WGU Operations and Supply Chain Management

refers to the organizational issue of balancing financial profitability with environmental responsibility.

. Sustainability

Operations management refers to

decision-making processes for the design, planning, and management of the many factors that affect operations.

T/F: Process redesign facilitates working toward a common goal in organizations

TRUE

T/F: The development of a system to produce the goods and services is essential to meeting the strategic goals of an organization.

TRUE

How does teamwork in operations benefit or add value to customers?

Teamwork in operations benefit the customer when coordinated decisions within an organization produce high quality products that customer value.

Product Development

Teamwork-oriented process that begins with the organization's strategy and analysis of the markets as input. Market research plays a key role in assessing market characteristics driving product development strategy. Uses research to develop product concept, generate product design, and provide process design for producing service or good. Knowledge regarding customer preferences, technology, operating capabilities, financial constraints, distribution systems, and so on, should be available from specialists in accounting, finance, marketing, research and development, engineering, information systems, and operations.

Product design

The determination of the characteristics, features, and performance of the product.

Two important issues that can complicate how productivity is measured:

(1) How can multiple inputs with different economic values be included? (2) How can multiple outputs with different economic values be calculated? In cases where there are multiple inputs or outputs with different values, dollars rather than item counts or hours worked are used to measure both inputs and outputs.

Operations managers apply ideas and knowledge to:

* Decrease production time. * Increase the speed of bringing new services and goods to market. * Improve flexibility to meet rapidly changing customer needs. * Enhance product quality. * Improve customer service. * Increase productivity. * Reduce costs.

Understanding Operations

* The value-added nature of operations. * The impact that technology can have on performance. * The importance of teamwork in achieving operating and organizational objectives.

Trade-Offs in Productivity

1) Trading Capital for Labor - research and development activities that design and develop new technologies and devices are important for economic health and improving living standards. Trade-offs involving capital and labor have focused primarily on automating activities previously performed by people. The result is high capital costs, low labor costs, and greater overall output—which generate an overall productivity increase. 2) Trading Capital for Material or Energy - become common to make capital investments that improve material or energy productivity. In addition to leading to an increase in material productivity, the investment also reduces the amount of energy consumed. 3) Substituting Materials for Labor - In some instances, there may be advantages to spending more for materials in order to achieve a reduction in labor costs. Sometimes it makes sense to have a supplier do extra work, which is reflected in the price of the materials. This reduces labor costs or processing time for the manufacturer. Outsourcing work has become a common practice in both manufacturing and service operations. 4) Improving Productivity Through Better Maintenance - Anytime equipment is involved, whether it is mechanical devices making automobiles, furniture, or telecommunication equipment moving voice or data, failure in the equipment leads to lower levels of equipment and labor utilization. A lack of effective preventive maintenance could lead to a reduction in both labor productivity and equipment productivity. Performing preventive maintenance when equipment is idle is critical; otherwise productivity is disrupted.

Service Operations

88% of US Economy and growing in global economy.

Environmental Sustainability

A management approach that involves developing strategies that both sustain the environment and produce profits for the company

SWOT Analysis

A planning tool used to analyze an organization's strengths, weaknesses, opportunities, and threats. - Second T is trend

Efficiency

Achieving an outcome with a minimum effort; mitigating waste.

Quick Response

Advantage for customers to have products available immediately upon request.

An overall strategic plan is needed in organizations because companies must efficiently .

Allocate resources

Operations managers at Putnam Computers directly facilitate the achievement of organizational goals by .

Allocating financial resources

Operations managers primarily help a firm implement a strategy by ________.

Allocating resources

A new, energy-efficient furnace is being installed in a steel factory. Because it would have added 10% to the cost of the furnace, management has decided not to install the optional safety override for the furnace. This decision is most likely to lead to which of the following?

An increase in legal costs. Decision not to spend the money now could result in increased worker injury, and the perception that management is cutting corners on plant safety, which often leads to legal actions.

