Presentation is loading. Please wait.

Presentation is loading. Please wait.

PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc.,

Similar presentations


Presentation on theme: "PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc.,"— Presentation transcript:

1 PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Operations Management Operations Strategy in a Global Environment Chapter 2

2 PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Outline  GLOBAL COMPANY PROFILE: BOEING  DEVELOPING MISSIONS AND STRATEGIES  Mission  Strategy  ACHIEVING COMPETITIVE ADVANTAGE THROUGH OPERATIONS  Competing on Differentiation  Competing on Cost  Competing on Response  TEN STRATEGIC OM DECISIONS

3 PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Outline - Continued  ISSUES IN OPERATIONS STRATEGY  Research  Preconditions  Dynamics  STRATEGY DEVELOPMENT AND IMPLEMENTATION  Identify Critical Success Factors  A Global view of Operations Cultural and Ethical Issues  Build and Staff the Organization  Integrate OM with Other Activities

4 PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Outline - Continued  GLOBAL OPERATIONS STRATEGY OPTIONS  International Strategy  Multidomestic Strategy  Global Strategy  Transnational Strategy

5 PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Learning Objectives When you complete this chapter, you should be able to : Identify or Define :  Mission  Strategy  Ten Decisions of OM  Multinational Corporations

6 PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Learning Objectives - Continued Describe or Explain :  Specific approaches used by OM to achieve strategies  Differentiation  Low Cost  Response  Four Global Operations Strategies  Why Global Issues are Important

7 PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Examples of Global Strategies  Boeing – both sales and production are worldwide.  Benetton – moves inventory to stores around the world faster than its competitor by building flexibility into design, production, and distribution  Sony – purchases components from suppliers in Thailand, Malaysia, and around the world  GM is building four similar plants in Argentina, Poland, China, and Thailand

8 PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Boeing Suppliers (777) FirmCountryParts AleniaItalyWing flaps AeroSpace Technologies AustraliaRudder CASASpainAilerons doors, wing section FujiJapanLanding gear GEC AvionicsUnited KingdomFlight computers Korean AirKoreaFlap supports Menasco Aerospace CanadaLanding gears Short BrothersIrelandLanding gear doors Singapore Aerospace SingaporeLanding gear doors

9 PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J The Role of  Maquiladoras  World Trade Organization (WTC)  North American Free Trade Agreement (NAFTA)  European Union (EU)

10 PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Management Issues in Global Operations Global Strategic Context  Differentiation  Cost leadership  Response Logistics Management Location Decisions Supply Chain Management

11 PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Supply-Chain Management  Sourcing  Vertical integration  Make-or-buy decisions  Partnering

12 PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Location Decisions  Country-related issues  Product-related issues  Government policy/political risk  Organizational issues

13 PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Materials Management  Flow of materials  Transportation options and speed  Inventory levels  Packaging  Storage

14 PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Defining Global Operations  International business - engages in cross-border transactions  Multinational Corporation - has extensive involvement in international business, owning or controlling facilities in more than one country  Global company - integrates operations from different countries, and views world as a single marketplace  Transnational company - seeks to combine the benefits of global-scale efficiencies with the benefits of local responsiveness

15 PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Some Multinational Corporations Workforce CompanyHome Country % Sales Outside Home Country % Assets Outside Home Country % Foreign Colgate- Palmolive USA7263NA Dow Chemical USA6050NA GilletteUSA6253NA HondaJapan6336NA IBMUSA Citicorp USA 3446 NA

16 PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Some Multinational Corporations Workforce CompanyHome Country % Sales Outside Home Country % Assets Outside Home Country % Foreign ICIBritain7850NA NestléSwitzerland PhilipsNetherlands SiemensGermany51NA38 Electronics Unilever Britain & Netherlands

17 PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Pontiac - the LeMans Included the Following  About $6,000 heads to South Korea for auto’s assembly  $3,500 goes to Japan for engines, axles, and electronics  $1,500 goes to Germany for design  $800 goes to Taiwan, Singapore, and Japan for smaller parts  $500 heads to England for marketing  $100 goes to Ireland for information technology  the rest  $7,600, goes to GM and its US bankers, insurance agents, and attorneys.

