Professional Documents
Culture Documents
Environment and
Operations Strategy 2
PowerPoint presentation to accompany
Heizer and Render
Operations Management, Global Edition, Eleventh Edition
Principles of Operations Management, Global Edition, Ninth Edition
© 2014
© 2014
Pearson
Pearson
Education
Education 2-1
Outline
© 2014
© 2014
Pearson
Pearson
Education
Education 2-6
Boeing’s Global Supply-
Chain Strategy
© 2014
© 2014
Pearson
Pearson
Education
Education 2-7
Boeing’s Global Supply-
Chain Strategy
Figure 2.2
Figure 2.2
Profitability and
Environment Growth
Mission
Benefit to
Society
Functional Area
Missions
Finance/
Marketing Operations Accounting
Figure 2.3
© 2014 Pearson Education 2 - 32
Sample Missions
Sample OM Department Missions
Product design To design and produce products and
services with outstanding quality and
inherent customer value.
Quality management To attain the exceptional value that is
consistent with our company mission and
marketing objectives by close attention to
design, procurement, production, and field
service operations
Figure 2.3
© 2014 Pearson Education 2 - 33
Sample Missions
Sample OM Department Missions
Location To locate, design, and build efficient and
economical facilities that will yield high
value to the company, its employees, and the
community.
Layout design To achieve, through skill, imagination, and
resourcefulness in layout and work methods,
production effectiveness and efficiency
while supporting a high quality of work life.
Figure 2.3
© 2014 Pearson Education 2 - 34
Sample Missions
Sample OM Department Missions
Supply-chain To collaborate with suppliers to develop
management innovative products from stable, effective,
and efficient sources of supply.
Inventory To achieve low investment in inventory
consistent with high customer service levels
and high facility utilization.
Scheduling To achieve high levels of throughput and
timely customer delivery through effective
scheduling.
Maintenance To achieve high utilization of facilities and
equipment by effective preventive
maintenance and prompt repair of facilities
and equipment.
Figure 2.3
© 2014 Pearson Education 2 - 35
Strategy
► Action plan untuk
mencapai misi
► Area fungsional memiliki
strategi
► Strategi memanfaatkan
kesempatan dan
kekuatan, menetralisasi
ancaman, dan
menghindari kelemahan
Product DIFFERENTIATION:
Innovative design Safeskin’s innovative gloves
Broad product line Fidelity Security’s mutual
Quality funds
After-sales service Caterpillar’s heavy equipment
service
Process Experience Hard Rock Café’s dining
experience
Location
COST LEADERSHIP: Differentiation
Low overhead Franz-Colruyt’s warehouse-
Layout type stores (better)
Effective capacity Southwest Airline’s
use aircraft utilization
Human
resource Response
Inventory Walmart’s sophisticated (faster)
management distribution system
Cost
Supply chain
leadership
RESPONSE: (cheaper)
Inventory Flexibility Hewlett-Packard’s response to
volatile world market
Reliability FedEx’s “absolutely,
Scheduling
positively, on time”
Quickness Pizza Hut’s 5-minute guarantee
Maintenance Figure 2.4
at lunchtime
© 2014 Pearson Education 2 - 41
Issues In Operations Strategy
▶ Resources view
▶ Value-chain analysis
▶ Porter’s Five Forces model
▶ Operating in a system with many
external factors
▶ Constant change
Sales
3D printers
Figure 2.5
© 2014 Pearson Education 2 - 43
Product Life Cycle
Introduction Growth Maturity Decline
Product design Forecasting critical Standardization Little product
and development Product and Fewer product differentiation
critical
process reliability changes, more Cost
Frequent product minor changes minimization
Competitive
and process
OM Strategy/Issues
Figure 2.5
© 2014 Pearson Education 2 - 44
SWOT Analysis
Mission
Internal External
Strengths Opportunities
Analysis
Internal External
Weaknesses Threats
Strategy
Form a Strategy
Build a competitive advantage, such as low price, design, or volume
flexibility, quality, quick delivery, dependability, after-sale service,
broad product lines.
Figure 2.6
© 2014 Pearson Education 2 - 46
Strategy Development and
Implementation
▶ Mengidentifikasi key success factors
▶ Mengintegrasikan OM dengan
aktivitas lain
Service Leverage
Distribution Cost of capital
Promotion Working capital
Channels of distribution Receivables
Product positioning Payables
(image, functions) Financial control
Lines of credit
Competitive Advantage:
Low Cost
High Frequent,
Aircraft Reliable
Utilization Standardized Schedules
Fleet of Boeing
737 Aircraft
Figure 2.8
© 2014 Pearson Education 2 - 49
Activity Mapping at
Southwest Airlines
Courteous, but
Limited Passenger
Service
Competitive Advantage:
No seat assignments
No Low
baggageCost
transfers
No meals (peanuts)
High Frequent,
Aircraft Reliable
Utilization Standardized Schedules
Fleet of Boeing
737 Aircraft
Figure 2.8
© 2014 Pearson Education 2 - 50
Activity Mapping at
Southwest Airlines
Courteous, but
Limited Passenger
Service
No meals (peanuts)
Lean,
Lower gate costs at secondary airports Short Haul, Point-to-
Productive Point Routes, Often to
Employees
High number of flights reduces employee Secondary Airports
idle time between flights
Competitive Advantage:
Low Cost
High Frequent,
Aircraft Reliable
Utilization Standardized Schedules
Fleet of Boeing
737 Aircraft
Figure 2.8
© 2014 Pearson Education 2 - 51
Activity Mapping at
Southwest Airlines
Courteous, but
Limited Passenger
Service
High Frequent,
Aircraft Reliable
Utilization Standardized Schedules
Fleet of Boeing
737 Aircraft
Figure 2.8
© 2014 Pearson Education 2 - 53
Activity Mapping at
Southwest Airlines
Courteous, but
Limited Passenger
Service
High Frequent,
Aircraft Reliable
Utilization Standardized Schedules
Fleet of Boeing
737 Aircraft
Figure 2.8
© 2014 Pearson Education 2 - 55
Implementing Strategic
Decisions
TABLE 2.1 Operations Strategies of Two Drug Companies
BRAND NAME DRUGS, INC. GENERIC DRUGS CORP.