External Environment

Analyze relationships and the external environment.

Process technology

Application of knowledge to improve a process. Such as: writing using Microsoft Word instead of by hand. Using a Computer. Outcome: Easy to change text/tables. Fonts. Easy storage and retrieval of documents.

Product technology

Application of knowledge to improve the product.

Technology

Application of knowledge, usually in form of recently developed tools, processes, and procedures, to solve problems. Advances in technology make it possible to design and build better products using fewer resources.

Goods

Articles of trad, merchandise, or wares.

Determining Opportunities

Ask the following questions when determining opportunities: * What do good opportunities look like? * Which demographics are under-served in the competitive landscape? * What interesting trends might influence an organization's products or services?

Determining Strengths

Ask the following questions when determining strengths: * What advantages does the organization have? * What are the core competencies of the business? * What unique or lowest-cost resources are controlled? * What do people in the marketplace perceive as the organization's strengths or reputation? * What factors make the organization unique?

Determining Threats

Ask the following questions when determining threats: * What are the obstacles to fair competition? * What are other competitors doing? * Are quality standards or specifications for products or services changing? * Is technology changing the way customers consume products or services? * Does the organization have bad debts or other adverse financial dead weight? * Does the industry experience seasonal cash-flow problems? * Could any of the weaknesses seriously threaten an organization's longevity?

Determining Weaknesses

Ask the following questions when determining weaknesses: * What could be improved? * What should be avoided? * What are people in the market likely to perceive as weaknesses? * What factors result in lost sales?

Many automotive manufacturers have factories in multiple countries. Vehicle designs and safety specifications are different from country to country. In which country would we expect to see stronger safety regulations for automobiles? A) India B) US C) China D) Vietnam

B) US - most developed country, and product safety issues tend to be more developed, as standards of living increase.

Why are team-oriented operations essential today?

Because cooperation is necessary to solve quality and productivity problems to remain competitive increasingly global marketplace.

A combination of improvements in managerial practices, increased productivity by American workers, and the expansion of US natural gas production may reduce the cost to make steel in the US. The US steel industry may soon become more competitive in global trade due to .

Becoming a more efficient producer.

A small civil engineering firm has decided to invest in a Bobcat tractor to assist in clearing land and preparing the ground for its projects. The effect on society of the new tractor is that it will .

Benefit because more work is completed with less resources.

Productivity and Leisure

Benefit include more leisure time. Nominal work week has been 40 hours for several decades, used to be 50-60 work week and a 6 day work week wasn't uncommon. Time off for holidays and vacation was substantially less.

Advances in technology can help the operations of an organization to design and build better products and relates to .

Both tangible goods and intangible services.

Advances in technology can be used to help the operations of an organization to:

Both: develop new ideas and successfully implement them & create a process that helps an organization accomplish a task.

Producers of goods exist in manufacturing sector and manage the operations for products such as --------------------- that customers value.

Bridges are tangible and many are constructed by some level of government, which is part of the public sector.

Supply Chain Management (SCM)

Broadens the definition to include supply (vendors and suppliers), operations (as described above), logistics (transportation), and the integration of information and technology among the supply and operations elements with downstream customers and end-user customers.

Most organizations develop common goals during the ----------------- process, which is done annually.

Budgeting and planning

In order to develop a competitive advantage, satisfy customers, and achieve organizational success, a firm should focus on -

Business processes.

Operations managers use technology to solve problems that can make life better for consumers. Value for the customer can be enhanced .

By using advances in technology that make it possible to design and build better products and processes using fewer resources.

In an effort to obtain its ISO standard certification, XYZ Consulting has arranged its structure so that its consultants specialize in specific areas of activity such as strategic planning, product development and supply chain management. XYZ's organizational structure would be classified as which of the following? A) Functional B) Product C) Process D) Centralizaed

C) Process

A teamwork approach in managing operations .