18 PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Reasons to Globalize Operations  Reduce costs (labor, taxes, tariffs, etc.)  Improve the supply chain  Provide better goods and services  Attract new markets  Learn to improve operations  Attract and retain global talent Tangible Intangible

19 PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Trade and Tariff  Maquiladoras - Mexican factories located along the U.S.-Mexico border that receive preferential tariff treatment  GATT - an international treaty that helps promote world trade by lowering barriers to the free flow of goods across borders  NAFTA - a free trade agreement between Canada, Mexico, and the United States

20 PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Trade Pays GDP (PPP*) per Person 1990 Growth Rates, % *PPP – Purchasing Power Parity

21 PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Free trade may take us into the era of the floating factory - a six person crew will take a factory from port to port in order to obtain the best market, material, labor and tax advantages

22 PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Achieving Global Operations -Four Considerations-  Global product design  Global process design and technology  Global factory location analysis  Impact of Culture and Ethics

23 PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Global Product Design  Remember social and cultural differences  packaging and marketing can help make product seem “domestic” but -  “liter” versus “quart”  “sweetness” and “taste”

24 PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Global Process Design and Technology  Information technology enables management of integrated, globally dispersed operation  Texas Instruments: 50 plants in 19 countries  Hewlett-Packard - product development teams in U.S., Japan, Great Britain, and Germany  Reduces time-to-market

25 PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Global Facility Location Analysis  Select CSFs based on parent organization;’s strategic or operations objectives  Obtain country-specific information on the CSFs  Evaluate each country’s CSFs using a 1 (bad) to 5 (good) rating scale  Sum the ratings Using CSFs for Country Selection

26 PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J You May Wish To Consider  national literacy rate  rate of innovation  rate of technology change  number of skilled workers  stability of government  product liability laws  export restrictions  similarity in language  work ethic  tax rates  inflation  availability of raw materials  interest rates  population  number of miles of highway

27 PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Global Impact of Culture and Ethics  Cultures differ! Some accept/expect:  variations in punctuality  long lunch hours  expectation of thievery  bribery  little protection of intellectual property

28 PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Ranking Corruption 1. Finland Denmark & New Zealand (Tie) 9.5 … 7.Canada 9.0 … 10. United Kingdom 8.7 … 16.United States 7.7 … 18. Germany & Israel (Tie) 7.3 … 20.Japan 7.1 … 31.Italy 5.2 … 59.China 3.5 … 62.Egypt 3.4 … 71.India & Russia (Tie) 2.7 … 101.Nigeria Bangladesh 1.2

29 PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J To Establish Global Services  Determine if sufficient people or facilities exist to support the service  Identify foreign markets that are open - not controlled by governments  Determine what services are of most interest to foreign customers  Determine how to reach global customers

30 PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Managing Global Service Operations Must take a different perspective on  Capacity planning  Location Planning  Facilities design and layout  Scheduling

31 PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Some Definitions  International business  A firm that engages in cross-border transactions.  Multinational Corporation (MNC)  A firm that has extensive involvement in international business, owning or controlling facilities in more than one country

32 PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Some Global Strategies  International Strategy: uses exports and licenses to penetrate the global area  Multidomestic Strategy: uses decentralized authority with substantial autonomy at each business  Global Strategy: Uses a high degree of centralization, with headquarters coordinating to seek standardization and learning between plants  Transnational Strategy: Exploits economies of scale and learning, as well as pressure for responsiveness, by recognizing that core competencies reside everywhere in the organization

