Professional Documents
Culture Documents
Operations Management
William J. Stevenson
8th edition
2-2 Competitiveness, Strategy, and Productivity
CHAPTER
2
Competitiveness, Strategy,
and Productivity
Competitiveness:
• Flexibility
• Inventory management
• Service
2-7 Competitiveness, Strategy, and Productivity
Mission/Strategy/Tactics
Strategy
• 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
2-11 Competitiveness, Strategy, and Productivity
Mission
Goals
Organizational Strategies
Functional Goals
Strategy Example
Example 1
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
2-13 Competitiveness, Strategy, and Productivity
Examples of Strategies
• Low cost
• Scale-based strategies
• Specialization
• Flexible operations
• High quality
• Service
2-14 Competitiveness, Strategy, and Productivity
Operations Strategy
Strategy Formulation
• Distinctive competencies
• Environmental scanning
• SWOT
• Order qualifiers
• Order winners
2-18 Competitiveness, Strategy, and Productivity
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
2-19 Competitiveness, Strategy, and Productivity
• Economic conditions
• Political conditions
• Legal environment
• Technology
• Competition
• Markets
2-20 Competitiveness, Strategy, and Productivity
• Human Resources
• Facilities and equipment
• Financial resources
• Customers
• Technology
• Suppliers
2-21 Competitiveness, Strategy, and Productivity
• 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
2-22 Competitiveness, Strategy, and Productivity
Time-based Strategies
Planning
Designing
Processing
Changeover On time!
Delivery
2-23 Competitiveness, Strategy, and Productivity
Productivity
• 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
2-24 Competitiveness, Strategy, and Productivity
Productivity
• Partial measures
• output/(single input)
• Multi-factor measures
• output/(multiple inputs)
• Total measure
• output/(total inputs)
Outputs
Productivity =
Inputs
2-25 Competitiveness, Strategy, and Productivity
Productivity Growth
Productivity Growth =
Current Period Productivity – Previous Period Productivity
Previous Period Productivity
2-26 Competitiveness, Strategy, and Productivity
Measures of Productivity
Table 2.4
Measures
Table 2.5
Example 3
Example 3 Solution
MFP = Output
Labor + Materials + Overhead
MFP = 2.20
2-30 Competitiveness, Strategy, and Productivity
Capital Quality
Technology Management
2-31 Competitiveness, Strategy, and Productivity
• Use of Internet
• Computer viruses
• Scrap rates
• New workers
2-32 Competitiveness, Strategy, and Productivity
• Safety
• Shortage of IT workers
• Layoffs
• Labor turnover
Bottleneck Operation
Figure 2.3
10/hr
Machine
Machine #1
#1
10/hr
Machine
Machine #2
#2 Bottleneck
Bottleneck 30/hr
Operation
Operation
Machine
Machine #3
#3 10/hr
Machine
Machine #4
#4 10/hr
2-34 Competitiveness, Strategy, and Productivity
Improving Productivity
Value Results
VO10
ABTco example