Can help solve quality and productivity problems.

Which term refers to a capability valued by customers that enables a firm to improve its profitability?

Competitive Advantage

Synergy

Cooperative actions (teamwork) in which total effect of actions is greater than the sum of the invididual effects.

When conducting a SWOT analysis, what element considers the characteristics, of a business or project, that lend an advantage within the scope of the study?

Correct. Strengths are considered the characteristics of a business or project that lend an advantage within the scope of the study.

Which list below represents the four elements of a SWOT analysis?

Correct. The four elements of SWOT analysis are strengths, weaknesses, opportunities, and threats.

A manager in a fast food industry can create a competitive advantage by creating -

Cross-functional teams.

Job markets have shifted between countries for manufacturing, technology, engineering and management jobs over the past decades. Which of the following has been a driving force in the global job market? A) Movement of production facilities B) Free trade agreements C) Market domination by multinational firms D) Labor Costs

D) Labor Costs

What type of decision making can result in more cross-functional teams?

Decentralized

An operations manager is trying to determine whether production employees should attend a workshop on cultural diversity. He has heard complaints about off-color jokes from some employees. The company's code of conduct explicitly states that religious, racial, and gender-based bias are not tolerated. It is likely this manager will rely on the code of conduct to make a .

Decision.

In general, when productivity increases, the cost to produce a product .

Decreases

T/F: The execution of a successful order fulfillment system is not dependent on purchasing and material management.

FALSE Correct. The execution of a successful order fulfillment systems depends on purchasing and materials management, in addition to production planning, scheduling, inventory control, and project management.

Ethics

Describe challenges of ethical and social responsibilities for sustainable operations.

Sustainability

Describe challenges of ethical and social responsibilities for sustainable operations. Relate to triple bottom line of profitability, employee wellness, and environmental viability.

Key Business Processes

Describe key strategy development processes in operations management.

Systems Creation

Developing systems to produce the services and goods designed in the product development process requires firms to assemble resources—people, facilities and equipment, and material and energy. Important knowledge inputs needed to develop an effective production system are the product and process designs created in the product development process. These designs help to guide decision making.

The Coca-Cola Company has published two versions of its Code of Business Conduct, its worldwide code of conduct, and a code of conduct specific to Coca-Cola France, Refreshment Services and Coca-Cola Midi. What is the most likely reason that Coca-Cola employees in France and in the US have different codes of conduct?

Differences in ethical and legal requirements for doing business between France and the US led to differences in the company's code of conduct.

Customers are not concerned about functions, they are concerned about how outputs of organization meet their needs.

Do not care if company organized by function or discipline. They care about value.

Human Resource Viability

Effective management results in the maximum potential from the skills, knowledge, and experience of human resources. Promoting workforce development, fair compensation, job security, and process safety are expensive programs, but the result is a long-term resource of viable employees.

Jean's Hair Salon wishes to offer a variety of services to its customers each day. How can Jean's Hair Salon accomplish its goal of offering multiple services to its customers without increasing costs?

Employees at Jean's Hair Salon can be trained to perform multiple job functions.

Through effective operations management, a company improves customer value by ________.

Enhancing product quality

Model of Competitive Advantage

Environment (SWOT) > Business Process (Strategy and product development, develop systems to produce services and goods, order fulfillment > Competitive Capabilities (Flexibility, Productivity, Quality, Time (Concept to design, production to delivery), E-Business, supply chain mgmt., customer relationship management) > Customer Requirements (meeting needs, quick response, product performance and features, product quality, price, service)

E-Z Delivery Service, a local delivery company, is replacing its fleet of large delivery vans with minivans that are less expensive and use less fuel. Based on the triple bottom line, this decision by E-Z Delivery Service addresses .

Environmental viability and profitability.

Making operational decisions often involves creating an that ensures both short-term profits and long-term sustainability for the organization.

Ethical balance

An Organization's Goals

Explain how designing, planning, and managing operations support organizational goals.

