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Operations Management For Competitive Advantage © The McGraw-Hill Companies, Inc., 2001 C HASE A QUILANO J ACOBS ninth edition 1 Operations Strategy and.

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Presentation on theme: "Operations Management For Competitive Advantage © The McGraw-Hill Companies, Inc., 2001 C HASE A QUILANO J ACOBS ninth edition 1 Operations Strategy and."— Presentation transcript:

1 Operations Management For Competitive Advantage © The McGraw-Hill Companies, Inc., 2001 C HASE A QUILANO J ACOBS ninth edition 1 Operations Strategy and Competitiveness Operations Management For Competitive Advantage C HASE A QUILANO J ACOBS ninth edition Chapter 2

2 Operations Management For Competitive Advantage © The McGraw-Hill Companies, Inc., 2001 C HASE A QUILANO J ACOBS ninth edition 2 Chapter 2 Operations Strategy and Competitiveness  Operations Strategy  Competitive Dimensions  Order Qualifiers and Winners  A Framework for Manufacturing Strategy  Service Strategy Capacity Capabilities  Productivity Measures

3 Operations Management For Competitive Advantage © The McGraw-Hill Companies, Inc., 2001 C HASE A QUILANO J ACOBS ninth edition 3 Operations Strategy Example Strategy Process Customer Needs Corporate Strategy Operations Strategy Decisions on Processes and Infrastructure More Product Increase Org. Size Increase Production Capacity Build New Factory

4 Operations Management For Competitive Advantage © The McGraw-Hill Companies, Inc., 2001 C HASE A QUILANO J ACOBS ninth edition 4 Competitive Dimensions  Cost (Must be low cost producer)  Product Quality and Reliability (Quality free)  Delivery Speed (Dependable and fast)  Delivery Reliability (On time delivery)  Coping with Changes in Demand  Flexibility and New Product Introduction Speed  Other Product-Specific Criteria

5 Operations Management For Competitive Advantage © The McGraw-Hill Companies, Inc., 2001 C HASE A QUILANO J ACOBS ninth edition 5 5 Dealing with Trade-offs Cost Quality DeliveryFlexibility FOCUS Plant within a Plant (PWP) Traditional Approach Advanced Approaches World Class Manufacturing Trade-offs

6 Operations Management For Competitive Advantage © The McGraw-Hill Companies, Inc., 2001 C HASE A QUILANO J ACOBS ninth edition 6 Dealing with Trade-offs Cost Quality DeliveryFlexibility For example, if we improve customer service problem solving by cross- training personnel to deal with a wider-range of problems, they may become less efficient at dealing with commonly occurring problems. For example, if we reduce costs by reducing product quality inspections, we might reduce product quality.

7 Operations Management For Competitive Advantage © The McGraw-Hill Companies, Inc., 2001 C HASE A QUILANO J ACOBS ninth edition 7 Order Qualifiers and Winners  Order qualifiers?  They are the basic criteria that permit the firms products to be considered as candidates for purchase by customers.  Order winners?  They are the criteria that differentiates the products and services of one firm from another.

8 Operations Management For Competitive Advantage © The McGraw-Hill Companies, Inc., 2001 C HASE A QUILANO J ACOBS ninth edition 8 Service Breakthroughs  A brand name car can be an “order qualifier”  Repair services can be “order winners” Examples: Warranty, Roadside Assistance, Leases, etc.

9 Operations Management For Competitive Advantage © The McGraw-Hill Companies, Inc., 2001 C HASE A QUILANO J ACOBS ninth edition 9 Operations Strategy Framework Customer Needs New : Old product : product Competitive dimensions & require Quality, Dependability, Speed, Flexibility, and Price Operations & Supplier capabilities TechnologyPeopleSystemsR&DCIMJITTQMDistribution Support Platforms Financial management Human resource managementInformation management Enterprise capabilities

10 Operations Management For Competitive Advantage © The McGraw-Hill Companies, Inc., 2001 C HASE A QUILANO J ACOBS ninth edition 10 Steps in Developing a Manufacturing Strategy  1. Segment the market according to the product group.  2. Identify product requirements, demand patterns, and profit margins of each group.  3. Determine order qualifiers and winners for each group.  4. Convert order winners into specific performance requirements.

11 Operations Management For Competitive Advantage © The McGraw-Hill Companies, Inc., 2001 C HASE A QUILANO J ACOBS ninth edition 11 Service Strategy Capacity Capabilities  Process-based – Capacities that transforms material or information and provide advantages on dimensions of cost and quality.  Systems-based – Capacities that are broad-based involving the entire operating system and provide advantages of short lead times and customize on demand.  Organization-based – Capacities that are difficult to replicate and provide abilities to master new technologies.

12 Operations Management For Competitive Advantage © The McGraw-Hill Companies, Inc., 2001 C HASE A QUILANO J ACOBS ninth edition 12 Total Measure Productivity  Total measure Productivity = Outputs Inputs or  = Goods and services produced All resources used

13 Operations Management For Competitive Advantage © The McGraw-Hill Companies, Inc., 2001 C HASE A QUILANO J ACOBS ninth edition 13 Partial Measure Productivity  Partial measures of productivity =  Output or Output or Output or Output Labor Capital Materials Energy

14 Operations Management For Competitive Advantage © The McGraw-Hill Companies, Inc., 2001 C HASE A QUILANO J ACOBS ninth edition 14 Multifactor Measure Productivity  Multifactor measures of productivity =  Output. Labor + Capital + Energy or  Output. Labor + Capital + Materials

15 Operations Management For Competitive Advantage © The McGraw-Hill Companies, Inc., 2001 C HASE A QUILANO J ACOBS ninth edition 15 Example of Productivity Measurement  You have just determined that your service employees have used a total of 2400 hours of labor this week to process 560 insurance forms. Last week the same crew used only 2000 hours of labor to process 480 forms.  Which productivity measure should be used?  Answer: Could be classified as a Total Measure or Partial Measure.  Is productivity increasing or decreasing?  Answer: Last week’s productivity = 480/2000 = 0.24, and this week’s productivity is = 560/2400 = So, productivity is decreasing slightly.


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