Professional Documents
Culture Documents
OPM Chapter 2
OPM Chapter 2
2-2
Competitiveness:
2-3
Businesses Compete Using Marketing
• Identifying consumer wants and needs
• Pricing
• Advertising and promotion
2-4
Businesses Compete Using Operations
• Product and service design
• Cost
• Location
• Quality
• Quick response
2-5
Businesses Compete Using
Operations
• Flexibility
• Inventory management
• Supply chain management
• Service and service quality
• Managers and workers
2-6
Mission/Strategy/Tactics
2-7
Strategy
• Mission
• The reason for existence for an organization
• Mission Statement
• States the purpose of an organization
• Goals
• Provide detail and scope of mission
• Strategies
• Plans for achieving organizational goals
• Tactics
• The methods and actions taken to accomplish strategies
2-8
Planning and Decision Making
Mission
Goals
Organizational Strategies
Functional Goals
2-10
Examples of Strategies
• Low cost
• Scale-based strategies
• Specialization
• Flexible operations
• High quality
• Service
2-11
Strategy and Tactics
• Distinctive Competencies
The special attributes or abilities that give an
organization a competitive edge.
• Strategy Factors
• Price
• Quality
• Time
• Flexibility
• Service
• Location
2-12
Examples of Operations Strategies
2-13
Global Strategy
• Strategic decisions must be made with respect to
globalization
• What works in one country may not work in
another
• Strategies must be changed to account for these
differences
• Other issues
• Political, social, cultural, and economic differences
2-14
Strategy Formulation
• Distinctive competencies
• Environmental scanning
• SWOT
• Order qualifiers
• Order winners
2-15
Strategy Formulation
• Order qualifiers
• Characteristics that customers perceive as
minimum standards of acceptability to be
considered as a potential purchase
• Order winners
• Characteristics of an organization’s goods or
services that cause it to be perceived as better
than the competition
2-16
Key External Factors
• Economic conditions
• Political conditions
• Legal environment
• Technology
• Competition
• Markets
2-17
Key Internal Factors
• Human Resources
• Facilities and equipment
• Financial resources
• Customers
• Products and services
• Technology
• Suppliers
2-18
Operations Strategy
• Operations strategy – The approach, consistent
with organization strategy, that is used to guide
the operations function.
2-19
Strategic OM Decisions
Decision Area Affects
Product and service design Costs, quality liability and environmental
Capacity Cost structure, flexibility
Process selection and layout Costs, flexibility, skill level, capacity
2-21
Productivity
• Partial measures
• output/(single input)
• Multi-factor measures
• output/(multiple inputs)
• Total measure
• output/(total inputs)
Outputs
Productivity =
Inputs
2-22
Productivity Growth
Productivity Growth =
Current Period Productivity – Previous Period Productivity
Previous Period Productivity
2-23
Measures of Productivity
Table 2.4
2-24
Examples of Partial Productivity Measures
Table 2.5
MFP = Output
Labor + Materials + Overhead
2-27
Factors Affecting Productivity
Capital Quality
Technology Management
2-28
Other Factors Affecting Productivity
• Standardization
• Quality
• Use of Internet
• Computer viruses
• Searching for lost or misplaced items
• Scrap rates
• New workers
2-29
Other Factors Affecting Productivity
• Safety
• Shortage of IT workers
• Layoffs
• Labor turnover
• Design of the workspace
• Incentive plans that reward productivity
2-30
Outsourcing
• Higher productivity in another company is a key
reason organizations outsource work
• Improving productivity may reduce the need for
outsourcing
2-31
Improving Productivity
2-32