MODULE 2: BUSINESS PROCESSES CREATE COMPETITIVE CAPABILITIES

Explain how operations management helps businesses create competitive advantages.

Factors in Productivity

Explain the relationship between inputs and outputs to determine a company's productivity

Productivity

Explain the relationship between inputs and outputs to determine a company's productivity.

Many factors affect a company's ability to develop a competitive advantage. A new government regulation is an example of a potential threat from a company's environment.

External

Operations managers rarely become involved with worker safety or environmental pollution complaints because such ethical issues are only handled by an organization's legal department.

FALSE

T/F: Due to the pressure to compete globally, an increasing number of firms are changing their organizational structures. Instead of being organized by business processes, more firms are being organized by business functions.

FALSE

T/F: Although consumers and organizations benefit from the improved efficiency and lower product costs that result from team-oriented operations, teamwork typically results in fewer job opportunities and lower wages for an organization's employees.

FALSE - although labor forces once believed that productivity increases would result in fewer jobs, now workers support higher productivity through teamwork because efficiency improves job security and allows non-inflationary increases in wages.

True or False The most critical input for a university is capital.

FALSE - for service industry, labor most critical

True or false? When developing systems to produce goods and services, firms must assemble the necessary internal resources, such as employees and equipment. At this stage, organizations should avoid using external resources to ensure the protection of product ideas.

False Correct. Developing systems to produce the services and goods designed in the product development process requires firms to assemble resources—people, facilities and equipment, and material and energy—from both inside and outside the firm.

True or false? As indicated with flat-screen televisions, when a firm makes improvements to product quality, product costs increase significantly.

False Correct. Flat panel televisions have seen large improvements in quality while prices have remained the same or have dropped substantially.

T/F: Operations are important because operational plans help create a path toward the organization's objectives determined in the strategic planning process. This only happens when considering a company's strengths.

False Correct. Operations are important because operational plans help create a path toward the organization's objectives determined in the strategic planning process that is based on the four elements of a SWOT analysis. These include not just strengths, but weaknesses, opportunities, and threats.

T/F: SWOT analysis can only be used as a simple tool to begin strategy formulation.

False Correct. SWOT Analysis can be used as a simple tool to begin strategy formulation but can also be used as a sophisticated strategy tool.

True or false? Any organization that adheres to the universal set of customer requirements will develop a competitive advantage and succeed in its industry.

False Correct. There is no universal set of customer requirements for all industries or for all customers within one industry, so a firm must gather information about its specific customers to develop a competitive advantage.

T/F: Service providers do not produce products because they are not part of the manufacturing sector.

False - final output for both producers of goods and producers of services represent a good or service, both of which are considered products.

T/F: When making a decision whether to outsource manufacturing to another country, a company does not need to consider how its employees are affected.

False. Employees are stakeholders for a company. Managers should seek solutions that benefit all stakeholders.

T/F: Team-oriented operations meet the demand for high-quality, low-cost products that provide advantages only to the organization.

False: Benefit many stakeholders, including the organization, but also labor, consumers, and management.

T/F: The management of inventory is more important to producers of goods and producers of services.

False: Managing inventory is important to both producers of goods and producers of services. They both rely on it in different ways.

T/F: Operations can only add value when producing a product for profit.

False: Not-for-profit organizations can add value. The value added to products represents improved wealth to society. The wealth created or preserved by value-added operations contribute to economic growth and makes more resources available for other wealth-creating activities. This ultimately improves the living standard because more wealth is created than consumed.

T/F: Operations in the service and manufacturing sectors operate independently from each other in creating a value chain that ultimately brings products to customers.

False: The service sector depends on the manufacturing sector in many ways and their value chain is tightly linked.

T/F: High-quality outputs that add value to customers represent physical goods, not services.

False: high-quality products, whether a good or service, can create customer satisfaction and ultimately a competitive advantage in the marketplace.

