1. Engineering management science
Chapter # 5
Engineering management science
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2. REFERENCE CHAPTER 5 : Engineering Management by Fraidoon Mazda
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3. World of Manager Stockholders Owners/ Local Community Associations
Trade
Suppliers
Managers
Customers
The Public at
Large
Governments
Employees
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4. Strategy is a common vision that unites an organization, provides consistency in decisions, and keeps the organization moving in the right direction
Visioning is big in corporate America. Everyone from IBM to the Little League team has mission statements, visions, philosophies, and core values.
Mission statements are the “constitution” for an organization, the corporate directive. But they aren’t any good unless they can be converted into action. And that’s what this chapter is all about -- converting strategy into results.
Gather mission or vision statements from several companies with which you are familiar. Is their mission or vision evident in the way they do business?
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5. Strategy Action plan to achieve mission
Shows how mission will be achieved
Company has a business strategy
Functional areas have strategies
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6. Strategy Concept of strategy - different meanings to different people.
“A strategy is a pattern or plan that integrates an organization’s major goals, policies, & action sequences into a cohesive whole”
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7. How It Works Company Mission Business Strategy Functional Area
Strategies
Marketing
Decisions
Operations
Fin./Acct.
This slide can be used to tie coverage of Chapter 2 together.
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8. Strategy Formulation
Managers analyze current situation to develop strategies achieving mission.
SWOT analysis: a planning to identify:
Organizational Strengths and Weaknesses.
Strengths: manufacturing ability, marketing skills.
Weaknesses: high labor turnover, weak financials.
Environmental Opportunities and Threats.
Opportunities: new markets.
Threats: economic recession, competitors
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9. Planning & Strategy Formulation
Corporate-level strategy
develop a plan of action
maximizing long-run value
SWOT analysis
identifies strengths &
weaknesses inside the
firm and opportunities
& threats in the
environment.
Business-level strategy
a plan of action to take
advantage of opportunities
and minimize threats
Functional-level strategy
a plan of action improving
department’s ability to
create value
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10. Strategy Formulation Define the primary task Assess core competencies
Determine order winners & order qualifiers
Position the firm
Define the primary task -- What are you in the business of doing?
Assess core competencies -- What do you do better than anyone else?
Determine order winners and order qualifiers -- What wins orders in the marketplace? What qualifies a product or service to be considered for purchase?
Position the firm -- For what do you wish to be known?
On what do you wish to compete?
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11. Activities that Lead to Core Competencies
Shared problem solving
Importing
knowledge
Rapid Integration
of new technologies
& methodologies
Core
competencies
Although Chaparral Steel is known for its low costs and sophisticated technology, its core competency is not technology, but the ability to transform technology rapidly into new products and processes. Chaparral is a good example of a company the is continually developing its core competencies. See page 35 for further discussion.
Experimentation
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12. Activities that Reinforce Core Rigidities
Limited problem solving
Screened
knowledge
Inability
to innovate
Core
rigidities
Core competencies that are not being updated or enhanced can easily become core rigidities. Core rigidities paralyze a company and prevent it from changing to meet emerging needs and environments. Activities that lead to core rigidities are the mirror images of those that encourage core competencies.
Think of companies that at one time seemed unbeatable but are now struggling. What happened?
Biased experimentation
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13. What’s the most difficult part about strategy?
Doing it!
Staying the course.
Making the pieces fit.
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14. Focuses employees on common goals & priorities
Translates strategy into measurable objectives
Aligns day-to-day decisions with the strategic plan
Policy deployment tries to focus everyone in an organization on common goals and priorities by translating corporate strategy into measurable objectives throughout the various functions and levels of the organization. As a result, managers and workers alike are able to align their day-to-day decisions with the strategic plan.
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15. Organization Life Cycle
Reflects changes take place in industry over time.
Birth stage: firms seek to develop a winning technology.
VHS vs. Betamax in video, or 8-track vs. cassette in audio.
Expansion stage: Product gains customer acceptance & grows rapidly.
New firms enter industry, production improves, distributors emerge.
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16. Diversification stage:
Competitor rivalry increases, prices fall.
Grow in other related areas
Decline and Renewal stage: falling demand for product.
Prices fall, weaker firms leave industry.
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17. Assignment # Write down the lessons from Beer Game
Length of assignment should be no more than 3 pages
Submission Date: 22 Dec. 2014
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