Ch2 Operations Strategy and Competitiveness.ppt

8/19/2019 Ch2 Operations Strategy and Competitiveness.ppt

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Chapter 2

Operations Strategy and

Competitiveness


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Strategic PlanningA process for getting from wherethe company is today to wherecompany would like to be in thefuture.A process for getting from “here”to “there.”


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Strategic Planning StepsPreparing a mission statementCreating a visionSetting goals

ormulating strategies

!esigning tactics"valuating process and takingcorrective action

#easuring results or outcomes


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Strategic Planning StepsMission

What is our business? (Who we are?) Focus is on “today” (Here!)

Vision

What we hope to be. Focus is on “future” (There!)


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Strategic Planning Stepsoa sWhat we "ust do to achie#e #ision.

$hou d be "easurab e.

Strategies

$n broad terms% what must we do toachieve goal&!oes not say how.


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Strategic Planning Steps!epends on opportunities and threats

Conduct environmental scan

Also depends on companies strengths'core competencies( and weakness

Conducting an environmental scan

and identifying companiesstrengths and weakness is a S)O*analysis.


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S)O*

$nternal S + Strengths) +

)eakness

",ternal O +Opportunities * + *hreats


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Strategic Planning Steps *actics

)hat must we do to make strategieswork&

%#a uation and correcti#e action &re tactic wor'in ? &re they "o#in you c oser to achie#in

oa ?f not* ta'e correcti#e action by chan in

tactics.


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Strategic Planning Steps+utco"e

+utco"e of strate ic p annin processTe s us if strate ic p annin process wassuccessfu .

Was oa was achie#ed?

f not* repeat.


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",ample - Strategic Plan#ission Sue is a -/ yr. old high schoolsenior0ision 1e successful in business2oal 1ecome a C O of a ma3or co. at 45

Strategies 2et a business degree *actics 2o to CS67% ma3or in inance% get

internship with idelity$nvestments% become president of

S A% get 4.8 or better 2PA"valuation9Correctiveaction

Are tactics working&

Outcome Position at age 45


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",ample : Strategic Plan#ission "d is a ;: yr. old overweight

male0ision


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",ample 4 Strategic Plan#ission )e are in business of selling

menBs dress shoes in S 00ision ",pand market area to include So.

Ca.2oal Capture 4= of So. Ca. market in

- yr.Strategies ",pand product line% increase

marketing eDort *actics Carry womenBs shoes carry more

shoe lines including athletic shoesand sandals Advertise in ma3ornewspapers.

"valuation9Corrective

Are tactics working&


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StarbuckBs Strategic Plan

Mission state"ent,%stab ish $tarbuc's as the pre"ier pur#eyor of

the finest coffee in the wor d whi e "aintaininour unco"pro"isin princip es whi e we row.-

What s wron with $tarbuc' s "ission

state"ent?


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StarbuckBs Strategic PlanoaTo estab ish $tarbuc' s as the "ostreco ni/ed and respected brand in thewor d.

What is re0uire"ent that oa shou d

"eet?1oes $tarbuc' s oa "eet it?


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StarbuckBs Strategic PlanTo achie#e this oa * the $tarbuc' sp ans to

rapid y e2pand its retai operations*row its specia ty sa es and other

operations* andse ecti#e y pursue opportunities to

e#era e the $tarbuc' s brand throu h theintroduction of new products andthe de#e op"ent of new distributionchanne s.


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StarbuckBs Strategic PlanAre these steps strategies ortactics&


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Answer

*hey are Strategies E board statementof what company will do to achieve

goals% but doesnBt say how. *actics would tell us% for e,ample%how the company plans to e,pand

retail operations.or e,ample% open more retail stores inairports and malls.


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ed",Bs #ission Fed%2 pro#ides access to a rowin

oba "ar'etp ace throu h a networ' ofsupp y chain* transportation* business andre ated infor"ation ser#ices.


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#ore on


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CS67 College of 1usiness9"co

#issionThe 3o e e of 4usiness and %cono"ics at3a ifornia $tate 5ni#ersity* 6orthrid e is dedicated toeducatin the eaders of to"orrow.

4y offerin a cha en in curricu u"* s"a er c asssi/es* state7of7the7art faci ities* and nationa yreco ni/ed pro ra"s* the 3o e e offers a tru yuni0ue educationa e2perience.