Which ethical issue would impact an operations manager the most?

Faulty worker safety gear

Three Revolutions in Economic Development

First - increases in farming productivity resulting from development of better methods and machinery. Second - Late 1800s - first 1/2 of 1900s - improvement in manufacturing productivity freed resources for expansion of service operations. Third - Began in 1950 with development and commercial application of computers.

Productivity and Improved Living Standards

First, organizations allow individuals to specialize in work, such as production, engineering, and sales. Second, organizations support the development and implementation of technology and automation to achieve greater productivity. Third, organizations provide a mechanism for coordinating work toward a common set of goals.

What is a characteristic of an organizational structure based on business processes?

Focusing on customer needs

Which of the following is an activity of both service producers and goods producers?

Focusing on product improvement

Operations Add Value

For profit organizations - profits and investments in new technology and new facilities - improve operations and lower prices Not-for-profit - improved wealth to society (ex fire protection saves more money in damages than cost of service - makes more money for other wealth-creating activities)

Module 1

Fundamental Operations Concepts Objective: Explain how operations management improves an organization's ability to deliver goods and services.

Productivity and Wage Rates

Generally, wage rates and productivity are positively correlated. This positive correlation means that organizations with high productivity can afford to pay their workers better wages because their workers produce more output. This correlation has implications for companies that are selecting locations for their operations. A country with a low wage rate does not necessarily have low unit labor costs because workers in the country may have low productivity.

Earlier in this module, you learned that there have been three economic shifts in the United States due to significant increases in productivity. Which of the following explains the shift in the nature of work, from manufacturing to service-based work?

Historians have labeled the years from 1870-1914 as the period of the Second Industrial Revolution. While the First Industrial Revolution caused the growth of industries, such as coal, iron, railroads, and textiles, the Second Industrial Revolution witnessed the expansion of electricity, petroleum, and steel.

The primary reason that many firms are shifting to leaner organizational structures is to ________.

Improve decision making

When people work together in organizations instead of working alone or in isolated groups, overall productivity tends to increase, which leads to _________.

Improved standards of living

Productivity Benefits

Increase in productivity reduce costs, lower pricers, and provide a basis for competing in world markets.

If a company's teamwork-oriented operations are managed effectively, what is the likely result?

Increased product sales

Organizational Structure

Infrastructure of formal relationships among different functions or subsystems, such as marketing, finance, and operations. Defines lines of communication.

At the end of each month, the Ajax City Hospital Billing Department creates invoices for all patients who owe the hospital money. Most of the billing work is done by Hannah, a long-time employee. Hannah extracts patient information from the hospital's database then uses a template in a word processor to create each invoice. Hannah typically spends two days, or 16 hours, to create about 200 invoices each month. Hannah's manager has decided to send Hannah to a training course to help her learn how to output invoices directly from the database. Which of the following best explains why this training would increase Hannah's productivity?

Input will decrease while output will stay the same. Correct! Productivity = output/input. Hannah will be able to create invoices more quickly, so the denominator will decrease. The training will not affect how many invoices Hannah has to process, so the numerator will stay the same.

A business process has which of the following unique characteristics that make it key in any organization?

It is cross-functional

Customers tend to value those aspects of a company's business model that indicate its focus on serving their needs to its highest capabilities. Customers bond with brands and organizations they perceive to be going "above and beyond" mere compliance with expected performance. The XYZ Truck Stop on I-815 is more likely to generate a competitive advantage if it:

Keeps its facility open 24 hours a day.

Ajax, a computer manufacturer headquartered in Delaware, has decided to outsource the manufacturing of its computers for the Asian market to a contract manufacturer in China in order to take advantage of lower labor costs. This will enable Ajax to price its computers competitively in the Asian market. The contract manufacturer does not have the specialized testing equipment needed to test the Ajax computers, so Ajax agrees to purchase the equipment at a cost of $200,000 and install it for the contract manufacturer. All of the components used to build the computers are available from multiple sources worldwide. Which of the following inputs would Ajax be most likely to use in calculating the contract manufacturer's productivity?