COMPETITIVE PRODUCT DIFFERENTIATION LOW COST STRATEGY
ADVANTAGE STRATEGY
Product Heavy R&D investment; extensive labs; Low R&D investment; focus on
selection and focus on development in a broad range development of generic drugs
design of drug categories
Quality Quality is major priority, standards Meets regulatory requirements on a
exceed regulatory requirements country-by-country basis, as necessary
Process Product and modular production Process focused; general production
process; tries to have long product runs processes; “job shop” approach, short-
in specialized facilities; builds capacity run production; focus on high utilization
ahead of demand
Location Still located in city where it was founded Recently moved to low-tax, low-labor-
cost environment
Score for BIM = (.2 * 3) + (.2 * 4) + (.2 * 5) + (.1 * 4) + (.1 * 5) + (.1 * 4) + (.1 * 2) = 3.9
International strategy
Cost Reduction
(eg, Harley-Davidson
U.S. Steel)
• Import/export or
license existing
product
Low
Low High
Local Responsiveness
(Quick Response and/or Differentiation)
© 2014 Pearson Education 2 - 64
Global Operations Strategy
Options High
Figure 2.9
Cost Reduction
International
strategy
(eg, Harley-Davidson
U.S. Steel)
• Import/export or
license existing
product
Low
Low High
Local Responsiveness
(Quick Response and/or Differentiation)
© 2014 Pearson Education 2 - 65
Global Operations Strategy
Options High
Figure 2.9
Global strategy
(eg, Caterpillar
Cost Reduction
Texas Instruments
Otis Elevator)
International
• Standardize product
strategy
(eg, Harley-Davidson
• U.S.
Economies
Steel)
of scale
• Import/export or
• Cross-cultural
license existing
product
learning
Low
Low High
Local Responsiveness
(Quick Response and/or Differentiation)
© 2014 Pearson Education 2 - 66
Global Operations Strategy
Options High Global strategy
(eg, Caterpillar Figure 2.9
Texas Instruments
Otis Elevator)
• Standardize product
• Economies of scale
• Cross-cultural learning
Cost Reduction
International
strategy
(eg, Harley-Davidson
U.S. Steel)
• Import/export or
license existing
product
Low
Low High
Local Responsiveness
(Quick Response and/or Differentiation)
© 2014 Pearson Education 2 - 67
Global Operations Strategy
Options High Global strategy
(eg, Caterpillar Figure 2.9
Multidomestic
Texas Instruments
Otis Elevator)
strategy
•
•
(eg,
StandardizeHeinz,
product
Economies of scale
McDonald’s
• The
Cross-cultural Body Shop
learning
Cost Reduction
Low
Low High
Local Responsiveness
(Quick Response and/or Differentiation)
© 2014 Pearson Education 2 - 68
Global Operations Strategy
Options High Global strategy
(eg, Caterpillar Figure 2.9
Texas Instruments
Otis Elevator)
• Standardize product
• Economies of scale
• Cross-cultural learning
Cost Reduction
International Multidomestic
strategy strategy
(eg, Harley-Davidson (eg, Heinz, McDonald’s
U.S. Steel) The Body Shop
Hard Rock Cafe)
• Import/export or • Use existing domestic
license existing model globally
product • Franchise, joint
ventures,
subsidiaries
Low
Low High
Local Responsiveness
(Quick Response and/or Differentiation)
© 2014 Pearson Education 2 - 69
Global Operations Strategy
Options High Global strategy
Figure 2.9
Transnational
(eg, Caterpillar
Texas Instruments
Otis Elevator) strategy
• (eg,
Standardize Coca-Cola,
product Nestlé)
• Economies of scale
• Move material,
• Cross-cultural learning
Cost Reduction
learning
International Multidomestic
strategy strategy
(eg, Harley-Davidson (eg, Heinz, McDonald’s
U.S. Steel) The Body Shop
Hard Rock Cafe)
• Import/export or • Use existing domestic
license existing model globally
product • Franchise, joint
ventures,
subsidiaries
Low
Low High
Local Responsiveness
(Quick Response and/or Differentiation)
© 2014 Pearson Education 2 - 71
Ranking Corruption
Rank Country 2012 CPI Score (out of 100)
1 Demark, Finland, New Zealand 90 Least
4 Sweden 88 Corrupt
5 Singapore 87
6 Switzerland 86
7 Australia, Norway 85
9 Canada, Netherlands 84
13 Germany 79
14 Hong Kong 77
17 Japan, UK 74
19 USA 73
37 Taiwan 61
39 Israel 60
45 South Korea 56 Most
80 China 39 Corrupt
123 Vietnam 31
133 Russia 28
© 2014 Pearson Education 2 - 72
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otherwise, without the prior written permission of the publisher.
Printed in the United States of America.