesses and external opportunities and threats to develop strategies.
• Question examples for SWOT are: What do we do well? What dissatisfaction among our customers? Where do we fall short of our competitors?

Key Success Factors & Core Competencies

• Key success factors (KSFs) are activities crucial for achieving organizational goals.
• Core competencies are unique skills, talents and capabilities that a firm excels in, at a world-class standard.

Strategic Planning, Core Competencies, & Outsourcing

• Outsourcing tasks traditionally handled within a company to external providers is a strategic move.
• Outsourcing is an agreement (often legally binding) with an external organization for tasks.

Outsourcing Risks & Issues

• Outsourcing often faces risks due to poor planning and analysis.
• Timely delivery and quality standards are vital considerations in outsourcing.
• Customer satisfaction can decrease after outsourcing service elements.
• Outsourcing may cause reduced employment, facility changes, system adjustments, and logistics expansion.

Outsourcing Advantages & Disadvantages

• Advantages include cost savings, gaining specialized expertise, improving operations/service, focusing on core competencies, and accessing external technology.
• Disadvantages comprise increased logistics costs, loss of quality/delivery control, future competition, negative employee impact, and long-term risk.

Rating Outsourcing Providers

• The Factor-rating method evaluates outsourcing providers based on objective factors such as quality, delivery, price, and service.
• This method employs factors like importance weights and ratings score to select the best option.

Example: Rating Provider Selection Criteria & Exercise #2

• Case studies illustrate practical application of the factor-rating method in selecting outsourcing providers.
• Examples involve ranking providers based on criteria for cost reduction, capital investment, and skilled personnel.
• Risk avoidance techniques and cultural factors are also significant in selecting the right countries.