Module 1 Competing With Operations

Process Power Concepts
Module 1: Competing with Operations
Presentation Game Plan
Course Introduction and Rules of

Engagement
What is Operations Management? Linking Operations to Strategy Competing with Operations

2
Course Intro and Rules of Engagement
Instructor Introduction
Learning from your

mistakes is smart.
Learning from other

peoples mistakes is genius.
5
Student Responsibilities
The heavy lifting is up to you!

6
Course Management Philosophy
Active learning OM Concepts Quantitative Tools Experiential Learning
Course web site: use it Paperless is good! Rules for test session The Syllabus is our
contract
Syllabus talk!
What is Operations Management?
Operations is . . .
The answer to the question,

What does your company do?
Processes that add value to goods or

services for customers.
10
Operations Management is . . .
the systematic design, direction, and

control of processes that transform inputs into services and products for internal and external customers.
a business discipline that applies concepts

from other fields, including strategic management, industrial engineering, and operations research.
11
OM is important to you because . . .
Process management is important in

all business disciplines.
Any performance issue regarding a

business is grounded in operations.
Intelligent discussion of operations

helps you win in a job interview!
12
Linking Operations to Strategy

Strategy
People
Process
Technology
Execution A business is like a house built from the top down.

13
Linking Operations to Strategy
Corporate strategy: provides an overall

direction that serves as the framework for carrying out all organizational functions.
Operations strategy: defines corporate

strategy execution, and drives the development of a customer-centric culture.
14
What is a Process?
Inputs
Activity
Output: Value to the Customer
15
What is a Process?
16
Core Processes and Support Processes
17
Core Processes and Support Processes
18
Manufacturing vs. Services
19
Two Kinds of Customers
20
A Supply Chain Perspective
Processes can be linked to form a supply chain: interrelated processes across different firms that produce products and services to meet customer needs.
Source: Supply Chain Council. 2008. SCOR Version 9.0 Overview
21
Competing With Operations
Cost Quality Delivery Flexibility

22

TABLE 1.2 COST 1. Low-cost operations QUALITY 2. Top quality Delivering an outstanding service or product Producing services or products that meet design specifications on a consistent basis Quickly filling a customers order Meeting delivery-time promises Quickly introducing a new science or a product |
Competitive Priorities
Process Considerations Processes must be designed and operated to make them efficient Example Costco
DEFINITIONS, PROCESS CONSIDERATIONS, AND EXAMPLES OF COMPETITIVE PRIORITIES Definition Delivering a service or a product at the lowest possible cost
May require a high level of customer contact and may require superior product features Processes designed and monitored to reduce errors and prevent defects
Ferrari
3. Consistent quality
McDonalds
TIME 4. Delivery speed 5. On-time delivery Design processes to reduce lead time Planning processes to increase percent of customer orders shipped when promised Cross-functional integration and involvement of critical external suppliers Dell United Parcel Service (UPS) Li & Fung
6. Development speed
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Competitive Priorities
Process Considerations Low volume, close customer contact, and easily reconfigured Example Ritz Carlton
TABLE 1.2 FLEXIBILITY
DEFINITIONS, PROCESS CONSIDERATIONS, AND EXAMPLES OF COMPETITIVE PRIORITIES Definition Satisfying the unique needs of each customer by changing service or products designs Handling a wide assortment of services or products efficiently Accelerating or decelerating the rate of production of service or products quickly to handle large fluctuations in demand
7. Customization
8. Variety
Capable of larger volumes than processes supporting customization Processes must be designed for excess capacity
Amazon.com
9. Volume flexibility
The United States Postal Service (USPS)
24
Order Winners and Order Qualifiers
25
Competitive Priority Metrics
26
Quantitative Focus: Productivity Metrics
Labor Productivity Labor productivity = Output ($ or Units) Units of Labor (Hrs)
Multifactor Productivity Multifactor productivity = Value of Output ($) Labor ($) + Materials ($) + Overhead ($)
27
Productivity Metrics & Competing with Ops
Process design Process evaluation Process management Process control Process improvement
28
Presentation Recap
Course Introduction and Rules of Engagement What is Operations Management? Linking Operations to Strategy Competing with Operations
29
Module 1: Competing with Operations
30

Module 1 Competing With Operations

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Process Power Concepts