Labor and capital. Correct! Typically, productivity is calculated with any inputs that are constraints on the process. In this case, the decision to build in China is key to competitively priced products. The testing equipment is specialized for Ajax computers. These would be considered key inputs and would likely be used to determine the contract manufacturer's productivity.

Economically, the inputs are:

Labor by managers and workers (either internally or externally) Capital for land, facilities, and equipment Materials, including energy requirements

Organizational structure will most likely define the .

Lines of communication.

A pharmaceutical sales company needs to replace its company cars. One car company quoted a price 15% lower than its competitor. The pharmaceutical company took into account total expected costs of ownership, including purchase price, fuel efficiency, ergonomic comfort, end-of-life resale value, and warranty costs, and went with the higher-priced competitor to achieve .

Long-term benefits

By applying current technology to operations management, a firm is most likely able to ________.

Make better products with fewer resources.

Labor Productivity

Quality or Value of Units Produced / Labor hours or Labor Cost

Material Productivity

Quantity or Value of Units Produced / Material quantity or Cost

Processes versus functions

Many shifting from organizing business by functions (operations, marketing, finance, etc) to process (strategy formulations, product development, order fulfillment.

When McDonald's started offering specialty coffee drinks, it was hoping to increase its market share in its industry. What is the definition of market share?

Market share is a company's sales divided by the sales of all companies in its industry.

An order fulfillment system manages customers orders in several steps. Select the one that is NOT part of the process. ** Entering orders into the organization's information system. ** Obtaining customer orders. ** Delivering the order to satisfy customers. ** Marketing to the customer.

Marketing to the customer

One way of utilizing SWOT Analysis is matching and converting.

Matching is used to find competitive advantages by matching the strengths to opportunities. Converting is to apply conversion strategies to convert weaknesses or threats into strengths or opportunities.

Operations Management

Multidisciplinary science that organization use to acquire inputs (such as people, capital, material or energy) and transform them into outputs (products or services) that ultimately provide value to the end customer.

Which term refers to the arrangement of formal relationships between a firm's functional areas?

NOT OPERATIONAL HIERARCHY

In the 1950s, Coca-Cola replaced glass bottles with lighter, less costly aluminum cans without changing the taste of the soda. This operations change best illustrates how technology altered Coca-Cola's .

NOT PROCESS DESIGN

Strategy

Operations should be linked to the rest of the organization by developing strategies consistent with the organization's overall strategy. Links can be built into planning process. Plan is list of actions management expects to take. Plan method for allocating organization's resources in relation to opportunities and problems present in environment.

Which key process within an organization obtains customers' orders, enters them into the organization's information system, and finally delivers the order to satisfy customers?

Order fulfillment

________ refers to obtaining a customer's order, placing the order in the firm's information system, delivering the product, and satisfying the customer with the product.

Order fulfillment

Legal, Environmental, and Ethical Issues

Organizations face labor unions, environmental advocates, and consumer groups that have been successful in passing legislation to define labor management relations, regulate the safety of the workplace, shape environmental and sustainability programs, and protect consumers.

Creating Global Markets

Organizations that are successful in the twenty-first century will develop an understanding of global marketing, distribution systems, financial and capital markets, accounting, and operations, rather than national strategies.

The operations within an organization produce the goods and services that meet the demands of society and create value for the consumers who benefit from the which are worth more to the consumer than the total cost of the .

Outputs; Inputs

Operations Management Cycle

Plan - Capacity Planning, Strategic Plan Do - Supply Chain Management, Forecasting Check - Quality Management, Scheduling Act - Customer Service, Facility Planning

Businesses are shifting from organizing by function to organizing by .

