LMS - Part 1 - Chapter 2 -Competitiveness-Strategy-Productivity.pdf

Competitiveness, Strategy and Productivity Operations Management 14e: William J. Stevenson COMPETITIVENESS ✓An important factor in determining whether the company prospers, barely gets by, or fail. ✓Describe how effectively the organization meets the wants and needs of costumers rela...

Competitiveness, Strategy and Productivity Operations Management 14e: William J. Stevenson COMPETITIVENESS ✓An important factor in determining whether the company prospers, barely gets by, or fail. ✓Describe how effectively the organization meets the wants and needs of costumers relative to others that offer similar goods and services. How operations influence competitiveness? Product and service design Cost Location Quality Quick response Flexibility Inventory Management Supply Chain Management Service Managers and workers How operations influence competitiveness? Product and service design – innovation and time to market Cost – productivity that leads to cost reduction Location – cost and convenience to customers Quality – satisfaction of customers’ needs and wants Quick response – quick delivery of new products Flexibility – ability to respond to change Inventory Management- matching supply with demand Supply Chain Management – coordinating internal and external operation Service – after sales activities Managers and workers – must be competent and motivated MISSION AND STRATEGIES MISSION is the reason for the organizations’ existence Usually expressed as mission statement STRATEGIES Answer the question “What business Guides the organization by providing should we be in?” direction for, alignment of, the goals and Basis for organizational goals strategies of functional areas Can be the main reason for the success and failure of the organization Three basic business strategies: 1. Low cost GOALS 2. Responsiveness Serve as foundation for the development 3. Differentiation from competitors of organizational strategies Tactics Methods and actions used to accomplish strategies More specific than strategies Provide guidance and direction for carrying out actual operations Core Competencies Special attributes or abilities possessed by an organization that give its competitive advantage Strategy Formulation SWOT ANALYSIS ENVIRONMENTAL SCANNING Environment scanning analysis Monitoring of events and trends that Link between strategy and present threats or opportunities for a operations strategy company ORDER QUALIFIERS ORDER WINNERS Characteristics that customers Characteristics of a product that perceive as minimum standards of cause it to be perceived as better acceptability for a product to be than its competitors considered for purchase OPERATIONS STRATEGY Narrower in scope, dealing primarily with the operations aspect of the organization. Relates to products, processes, methods, operating resources, quality, cost, lead time and scheduling. Strategic Operations Management Decision Areas Time-based Strategies Quality-based Strategies Focus on reducing the time Focus on maintaining and required to accomplish various improving quality of the activities product Reducing time, costs are generally Effort to improve poor quality, less, productivity is higher, quality catch up with the competition, trends to be higher, product maintain existing image of innovations appear, customer high quality. service is improve. IMPLICATIONS OF ORGANIZATION STRATEGY FOR OPERATIONS MANAGEMENT Variations for operations and supply chain are minimal Performance of customize works Give opportunity to compete in price IMPLICATIONS OF ORGANIZATION STRATEGY FOR OPERATIONS MANAGEMENT Variations for operations and supply chain are minimal Performance of customize works Give opportunity to compete in price  BALANCED SCORECARD Top-down management system that organization can use to clarify their vision and strategy and transform them into action. The idea was to move away from purely financial perspective and integrate other perspective such as customers, internal business processes and learning and growth. Develop by Robert Kaplan and David Norton in early 1990s PRODUCTIVITY A measure of the effective use of resources Usually expressed as the ratio of output into input IMPORTANT IMPLICATIONS OF PRODUCTIVITY Non-profit Organization higher productivity means lower cost Profit-based Organization important factor in determining how competitive a company is Nation the rate of productivity growth is a great importance HOW TO COMPUTE PRODUCTIVITY SINGLE FACTOR MULTI FACTOR PRODUCTIVITY PRODUCTIVITY FORMULA: FORMULA: TOTAL OUTPUT OUTPUT LABOR + MATERIAL LABOR COST+ OVERHEAD FACTORS THAT AFFECT PRODUCTIVITY METHODS CAPITAL QUALITY TECHNOLOGY MANAGEMENT IMPROVING PRODUCTIVITY 1. Develop productivity measures for all operations. 2. Look at the system as a whole in deciding which operations are most critical. 3. Develop methods for achieving productivity improvements 4. Establish reasonable goals for improvement 5. Clear management supports that encourage productivity improvement 6. Measure improvement and publicize them