Transcript Production and Operations Management: Manufacturing and

Operations Management
CHASE
For Competitive Advantage
AQUILANO
ninth edition
JACOBS
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Operations Management
For Competitive Advantage
Chapter 2
Operations Strategy
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ninth edition
©The McGraw-Hill Companies, Inc., 2001
Operations Management
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ninth edition
Chapter 2
Operations Strategy and Competitiveness
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Operations Strategy

Competitive Dimensions

Order Qualifiers and Winners

A Framework for Manufacturing Strategy

Service Strategy Capacity Capabilities

Productivity Measures
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Operations Strategy
Strategy Process
Example
Customer Needs
More Product
Corporate Strategy
Operations Strategy
Increase Org. Size
Increase Production Capacity
Decisions on Processes
and Infrastructure
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Build New Factory
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Competitive Dimensions
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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
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Dealing with Trade-offs
Cost
Flexibility
Traditional
Approach
Delivery
Quality
Plant within a Plant (PWP)
World Class Manufacturing
FOCUS
FOCUS
FOCUS
FOCUS
Advanced Approaches
Trade-offs
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Dealing with Trade-offs
For example, if we reduce costs by reducing product
quality inspections, we might reduce product quality.
For example, if we
improve customer service
problem solving by crosstraining personnel to deal
with a wider-range of
problems, they may
become less efficient at
dealing with commonly
occurring problems.
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Cost
Flexibility
Delivery
Quality
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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.
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Service Breakthroughs
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A brand name car
can be an “order
qualifier”
Repair services can be “order winners”
Examples: Warranty, Roadside Assistance,
Leases, etc.
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Operations Strategy Framework
Customer Needs
New
: Old
product : product
Competitive
dimensions & require
Quality, Dependability,
Speed, Flexibility, and Price
Enterprise capabilities
Operations & Supplier capabilities
Technology
Systems
People
R&D
CIM
JIT
TQM
Distribution
Support Platforms
Financial management
Human resource management
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Steps in Developing a Manufacturing
Strategy
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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.
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Service Strategy Capacity Capabilities
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Process-based
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Systems-based
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Capacities that transforms material or
information and provide advantages on
dimensions of cost and quality.
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.
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Total Measure Productivity
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Total measure Productivity = Outputs
Inputs
or
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= Goods and services produced
All resources used
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Partial Measure Productivity
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Partial measures of productivity =
Output or Output or Output or Output
Labor
Capital
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Multifactor Measure Productivity
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Multifactor measures of productivity =
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Output
Labor
+
Capital
.
+
Energy
or
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Output
Labor
+
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Example of Productivity Measurement
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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 =
0.23. So, productivity is decreasing slightly.
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