Operations Strategy and Competiveness

7/31/2019 Operations Strategy and Competiveness

1/32

Operations strategy and

competiveness


2/32

Business strategy

A long-range plan for a business.

Operations strategy

A long-range plan for the operations function

that specify the design and use of resources tosupport the business strategy.


3/32

Developing a Business Strategy


4/32

Relationship between the

business strategy and the

functional strategies


5/32

Operations Strategy and the Design of

Operations Functions


6/32

Four Broad Categories of Competitive

Priorities Cost

A competitive priority focusing on low cost

Quality

A competitive priority focusing on the quality of goods

and services.

Time

A competitive priority focusing on speed and on-time

delivery Flexibility

A competitive priority focusing on offering a wide

variety of goods or services.


7/32

The Need for Trade offs

The need to focus more on one competitive

priority than on others.

Order qualifier

Competitive priorities that must be met for a

company to qualify as a competitor in the

marketplace.

Order winners

Competitive priorities that win orders in themarketplace.


8/32

Translating Competitive Priorities into

Production Requirements

1. Structure Operations decisions related to thedesign of the production process, such ascharacteristics of facilities used, selection of

appropriate technology, and the flow of goodsand services through the facility.

2. Infrastructure Operations decisions related tothe planning and control systems of the

operation, such as the organization of theoperations function, the skills and pay of workers,and quality control approaches.


9/32

Technology can be used by

companies to gain a competitiveadvantage and should be acquired to

support the companys chosen

competitive priorities.


10/32

Measuring Productivity

Productivity is a measure that indicates howeffectively an organization is using its resources.It is how efficiently an organization convertsinputs into outputs

Total Productivity is computed as the ratio oforganizational outputs divided by inputs.

Partial productivity

Productivity computed as a ratio of output toonly one input (e.g., labor, materials, machines)


11/32

PRODUCTIVITY MEASURES


12/32

Partial productivity Productivity computed as a ratio of

output to only one input (e.g., labor,

materials, machines).

Multifactor productivity

Productivity computed as a ratio ofoutput to several, but not all, inputs.


13/32

Partial Productivity


14/32

Multifactor Productivity


15/32

Seatwork


16/32

Product Design and Process

Selection


17/32

Product design

The process ofdefiningall of the products

characteristics

Service design

The process of establishing all the characteristics

of the service, including physical, sensual, and

psychological benefits.


18/32

Steps in Product Design Process


19/32

Break-even analysis

A technique used to compute the amount ofgoods a company would need to sell to coverits costs.

Fixed costs Costs a company incurs regardless of how

much it produces.

Variable costs Costs that vary directly with the amount of

units produced.


20/32

Types of Processes

Intermittent operations

Processes used to produce a variety of

products with different processing

requirements in lower volumes

Repetitive operations

Processes used to produce one or a few

standardized products in high volume.


21/32


22/32

Project process

A type of process used to make a one-at-a-

time product exactly to customer

Specifications

Batch process

A type of process used to produce a small

quantity of products in groups or batches

based on customer orders or specifications.


23/32

Line process

A type of process used to produce a large

volume of a standardized product.

Continuous process

A type of process that operates continually to

produce a high volume of a fully standardized

product


24/32


25/32

Designing Process

Process flow analysis

A technique used for evaluating a process in

terms of the sequence of steps from inputs to

outputs with the goal of improving its design.

Process flowchart

A chart showing the sequence of steps in

producing the product or service.


26/32

Make-to-stock strategy

Produces standard products and services forimmediate sale or delivery.

Assemble-to-order strategy

Produces standard components that can be

combined to customer specifications.

Make-to-order strategy

Produces products to customer specifications

after an order has been received.


27/32


28/32

Process Performance Metrics


29/32

Different types of technologies can significantly

enhance product and process design.

Information technology

Technology that enables storage, processing,

and communication of information within and

between firms

Enterprise resource planning (ERP)

Large software programs used for planning

and coordinating all resources throughout the

entire enterprise.


30/32

Global positioning systems (GPS)

A type of wireless technology that usessatellite transmission to communicate exact

locations

Radio frequency identification (RFID)

A wireless technology that uses memory chipsequipped with radio antennas attached toobjects used to transmit streams of data


31/32

Automation

Using machinery to perform work without humanoperators.

Flexible manufacturing system (FMS)

A type of automated system that provides theflexibility of intermittent operations with theefficiency of continuous operations

Numerically controlled (NC) machine A machine controlled by a computer that can

perform a variety of tasks.


32/32

Computer-aided design (CAD)

A system that uses computer graphics to

design new product

Computer-integrated manufacturing (CIM)

A term used to describe the integration of

product design, process planning, and

manufacturing using an integrated computer

system

Documents

Operations Strategy and Competiveness