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!eveloping an OperationsStrategy

Operations Strategy is a plan for usingthe operational capabilities of a

company to decide how it willcompete.)ill it compete on

Price,

Quality,Time,Flexibility?

One% some or all&


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Competing on Price &

ODering product at a lower pricerelative to competition)orks if there are many competitorsoDering same product or service.$f you of a product with a high degreeof customiFation% does it make sensefor you to compete on price&#ust also have lower &&& relative tocompetitors.


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Competing on Huality &

Huality of productHuality of service1oth

!oes competing on Iuality meanthat a company canBt compete onprice because it% if it oDers betterIuality% it will charge a higher price&

!epends on how Iuality aDects &&&$f it increases &&&&% yes.$f it decreases &&&% not necessarily.


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Competing on *ime &

Ti"e8speed one of "ost i"portantco"petition priorities

Ti"e re ated issues in#o #e

Rapid delivery:

Focused on shorter ti"e between orderp ace"ent and de i#ery

On-time delivery:

1e i#er product e2act y when needed e#eryti"e


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Competing on le,ibility &

Product flexibility:%asi y switch production fro" one ite" to

another %asi y custo"i/e product8ser#ice to "eetspecific re0uire"ents of a custo"er

Volume flexibility: &bi ity to ra"p production up and down to "atch"ar'et de"ands


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#easuring Productivity

Productivity =Output

Inputs

9roducti#ity is a "easure of how efficient yinputs are con#erted to output.


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9artia "easuresoutput8(sin e input)

Mu ti7factor "easures5ses so"e but not a inputsoutput8("u tip e inputs)

Tota "easureuses a inputsoutput8(: #a ue of a inputs)


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Measures of 9roducti#ityMeasures of 9roducti#ity

Partial Output Output Outputmeasures Labor Machine Energy

Multifactor Output Outputmeasures Labor + Machine Labor + Capital + Energy

Total oods or !ervices Producedmeasure " value of all inputs used to produce them

" l f P ti l P d ti it" amples of Partial Productivity


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#nits of output per $ilo%att&hour 'ollar value of output per $ilo%att&hour

EnergyProductivity

MachineProductivity

LaborProductivity

",amples of Partial Productivity",amples of Partial Productivity#easures#easures

#nits of output per labor&hour 'ollar value of output per labor&hour

#nits of output per machine&hour 'ollar value of output per machine&hour


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7umerical ",ample

Output Labor Machine

6nits 5== , ,

@ours , :> >

Cost9unit , J8 J4

Price9unit J-5 , ,


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Partial #easures

hrs(LaborOutputof 0alue'ollar

tyProductiviLabor =

1-(,22"

hrs(,-

"34.//

hrs(,-

"*.5unit6.//tyProductiviLabor ===

",plain meaning&


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Partial #easures

cost5hr(78Labor6hrs(78LaborProduced#nits

costLabor

Produced#nitstyProductiviLabor

=

=

1(,"26,-

./tyProductiviLabor ==

",plain meaning&


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hrs(Machine

Produced#nitstyProductiviMachine =

Partial #easures

)(2)-

.//tyProductiviMachine ==

",plain meaning&


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#ultiEfactor

cost5hr(78Labor6hrs(78Laborcost5hr(78Machine6hrs(78MachineProduced#nits

CostLaborCostMachineProduced#nits

M9P

+=

+=


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,*(,

"26,-")6-.//

cost5hr(78Labor6hrs(78Laborcost5hr(78Machine6hrs(78MachineProduced#nits

M9P

=

+=

+=

#ultiEfactor


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#easure Outputs $nputsPartial 6nits or

dollars6nits ordollars

#ultiEfactor 6nits ordollars

!ollars

*otal 6nits ordollars

!ollars


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Summary

Output in units9$nput in hrs. + Outputper input hour

Output in J9$nput in hrs. + KProduced output worth JK per input hr.Output in units9$nput in J + LProduced L units per J spent on inputOutput in J9$nput in J + MProduced M units per J spent on input


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1ottleneck Operation

!andingMachine!andingMachine Polishing

Polishing./ units5hr

)/units

5hr

1ottleneck1ottleneckoperationoperation


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$mproving Productivity

% i"inate bott enec' operations% i"inate non7#a ue added steps5se i"pro#ed techno o y

"pro#e 0ua ity;ess rewor'More ood units produced the first ti"e9roducti#ity shou d "easure nu"ber of oodunits produced the first ti"e

Ch2 Operations Strategy and Competitiveness.ppt

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