Operations Management

Session 2
Exploring Operations Management
Functions and Decisions:
The Faltering Factory Case
Call Order (Randomized Serial No.)
37 16 02 21 39

13 25 40 08
 Operations Management:
Introductory Concepts contd.

Heizer & Render Text Chapter 1 & 2

 Snapshot from Dell

A redesigned build table trimmed 20 seconds off the assembly

process: (reduced long reaches by 50%, and lessened “turns”
by 80% - saves time and reduces risk of injury)
 Operations Strategy Basics

“The creation, and effective use, of Operations

capabilities for achieving organizational goals.”
 Operations’ Strategic Role in the
Organization

• Output

• Cost }
} Competitive
• Quality } Priorities:
• Delivery } Qualifying
• vs. } Order
Flexibility
Winning
}
• Sustainability
 Strategic Trade-Offs in Operations
• Cutting costs by picking
cheapest vendor may
Cost
affect quality

Flexibility Delivery • Offering greater variety

and customization may
increase response time
Quality Sustainabilit
y
• The most ‘efficient’
materials and
processes may not be
desirable for the
environment & society
An Operations “Trilemma”
 Competing Through Operations:
Attacking
• Some examples:
– Apple, Wal-mart, Southwest Airlines, Hitachi-Seiki
(Mechatronics), Amazon, Reliance

• Capabilities: be(com)ing better at the game

– Developing integrated systems of technologies & skills

• Positioning: appealing to a different need or

priority
– Seek advantage along dimensions under-emphasized
by competitors
 Competing Through Operations:
Defending and/or Counter-Attacking
• Some examples:
– HLL vs. Nirma, American Connector vs. DJC
(Japanese) entry into US market

• Recognize attack quickly and emulate strategy,

before attacker gets too far ahead, or develops
unique capabilities
• Identify and attack weaknesses in attacker’s
systems
• Exploit internal Operations strengths to (re)group
and react
 Operations Evolution
• Societal evolution:
Pre-Industrial – Industrial – Post-Industrial

• Epochs in Operations Management:

Industrial Taylor Ford Computers Toyota

Revolution System System & OR System

Craft TQM/
System BPR/
SCM
Refer Text Figure
1.4 (p. 11) etc. etc.
 The Strategy Process

Competitive
Order winners
Dynamics at
Order Qualifiers
the marketplace

Strategic options for Generic Competitive Priorities

Sustaining Quality, Cost,
competitive advantage Delivery, Flexibility

Firm level
Strengths & Corporate
Weaknesses Strategy

Strategic decisions for Measures for

Operations System Operations Operational Excellence
Strategy