Professional Documents
Culture Documents
CH 2 Competitiveness Strategy Productivity
CH 2 Competitiveness Strategy Productivity
productivity
What can be competitive?
• Country?
• Company?
• Brand?
• Product line?
• Product?
• Competence?
• …
Competitiveness
• How effectively an organization meets the
wants and needs of customers relative to
others that offer similar goods or services.
What functions can affect
competitiveness?
• Marketing:
– Identifying consumer wants/needs
– Pricing
– Advertising and promotions
• Operations
– Product and service design
– Cost
– Location
– Quality
– Quick response
– Flexibility
– Inventory management
– Supply chain management
– Service
Mission and strategies
Mission Strategy Tactics
• Mission
– The reason for existence for an organization
• Mission Statement
– Answers the question “What business are we in?”
• Strategies
– Plans for achieving organizational goals
• Goals
– Provide detail and scope of mission
• Tactics
– The methods and actions taken to accomplish strategies
Vision &
Mission
Goals
Organizational Strategies
Functional Goals
Broad
Cost Leadership Differentiation
(Industry
Strategy Strategy
Wide)
Large buyers have less power Large buyers have less power
Buyer Ability to offer lower price to
to negotiate because of to negotiate because of
Power powerful buyers.
few close alternatives. few alternatives.
• Economic conditions
• Political conditions
• Legal environment
• Technology
• Competition (competitors, the basis
of competition, ease of entry)
• Markets
Key Internal Factors
• Human resources
• Facilities and equipment
• Customers (loyalty, understanding)
• Products and services (existing &
potential)
• Technology
• Suppliers
• Other (patents, labor relations etc.)
Order qualifiers and order winner
• Order qualifiers:
– Characteristics of a company’s product or
service that customers percieve as minimum
standards of acceptability to be considered as
a standard
• Order winners:
– Characteristics of a company’s product or
service that cause it to be perceived as better
than the competition
Comparison of organizational goals
Quality and Time Strategies
• Quality-based strategies
– Focuses on maintaining or improving the quality of
an organization’s products or services
– Quality at the source
• Time-based strategies
– Focuses on reduction of time needed to
accomplish tasks
Decision areas of strategic
operations management
Productivity
• Productivity
– A measure of the effective use of
resources, usually expressed as the ratio of
output to input
• Productivity ratios are used for
– Planning workforce requirements
– Scheduling equipment
– Financial analysis
–… Outputs
Productivity =
Inputs
Productivity
• Partial measures
– output/(single input)
• Multi-factor measures
– output/(multiple inputs)
• Total measure
– output/(total inputs)
Levels of measuring productivity
• Single operation
• Organizational unit
• The entire organization
• Country
• …
Productivity Growth
Productivity Growth =
Current Period Productivity – Previous Period Productivity
Previous Period Productivity
Measures of Productivity
Machine
Units of output per machine hour
Productivity
Capital Units of output per money input
Productivity Money value of output per money input
Quality
Capital / Labour - quality aim
- quality of production
Technology Management
-labor/capital
-processes
Other Factors Affecting
Productivity
• Standardization
• Information technology
• Design of the workspace; searching
for lost or misplaced items
• Scrap rates
• Labor turnover, new workers,
shortage of workers
• Safety
• Incentives
Exercise 1.
• A group of four workers installed 720 square
yards of carpeting in 8 hours. What is the labour
productivity ratio? 720 hrs / (4 workers*8 hrs)
= 22.5 yards per hour