operations strategy and competiveness
TRANSCRIPT
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Operations strategy and
competiveness
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Business strategy
A long-range plan for a business.
Operations strategy
A long-range plan for the operations function
that specify the design and use of resources tosupport the business strategy.
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Developing a Business Strategy
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Relationship between the
business strategy and the
functional strategies
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Operations Strategy and the Design of
Operations Functions
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Four Broad Categories of Competitive
Priorities Cost
A competitive priority focusing on low cost
Quality
A competitive priority focusing on the quality of goods
and services.
Time
A competitive priority focusing on speed and on-time
delivery Flexibility
A competitive priority focusing on offering a wide
variety of goods or services.
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The Need for Trade offs
The need to focus more on one competitive
priority than on others.
Order qualifier
Competitive priorities that must be met for a
company to qualify as a competitor in the
marketplace.
Order winners
Competitive priorities that win orders in themarketplace.
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Translating Competitive Priorities into
Production Requirements
1. Structure Operations decisions related to thedesign of the production process, such ascharacteristics of facilities used, selection of
appropriate technology, and the flow of goodsand services through the facility.
2. Infrastructure Operations decisions related tothe planning and control systems of the
operation, such as the organization of theoperations function, the skills and pay of workers,and quality control approaches.
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Technology can be used by
companies to gain a competitiveadvantage and should be acquired to
support the companys chosen
competitive priorities.
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Measuring Productivity
Productivity is a measure that indicates howeffectively an organization is using its resources.It is how efficiently an organization convertsinputs into outputs
Total Productivity is computed as the ratio oforganizational outputs divided by inputs.
Partial productivity
Productivity computed as a ratio of output toonly one input (e.g., labor, materials, machines)
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PRODUCTIVITY MEASURES
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Partial productivity Productivity computed as a ratio of
output to only one input (e.g., labor,
materials, machines).
Multifactor productivity
Productivity computed as a ratio ofoutput to several, but not all, inputs.
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Partial Productivity
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Multifactor Productivity
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Seatwork
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Product Design and Process
Selection
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Product design
The process ofdefiningall of the products
characteristics
Service design
The process of establishing all the characteristics
of the service, including physical, sensual, and
psychological benefits.
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Steps in Product Design Process
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Break-even analysis
A technique used to compute the amount ofgoods a company would need to sell to coverits costs.
Fixed costs Costs a company incurs regardless of how
much it produces.
Variable costs Costs that vary directly with the amount of
units produced.
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Types of Processes
Intermittent operations
Processes used to produce a variety of
products with different processing
requirements in lower volumes
Repetitive operations
Processes used to produce one or a few
standardized products in high volume.
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Project process
A type of process used to make a one-at-a-
time product exactly to customer
Specifications
Batch process
A type of process used to produce a small
quantity of products in groups or batches
based on customer orders or specifications.
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Line process
A type of process used to produce a large
volume of a standardized product.
Continuous process
A type of process that operates continually to
produce a high volume of a fully standardized
product
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Designing Process
Process flow analysis
A technique used for evaluating a process in
terms of the sequence of steps from inputs to
outputs with the goal of improving its design.
Process flowchart
A chart showing the sequence of steps in
producing the product or service.
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Make-to-stock strategy
Produces standard products and services forimmediate sale or delivery.
Assemble-to-order strategy
Produces standard components that can be
combined to customer specifications.
Make-to-order strategy
Produces products to customer specifications
after an order has been received.
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Process Performance Metrics
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Different types of technologies can significantly
enhance product and process design.
Information technology
Technology that enables storage, processing,
and communication of information within and
between firms
Enterprise resource planning (ERP)
Large software programs used for planning
and coordinating all resources throughout the
entire enterprise.
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Global positioning systems (GPS)
A type of wireless technology that usessatellite transmission to communicate exact
locations
Radio frequency identification (RFID)
A wireless technology that uses memory chipsequipped with radio antennas attached toobjects used to transmit streams of data
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Automation
Using machinery to perform work without humanoperators.
Flexible manufacturing system (FMS)
A type of automated system that provides theflexibility of intermittent operations with theefficiency of continuous operations
Numerically controlled (NC) machine A machine controlled by a computer that can
perform a variety of tasks.
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Computer-aided design (CAD)
A system that uses computer graphics to
design new product
Computer-integrated manufacturing (CIM)
A term used to describe the integration of
product design, process planning, and
manufacturing using an integrated computer
system