33 PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Match Product & Parent  Arrow shirts  Braun Household Appliances  Burger King  Firestone Tires  Godiva Chocolate  Haagen_dazs Ice Cream  Jaguar Autos  MGM Movies  Lamborghini Autos  Goodrich Tires  Alpo Petfoods 1. Volkswagen 2. Bidermann International 3. Bridgestone 4. Campbell Soup 5. Credit Lyonnais 6. Ford Motor Company 7. Gillette 8. Grand Metropolitan 9. Michelin 10. Nestlé

34 PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Match Product & Country  Arrow shirts  Braun Household Appliances  Burger King  Firestone Tires  Godiva Chocolate  Haagen_Dazs Ice Cream  Jaguar Autos  MGM Movies  Lamborghini Autos  Goodrich Tires  Alpo Petfoods 1. France 2. Great Britain 3. Germany 4. Japan 5. United States 6. Switzerland

35 PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Developing Missions and Strategies

36 PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Mission  Mission - where are you going?  Organization’s purpose for being  Provides boundaries & focus  Answers ‘What do we provide society?’ © 1995 Corel Corp.

37 PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Mission of FedEx FedEx is committed to our People-Service-Profit philosophy. We will produce outstanding financial returns by providing total reliable, competitively superior, global air-ground transportation of high priority goods and documents that require rapid, time-certain delivery. Equally important, positive control of each package will be maintained using real time electronic tracking and tracing systems. A complete record of each shipment and delivery will be presented with our request for payment. We will be helpful, courteous, and professional to each other and the public. We will strive to have a completely satisfied customer at the end of each transaction.

38 PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Sample Mission - Merck The mission of Merck is to provide society with superior products and services - innovations and solutions that improve the quality of life and satisfy customer needs - to provide employees with meaningful work and advancement opportunities and investors with a superior rate of return

39 PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Mission of the Hard Rock Café To spread the spirit of Rock ‘n’ Roll by delivering an exceptional entertainment and dining experience. We are committed to being an important, contributing member of our community and offering the Hard Rock family a fun, healthy, and nurturing work environment while ensuring our long-term success.

40 PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Factors Affecting Mission Mission Philosophy & Values Profitability & Growth Environment CustomersPublic Image Benefit to Society

41 PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Mission/Strategy  Mission - where you are going  Strategy - how you are going to get there; an action plan

42 PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Strategy  Action plan to achieve mission  Shows how mission will be achieved  Company has a business strategy  Functional areas have strategies © 1995 Corel Corp.

43 PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Strategy Process Marketing Decisions Operations Decisions Fin./Acct. Decisions Company Mission Business Strategy Functional Area Strategies

44 PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Strategies for Competitive Advantage  Differentiation  Cost leadership  Quick response

45 PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Competing on Differentiation Uniqueness can go beyond both the physical characteristics and service attributes to encompass everything that impacts customer’s perception of value

46 PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Competing on Cost Provide the maximum value as perceived by customer Does not imply low value or low quality

47 PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Competing on Response  Flexibility  Reliability  Timeliness Requires institutionalization within the firm of the ability to respond

48 PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Competing, Regardless of the Basis, Requires the institutionalization within the firm of the ability to change, and to adapt

49 PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J OM’s Contribution to Strategy Response (Faster) Quality Product Process Location Layout Human Resource Supply Chain Inventory Scheduling Maintenance HP’s ability to follow the printer market Differentiation (Better) Cost leadership (Cheaper) Southwest Airlines No-frills service Sony’s constant innovation of new products Pizza Hut’s five-minute guarantee at lunchtime Federal Express’s “absolutely, positively on time” Motorola’s automotive products ignition systems Motorola’s pagers IBM’s after-sale service on mainframe computers Fidelity Security’s broad line of mutual funds FLEXIBILITY Design Volume LOW COST DELIVERY Speed Dependability QUALITY Conformance Performance AFTER-SALE SERVICE BROAD PRODUCT LINE Operations Decisions Examples Specific Strategy Used Competitive Advantage

