competitiveness, strategy, and productivity. competitiveness: how effectively an organization meets...
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Competitiveness, Strategy, and Productivity
Competitiveness:Competitiveness:
How effectively an organization meets the wants and needs of customers relative to others that offer similar goods or services
Businesses Compete Using MarketingBusinesses Compete Using Marketing
Identifying consumer wants and needs Pricing Advertising and promotion
Businesses Compete Using OperationsBusinesses Compete Using Operations
Product and service design Cost Location Quality Quick response
Businesses Compete Using OperationsBusinesses Compete Using Operations
Flexibility Inventory management Supply chain management Service
Why Some Organizations FailWhy Some Organizations Fail
Too much emphasis on short-term financial performance
Failing to take advantage of strengths and opportunities
Failing to recognize competitive threats Neglecting operations strategy
Why Some Organizations FailWhy Some Organizations Fail
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
Failing to consider customer wants and needs
Mission/Strategy/TacticsMission/Strategy/Tactics
How does mission, strategies and tactics relate todecision making and distinctive competencies?
StrategyStrategy TacticsTacticsMissionMission
StrategyStrategy
Strategies Plans for achieving organizational goals
Mission The reason for existence for an organization
Mission Statement Answers the question “What business are we in?”
Goals Provide detail and scope of mission
Tactics The methods and actions taken to accomplish strategies
Planning and Decision MakingPlanning and Decision Making
Strategy ExampleStrategy Example
Rita is a high school student. She would like to have a career in business, have a good job, and earn enough income to live comfortably
Mission: Live a good life Goal: Successful career, good income Strategy: Obtain a college education Tactics: Select a college and a major Operations: Register, buy books, take
courses, study, graduate, get job
Example 1
Examples of StrategiesExamples of Strategies
Low cost Scale-based strategies Specialization Flexible operations High quality Service
Strategy and TacticsStrategy and Tactics
Distinctive CompetenciesThe special attributes or abilities that give anorganization a competitive edge. Price Quality Time Flexibility Service Location
Banks, ATMsConvenienceLocationLocation
DisneylandNordstroms
Superior customer service
ServiceService
Burger KingSupermarkets
VarietyVolume
FlexibilityFlexibility
Express Mail, Fedex,One-hour photo, UPS
Rapid deliveryOn-time delivery
TimeTime
Sony TVLexus, CadillacPepsi, Kodak, Motorola
High-performance design or high quality Consistent quality
QualityQuality
U.S. first-class postageMotel-6, Red Roof Inns
Low CostPricePrice
Examples of Distinctive CompetenciesExamples of Distinctive Competencies
Operations StrategyOperations Strategy
Operations strategy – The approach, consistent with organization strategy, that is used to guide the operations function.
Quality and Time StrategiesQuality and Time Strategies
Quality-based strategies Focuses on maintaining or
improving the quality of an organization’s products or services
Quality at the source Time-based strategies
Focuses on reduction of time needed to accomplish tasks
Time-based StrategiesTime-based Strategies
JAN FEB MAR APR MAY JUN
Planning
Processing
Changeover On time!
Designing
Delivery
ProductivityProductivity
Productivity A measure of the effective use of resources,
usually expressed as the ratio of output to input Productivity ratios are used for
Planning workforce requirements Scheduling equipment Financial analysis
ProductivityProductivity
Partial measures output/(single input)
Multi-factor measures output/(multiple inputs)
Total measure output/(total inputs)
Productivity = Outputs
Inputs
Productivity GrowthProductivity Growth
Current Period Productivity – Previous Period ProductivityPrevious Period Productivity
Productivity Growth =
Measures of ProductivityMeasures of ProductivityTable 2.4
Partial Output Output Output Output
measures Labor Machine Capital Energy
Multifactor Output Output
measures Labor + Machine Labor + Capital + Energy
Total Goods or Services Produced
measure All inputs used to produce them
Units of output per kilowatt-hourDollar value of output per kilowatt-hour
Energy Productivity
Units of output per dollar inputDollar value of output per dollar input
Capital Productivity
Units of output per machine hourmachine hour
Machine Productivity
Units of output per labor hourUnits of output per shiftValue-added per labor hour
Labor Productivity
Examples of Partial Productivity Examples of Partial Productivity MeasuresMeasures
Table 2.5
Example 3Example 3
7040 Units Produced
Sold for $1.10/unit
Cost of labor of $1,000
Cost of materials: $520
Cost of overhead: $2000
What is the multifactorproductivity?
Ans. 2.20
Example 3 SolutionExample 3 Solution
MFP = OutputLabor + Materials + Overhead
MFP = (7040 units)*($1.10)$1000 + $520 + $2000
MFP = 2.20
Figure 2-2Figure 2-2
Factors Affecting ProductivityFactors Affecting Productivity
Capital Quality
Technology Management
Standardization Quality Use of Internet Computer viruses Searching for lost or misplaced items Scrap rates New workers
Other Factors Affecting ProductivityOther Factors Affecting Productivity
Safety Shortage of IT workers Layoffs Labor turnover Design of the workspace Incentive plans that reward productivity
Other Factors Affecting ProductivityOther Factors Affecting Productivity
Bottleneck OperationBottleneck Operation
Figure 2.3