OPERATIONS MANAGENIENT a=1 CThe McGrazu-Hill C Inc,2004
1 ©The McGraw-Hill Companies, Inc., 2004
Chapter 2 Operations Strategy and Competitiveness CThe McGrazu-Hill C Inc,2004
2 ©The McGraw-Hill Companies, Inc., 2004 Chapter 2 Operations Strategy and Competitiveness
OBJECTIVES Operations Strategy Competitive Dimensions Order Qualifiers and winners Strategy Design Process A Framework for Manufacturing Strategy Service strategy Capacity Capabilities Productivity Measures CThe McGrazu-Hill C Inc,2004
3 ©The McGraw-Hill Companies, Inc., 2004 • Operations Strategy • Competitive Dimensions • Order Qualifiers and Winners • Strategy Design Process • A Framework for Manufacturing Strategy • Service Strategy Capacity Capabilities • Productivity Measures OBJECTIVES
Operations Strategy Strategy Process Example Customer needs More Product Corporate Strategy Increase Org. size Operations Strategy Increase Production Capacity Decisions on Processes and infrastructure Build New Factory CThe McGraw-Hill CoMpanies, Inc, 2004
4 ©The McGraw-Hill Companies, Inc., 2004 Operations Strategy Strategy Process Example Customer Needs Corporate Strategy Operations Strategy Decisions on Processes and Infrastructure More Product Increase Org. Size Increase Production Capacity Build New Factory
Competitive Dimensions Cost Product Quality and Reliability Delivery speed Delivery reliability Coping with Changes in Demand Flexibility and New product Introduction peed S Other Product-Specific Criteria CThe McGrazu-Hill C Inc,2004
5 ©The McGraw-Hill Companies, Inc., 2004 Competitive Dimensions • Cost • Product Quality and Reliability • Delivery Speed • Delivery Reliability • Coping with Changes in Demand • Flexibility and New Product Introduction Speed • Other Product-Specific Criteria
6 Dealing with Trade-offs For example, if we reduce costs by reducing product quality inspections, we might reduce product quality For example, if we improve customer Cost service problem solving by cross-training personnel to deal with a Flexibility Delivery wider-range of problems, they may Quality become less efficient at dealing with commonly occurring problems CThe McGrazu-Hill C Inc,2004
6 ©The McGraw-Hill Companies, Inc., 2004 Dealing with Trade-offs Cost Quality Flexibility Delivery For example, if we improve customer service problem solving by cross-training personnel to deal with a wider-range of problems, they may become less efficient at dealing with commonly occurring problems. For example, if we reduce costs by reducing product quality inspections, we might reduce product quality
7 Order Qualifiers and winners Defined o Order qualifiers are the basic criteria that permit the firms products to be considered as candidates for purchase by customers Order winners are the criteria that differentiates the products and services of one firm from another CThe McGrazu-Hill C Inc,2004
7 ©The McGraw-Hill Companies, Inc., 2004 Order Qualifiers and Winners Defined •Order qualifiers are the basic criteria that permit the firms products to be considered as candidates for purchase by customers •Order winners are the criteria that differentiates the products and services of one firm from another
8 Service breakthroughs a brand name car can be an corder qualifiers by Repair services can be nners Examples: Warranty, Roadside Assistance, Leases etc CThe McGrazu-Hill C Inc,2004
8 ©The McGraw-Hill Companies, Inc., 2004 Service Breakthroughs • A brand name car can be an “order qualifier” • Repair services can be “order winners” Examples: Warranty, Roadside Assistance, Leases, etc
9 Strategy Design Process Strategy Map What it is about! Financial Perspective Im prove Shareholder Value Customer Perspective Customer Value Proposition Internal Perspective Build-Increase-Achieve earning and Growth Perspective A Motivated and Prepared Workforce CThe McGrazu-Hill C Inc,2004
9 ©The McGraw-Hill Companies, Inc., 2004 Strategy Design Process Strategy Map Financial Perspective Customer Perspective Internal Perspective Learning and Growth Perspective Improve Shareholder Value Customer Value Proposition Build-Increase-Achieve A Motivated and Prepared Workforce What it is about!
Kaplan and nortons generic Strategy Map In the Kaplan and Norton's Generic Strategy Map, under the Financial Perspective, the Productivity Strategy is generally made up from two components 1. Improve cost structure: Lower direct and indirect costs 2. Increase asset utilization: Reduce working and fixed capital CThe McGrazu-Hill C Inc,2004
10 ©The McGraw-Hill Companies, Inc., 2004 Kaplan and Norton’s Generic Strategy Map In the Kaplan and Norton’s Generic Strategy Map, under the Financial Perspective, the Productivity Strategy is generally made up from two components: 1. Improve cost structure: Lower direct and indirect costs 2. Increase asset utilization: Reduce working and fixed capital