Process

Operations

Process within organizations that acquire inputs and transform them into outputs for public to consume. Process through which people, capital and material are combined to produce the services and goods consumed by public. Employs labor/management, uses facilities and equipment (capital) to change resources (raw materials) into finished goods or to provide services. Success requires outputs to be worth more than total cost of inputs.

operations definition

Processes within organization that acquire inputs and transform them into outputs that the public can consume

Technologies applied in the operations of both producers of goods and services include both and design.

Product & Process

Jane Smith is expecting her first child and is understandably concerned about the child's safety as they travel. Jane is shopping for a car seat for her new arrival. Given her stated concerns, all else being equal, which of the following customer requirements do you think Jane will most likely consider?

Product Quality as revealed in consumer safety tests.

Product design and process design are not always independent.

Product design decision may dictate the process that should be used. Manager may prefer that product design and process design be completed simultaneously by the same group of people working in closes collaborations - Sometimes called concurrent engineering.

Which of the following is calculated by determining the ratio of outputs achieved divided by the inputs consumed to achieve those outputs?

Productivity

Productivity and the Workforce

Productivity improvements, such as earth-moving equipment, are essential for designing and building more goods and services at a lower cost, which increases the standard of living. As a result, new jobs are created, and most of these jobs require higher levels of education.

An order fulfillment system needs to be designed and implemented to satisfy a customer's order.

TRUE

T/F: Organizations with flexible operations respond quickly and inexpensively to the changing needs of customers.

TRUE

Many companies that generate monthly bills to customers, such as credit card, cable, and utility companies now offer customers the option for online billing, instead of sending the bill by postal mail. Online billing allows companies to reduce paper usage and shipping costs. These companies can and .

Reduce environmental impact; increase profits.

For the last 20 years, U.S. automakers have struggled to compete with their Japanese competitors. The highly effective distribution systems, management practices, and global strategies of Toyota and Honda have allowed these Japanese automakers to develop a ________ in the auto industry.

Relative Advantage

The difference between the lowest cost producer of a good and the next-lowest cost producer of the same good is known as a(n) .

Relative Advantage

The US Steel industry has faced tough competition from India and China, which have been able to produce low-cost steel, partly due to lower labor costs, since the 1980s. India and China developed an ------------- over the US.

Relative advatage

Designing Products for Goods

Requires consideration of physical properties because goods are tangible. Usually requires training in engineering because strength, durability and performance are important.

SWOT analysis is used as a tool when used to uncover exploitable opportunities within the competitive landscape.

SIMPLE

SWOT analysis is used as a tool when a firm crafts a strategy that helps distinguish itself among competitors, develops competitive advantages, and avoids barriers within the business environment.

STRATEGIC

n the late 1800's, Frank Woolworth and several family members opened a series of five- and ten-cent stores. By 1912, F. W. Woolworths & Company had 596 stores in the United States. Products were sold for five cents and ten cents, and the stores generally stocked mass-produced household goods such as apple corers, can openers, and shovels. The growth of F. W. Woolworths & Company's five- and ten-cent stores occurred as a result of productivity changes attributed to the __________.

Second Revolution

Ethics

Sense of what is right and wrong that guide behavior.

Strategy Development

Should drive organization to ultimate objective. Considers SWOT in development. Planning provides path to objective by setting goals, developing action plans for achieving goals, and determining resource requirements.

Designing Products for Services

Similar to goods when involves selling a good, such as food. Quality will be important. Quality also important when service is performed by a person such as a doctor or lawyer.

Order Fulfillment

Steps to satisfy customer's order from obtaining order, entering into organization info system to delivery. Order fulfillment should be a highly integrative teamwork-oriented process that includes many disciplines and activities, such as sales, credit verification, analysis of working capital needs, and selecting shipping routes and transportation alternatives. This execution is dependent upon the organization's ability to plan and manage operations, including production planning, scheduling, inventory control, purchasing and material management, and project management. These activities influence and are affected by activities carried out in other parts of the order fulfillment process.

