Businesses Compete Using Operations

1. Product and service design2. Cost3. Location4. Quality5. Quick response6. Flexibility7. Inventory management8. Supply chain management9. Service10. Managers and workers

Why Some Organizations Fail

• Neglecting operations strategy • Failing to take advantage of strengths and opportunities• Failing to recognize competitive threats• Too much emphasis in product and service design and not enough on

improvement• Neglecting investments in capital and human resources• Failing to establish good internal communications and cooperation• Failing to consider customer wants and needs

Mission

• Mission– The reason for an organization’s existence

• Mission statement– States the purpose of the organization– The mission statement should answer the

question of “What business are we in?”

McDonald’s Mission Statement• McDonald's brand mission is to "be our customers' favorite place and way

to eat." Our worldwide operations have been aligned around a global strategy called the Plan to Win centering on the five basics of an exceptional customer experience -- People, Products, Place, Price and Promotion. We are committed to improving our operations and enhancing our customers' experience.– http://www.mcdonalds.com/corp/about/mcd_faq/student_research.html

Goals• The mission statement serves as the basis for

organizational goals• The mission and goals often relate to how an

organization wants to be perceived by the general public, and by its employees, suppliers and customers

• Goals– Provide detail and the scope of the mission

• Goals can be viewed as organizational destinations– Goals serve as the basis for organizational strategies

Strategies• Strategy

– A plan for achieving organizational goals• Strategies are the roadmaps for reaching the organizational

destinations– Organizations have

• Organizational strategies– Overall strategies that relate to the entire organization– Support the achievement of organizational goals and mission

• Functional level strategies– Strategies that relate to each of the functional areas and that

support achievement of the organizational strategy

Tactics and Operations• Tactics– The methods and actions taken to accomplish

strategies– They are more specific than strategies– Tactics provide guidance and direction for carrying out

actual operations– Tactics is the “how to” part of the process

(e.g how to reach the destination following the strategy roadmap)

• Operations – The actual “doing” part of the process

Strategy Formulation

• Order qualifiers – Characteristics that customers perceive as minimum

standards of acceptability to be considered as a potential purchase

• Order winners– Characteristics of an organization’s goods or services

that cause it to be perceived as better than the competition

Factors Affecting Productivity

Capital

Methods

Technology Management

Quality

Improving Productivity

1. Develop productivity measures for all operations

2. Look at the system as a whole in deciding which operations are most critical

3. Develop methods for productivity improvements

4. Establish reasonable goals5. Make it clear that management supports and encourages

productivity improvement

6. Measure and publicize improvements

Don’t confuse productivity with efficiency