Operations Management Chapter 2

why productivity matters

linked to higher standards of living leads to competitive advantage in the marketplace for the industry, makes it less likely it will be supplanted by foreign industry creative destruction

competing on time/ speed

"first mover" or "first to customer" ex. amazon 1 day delivery

hierarchical planning

mission, goals, organizational strategies, functional strategies, and tactics

service sector productivity

more difficult to measure involves intellectual activities, has a high degree of variability

ways to improve productivity

1. develop productivity measures for all operations 2. determine critical (bottleneck) operations 3. develop methods for productivity improvements 4. establish reasonable goals 5. make it clear that management supports and encourages productivity improvement 6. measure and publicize improvements

methods, capital, quality, technology, management

5 factors affecting productivity

mission statement

states the purpose of the organization (what business are we in) this serves as the basis for organizational goals

opportunities and threats

SWOT part that has an external approach and evaluated by marketing people

Strengths and weaknesses

SWOT part that has internal approach and evaluated by operations people

productivity

a measure of the effective use of resources, usually expressed as the ratio of output to input

strategy

a plan for achieving organizational goals serves as a roadmap for reaching the organizational destinations organizational _____________ and functional level __________

competency-based strategies

activity/ process based success focus on developing core competencies rather than achieving specific marketing or financial goals inductive strategy

the balanced scorecard approach (Kaplan & Norton)

aligns business activities to the vision and strategy of the organization, improved internal and external communications, and monitor organization performance against strategic goals

SWOT

analysis of the strengths, weaknesses, opportunities and threats link between organizational strategies and operations strategies

Michael E. Porter

came up with the 5 Forces Model

order winners

characteristics of an organization's goods or services that cause it to be perceived as better than the competition

order qualifiers

characteristics that customers perceive as minimum standards of acceptability for a product or service to be considered as a potential for purchase

competing on quality

consumer driven finding the consumer's value set creating value

creative destruction (joseph schlumpeter)

economic innovation

competing on cost

eliminate all waste reduce human error increase employee input rigorous pursuit of efficiency

competitiveness

how effectively an organization meets the wants and needs of consumers relative to others that offer similar goods or services organizations compete through some combination of their marketing and operations functions

inductive strategy

identify the competency and build the organization around it activity driven based on specific characteristics constantly evolving to remain competitive

organizational strategies

overall strategies that relate to the whole company support the achievement of organizational goals and mission

how businesses compete using operations

product and service design, cost, location, quality, quick response, flexibility inventory management, supply chain management, service and managers and workers

productivity= efficiency + effectiveness

productivity = ______________ + ______________

goals

provide detail and scope of the mission can be viewed as organizational destinations the mission statement serves as a basis for this serves as a basis for organizational strategies

functional level strategies

relates to each of the functional areas and that support achievement of the organizational strategy

agile manufacturing

the ability of a company to thrive in a competitive environment of continuous and unanticipated charge involves the blending of several core competencies: cost quality reliability flexibility

mass customization

the ability to create a wide variety of products that use many common and mass produced items

operations

the actual "doing" part of the process

first mover matrix

the advantage gained by the initial significant occupant of a market segment also referred to as technological leadership the first entrants can gain control of resources that followers may not be able to match

employee flexibility

the flat organization structure

cost, quality, flexibility and speed

the four most common metrics

tactics

the methods and actions taken to accomplish strategies the "how to" part of the process

mission

the reason for an organizations existence

core competencies

the special attributes or abilities that give an organization a competitive edge

process yield

useful measure related to productivity ratio of output of good product to the quantity of raw material input

strategy formulation

usually deductive general direction to specific response top-down driven determines the role/ activities of the operation traditional methods based on financial and accounting measures stockholder value