Organizations such as Apple must execute on their competitive capabilities in order to achieve customer satisfaction, which in turn drives the organization's success. Apple famously focuses on style, creates innovative and unique products, and delivers them through retail channel partners including its own online and physical stores. Which combination of key process or processes does and organization such as Apple leverage to impact its operations?

Strategy development, product development, development of systems, and order fulfillment.

In most cases, companies that sell products and companies that sell services both maintain inventories of .

Supporting Goods

Mass customization

The ability of an organization to tailor its products or services to the customers' specifications

When Apple introduces flexibility into its operations, it can gain a competitive advantage. Flexibility in operations is best described as:

The ability to modify production from one product to another in response to customer demands with minimal costs and delays.

Customers have many different requirements when purchasing products. Which of the following is not a possible customer requirement in a consumer good purchasing decision?

The accounting firm the company uses.

VIRAL

The advantage must provide Value to consumers; it should be Inimitable (not easily imitated), Rare, and an organization must have the Aptitude (capability) and Lifespan (sustainability) to earn appropriate returns on the advantage.

Productivity

The control of resources to ensure the effective and efficient use of inputs and to create the goods and services provided to the end-user.

Service Sector

The sector of the economy that provides services--such as health care, banking, and education--contrast to the sector that produces goods. ( other examples legal services, transportation, utilities, lodging, entertainment, legal services, education, communications, wholesale and retail trade, public administrations, insurance, and real estate)

Environmental Stewardship

The third element and is operationalized through recycling programs, renewable resources, minimizing energy consumption, minimizing the use of toxins, reducing the supply chain, and prolonging product life.

Business owners in the apparel industry must attract customers to be successful. Why is it difficult for apparel businesses to attract customers?

There is no universal set of customer requirements for the apparel industry.

Why have IBM, Ford, and Bank of America recently cut hundreds of thousands of white-collar workers?

To be able to respond quicker to opportunities.

Functional silos that do not allow for sharing of information exist in what type of organization?

Traditional

T/F: One reason to increase productivity is because resources are limited.

True

T/F: Producers of goods and services both acquire and manage inputs throughout a transformation process that produces a final output.

True

T/F: Product design is just as important with respect to producers of products (tangible goods) and producers of service (intangible goods).

True

True or false? As manufacturing processes became more automated in the early 1900s, more job opportunities became available in the service sector, which improved the overall standard of living in the U.S.

True Answered - False Incorrect. During the late-1800s and the first half of the 1900s, improvements in manufacturing productivity freed resources for the rapid expansion of service operations.

T/F: NAFTA should promote trade in products for which the signatory countries have relative advantages.

True. One of the purposes of a free trade agreement, such as NAFTA, is to reduce tariffs and trade restrictions to promote trade between these countries on products for which each has a relative advantage.

ompanies that can improve productivity become more efficient. When productivity improves .

Unit costs decline.

In a SWOT analysis, -- refer to internal characteristics of a company that could create a disadvantage for the company.

Weaknesses

Relative Advantage

When a country is the most efficient producer of all goods and services, it would be beneficial for that country to engage in global trade because the relative advantage in one product is greater than its relative advantage in another product. Difference between the lower cost producer and the next-lowest cost producer.

Product safety is __________________________.

an issue that falls to managers to use their judgment.

Productivity equation

output/input

SWOT Analysis

identifying internal strengths (S) and weaknesses (W) and also examining external opportunities (O) and threats (T)

Productivity change

output/input -=== Nails/hours Calculates how many nails are produced in hours Ex 200,000 nails / 40 machine hours = 5000 nails / hour New machine produces more: 210,000 / 40 hours = 5250 / hour Percent change in productivity = (new productivity - old productivity) / old productivity (100) Ex = (5250 - 5000) / 5000 = 5% productivity change

Manufacturing

production of goods

Inputs

the resources—such as labor, money, materials, and energy—that are converted into outputs