50 PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Strategic OM Decisions  Goods & service design  Quality  Process & capacity design  Location selection  Layout design  Human resource and job design  Supply-chain management  Inventory  Scheduling  Maintenance

51 PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Goods & Services and the 10 OM Decisions

52 PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Goods & Services and the 10 OM Decisions – Continued

53 PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Goods & Services and the 10 OM Decisions – Continued

54 PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Goods & Services and the 10 OM Decisions – Continued

55 PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Process Design Low Moderate High Volume High Moderate Low Variety of Products Process-focused Job Shops (Print shop, emergency room, machine shop, fine dining Repetitive (modular) focus Assembly line (Cars, appliances, TVs, fast-food restaurants) Product-focused Continuous (steel, beer, paper, bread, institutional kitchen) Mass Customization Customization at high Volume (Dell Computer’s PC)

56 PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Operations Strategies for Two Drug Companies

57 PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Operations Strategies for Two Drug Companies - Continued

58 PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Operations Strategies for Two Drug Companies - Continued

59 PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Operations Strategies for Two Drug Companies - Continued

60 PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Characteristics of High ROI Firms  High quality product  High capacity utilization  High operating effectiveness  Low investment intensity  Low direct cost per unit From the PIMS study of the Strategic Planning Institute

61 PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Strategic Options Managers Use to Gain Competitive Advantage  28% - Operations Management  18% - Marketing/distribution  17% - Momentum/name recognition  16% - Quality/service  14% - Good management  4% - Financial resources  3% - Other

62 PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Strategic Options Managers Use to Gain Competitive Advantage  28% Operations Management  Low- cost product  Product-line breadth  Technical superiority  Product characteristics/differentiation  Continuing product innovation  Low-price/high-value offerings  Efficient, flexible operations adaptable to consumers  Engineering research development  Location  Scheduling

63 PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Preconditions - To Implement a Strategy One must understand:  Strengths & weaknesses of competitors and new entrants into the market  Current and prospective environmental, legal, and economic issues  The notion of product life cycle  Resources available with the firm and within the OM function  Integration of OM strategy with company strategy and with other functions.

64 PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Impetus for Strategy Change  Changes in the organization  Stages in the product life cycle  Changes in the environment

65 PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Stages in the Product Life Cycle Introduction Growth Maturity Decline Growth rate

66 PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Best period to increase market share R&D engineering are critical Product design and development are critical Frequent product and process design changes Over-capacity Short production runs High skilled-labor content High production costs Limited number of models Utmost attentions to quality Quick elimination of market-revealed design defects Introduction Strategy & Issues During Product Life  Company Strategy & Issues  OM Strategy & Issues

67 PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Strategy & Issues During Product Life Practical to change prices or quality image Marketing is critical Strengthen niche Forecasting is critical Product and process reliability Competitive product improvements and options Shift toward product oriented Enhance distribution Company Strategy & Issues OM Strategy & Issues Growth

68 PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Strategy & Issues During Product Life Poor time to increase market share Competitive costs become critical Poor time to change price, image, or quality Defend position via fresh promotional and distribution approaches Standardization Less rapid product changes and more minor annual model changes Optimum capacity Increasing stability of manufacturing process Lower labor skills Long production runs Attention to product improvement and cost cutting Re-examination of necessity of design compromises Company Strategy & Issues OM Strategy & Issues Maturity

69 PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Strategy & Issues During Product Life Cost control critical to market share Little product differentiation Cost minimization Overcapacity in the industry Prune line to eliminate items not returning Good margin Reduce capacity Company Strategy & Issues OM Strategy & Issues Decline

70 PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Strategy and Issues During a Product’s Life

71 PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Strategy Development and Implementation  Identify critical success factors  Build and staff the organization

72 PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J SWOT Analysis Process  Environmental Analysis  Determine Corporate Mission  Form a Strategy

