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