73 PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J SWOT Analysis to Strategy Formulation Strategy Mission External Opportunities Internal Strengths Internal Weaknesses External Threats Competitive Advantage

74 PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Identifying Critical Success Factors DecisionsSample Option Chapter ProductCustomized, or standardized 5 QualityDefine customer expectations and how to achieve them 6, S6 ProcessFacility size, technology, capacity 7, S7 LocationNear supplier or customer 8 LayoutWork cells or assembly line 9 Human resourceSpecialized or enriched jobs 10, S10 Supply chain Single or multiple source suppliers 11, S11 InventoryWhen to reorder, how much to keep on hand 12, 14,16 ScheduleStable or fluctuating productions rate 13, 15 Maintenance Repair as required or preventive maintenance 17 Marketing Service Distribution Promotion Channels of distribution Product positioning (image, functions) Finance/Accounting Leverage Cost of capital Working capital Receivables Payables Financial control Lines of credit Production/Operations

75 PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Activity Mapping: Southwest Airline’s Low Cost Competitive Advantage Courteous, but limited passenger service Lean, productive employees Short haul, point-to-point routes, often to secondary airports High aircraft utilization Standardized fleet of Boeing 737 aircraft Frequent, reliable schedules Competitive Advantage: Low Cost

76 PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Activity Mapping: Southwest Airline’s Low Cost Competitive Advantage Courteous, but limited passenger service No seat assignments No baggage transfers Automated ticketing machines No meals

77 PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Activity Mapping: Southwest Airline’s Low Cost Competitive Advantage Short haul, point-to-point routes, often to secondary airports Lower gate costs at secondary airports High number of flights, reduces employee idle time between flights

78 PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Activity Mapping: Southwest Airline’s Low Cost Competitive Advantage Frequent, reliable schedules High number of flights reduces employee idle time between flights Saturate a city with flights lowering administrative costs per passenger for that city

79 PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Activity Mapping: Southwest Airline’s Low Cost Competitive Advantage Standardized fleet of Boeing 737 aircraft Pilot training on only one type of aircraft Reduced maintenance inventory required because of only one type of aircraft Excellent supplier relations with Boeing has aided financing

80 PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Activity Mapping: Southwest Airline’s Low Cost Competitive Advantage High aircraft utilization Flexible employees and standard planes aids scheduling Flexible union contracts Maintenance personnel trained on only one type of aircraft 20 minute gate turnarounds

81 PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Activity Mapping: Southwest Airline’s Low Cost Competitive Advantage Lean, productive employees High level of stock ownership Hire for attitude, then train High employee compensation Empowered employees Automated ticket machines

82 PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Activity Mapping: Southwest Airline’s Low Cost Competitive Advantage Courteous, but limited passenger service Lean, productive employees Short haul, point-to-point routes, often to secondary airports High aircraft utilization Standardized fleet of Boeing 737 aircraft Frequent, reliable schedules Competitive Advantage: Low Cost

83 PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Southwest Airline’s Low Cost Competitive Advantage

84 PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Vanguard’s Activity System A broad array of mutual funds excluding some fund categories Efficient investment management approach offering good consistent performance Straightforward client communication and education Strict cost control Direct distributions Very low expenses passed on to client

85 PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J How It Works Company Mission Business Strategy Functional Area Strategies Marketing Decisions Operations Decisions Fin./Acct. Decisions If competitive advantage, leads to achieving Distinctive competencies affect

86 PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Four International Operations Strategies

87 PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Multidomestic Strategy Operating decisions are decentralized to each country to enhance local responsiveness

88 PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Global Strategy Operating decisions are centralized and headquarters coordinates the standardization and learning between facilities

89 PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J Transnational Strategies Combines the benefits of global-scale efficiencies with the benefits of local responsiveness

90 PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J International Strategy Global markets are penetrated using exports and licenses


Download ppt "PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc.,"

Similar presentations


Ads by Google