Competitiveness

How effectively an organization meets the wants and needs of customers relative to
others that offer similar goods or services
Mission
The reason for the existence of an organization.
Mission statement
States the purpose of an organization. The mission statement should answer the
question of "What business are we in?"
Goals
Provide detail and scope of the mission.
Strategies
Plans for achieving organizational goals. Org. strategies have a major impact on what the
org. does and how it does it. Serves as a road map for reaching the organizational
destinations. Orgs. contain both Organizational strategies and Functional level
strategies.
Tactics
The methods and actions taken to accomplish strategies. More specific than strategies
and they provide guidance and direction for carrying out actual operations. This is the
"how to" of the organization.
Upgrade to remove ads
Only $1/month
Operations
The actual "doing" part of the process
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
Core Competencies
The special attributes or abilities that give an
organization a competitive edge. To be effective, core competencies and strategies need
to be aligned.
Order Qualifiers
Characteristics that customers perceive as minimum standards of acceptability to be
considered as a potential for purchase. What do you have to do to get your foot in the
door.
Order Winners
Characteristics of an organization's goods or services that cause it to be perceived as
better than the competition, things that set you apart from the competition
Environmental Scanning
The considering of events and trends that present threats or opportunities for a
company. Environmental Scanning is needed to identify Internal Factors - Strengths and
Weaknesses and External Factors - Opportunities and Threats (SWOT)
Key External Factors
Economic conditions
Political conditions
Legal environment
Technology
Competition
Markets
Key Internal Factors
Human Resources
Facilities and equipment
Financial resources
Customers
Products and services
Technology
Suppliers
Operations strategy
The approach, consistent with organization strategy, that is used to guide the operations
function.
Time-based strategies
Strategies that focus on the reduction of time needed to accomplish tasks.
It is believed that by reducing time, costs are lower, quality is higher, productivity is
higher, time-to-market is faster, and customer service is improved.
Quality-based strategy
Strategy that focuses on quality in all phases of an organization.
Pursuit of such a strategy is rooted in a number of factors (improving quality in
everything we touch and do):
Trying to overcome a poor quality reputation
Desire to maintain a quality image
A part of a cost reduction strategy
Upgrade to remove ads
Only $1/month
Productivity
A measure of the effective use of resources, usually expressed as the ratio of output to
input
What are productivity measures are useful for?
Tracking an operating unit's performance over time
Judging the performance of an entire industry or country
Why does production matter?
High productivity is linked to higher standards of living
As an economy replaces manufacturing jobs with lower productivity service jobs, it is
more difficult to maintain high standards of living
Higher productivity relative to the competition leads to competitive advantage in the
marketplace
Pricing and profit effects
For an industry, high relative productivity makes it less likely it will be supplanted by
foreign industry
Productivity
Productivity = Output/Input
Partial Measures
Output/Single Input ; Output/Labor ; Output/Capital
Multifactor Measures
Output/Multiple Inputs ; Output/Labor + Machine ; Output/Labor +Capital +Energy
Total Measure
Total goods or services produced/All Inputs used to produce them
Productivity Growth
Productivity Growth = ((Current Productivity - Previous Productivity)/Previous
Productivity) x 100%
Multifactor Productivity
Output/Labor +Materials +Overhead
How to improve productivity
1. Develop productivity measures that are meaningful, and for all operations
2. Determine critical (bottleneck, things keeping you from improving) operations
3. Develop methods for productivity improvements
4. Establish reasonable goals (doable goals but also require you to challenge yourself,
those are the goals that are most motivating)
5. Make it clear that management supports and encourages productivity improvement
6. Measure and publicize improvements
7. Don't confuse productivity (output divided by input) with efficiency (a percentage, the
value of actual output divided by actual capacity)
Process Yield
A useful measure related to productivity
Service sector productivity
Difficult to measure and manage because:
It involves intellectual activities
It has a high degree of variability
Upgrade to remove ads
Only $1/month
Hierarchical Planning
Mission TO Goals TO Organizational Strategies TO Functional Strategies TO Tactics
Why do 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
Businesses Compete Using Operations
1. Product and service design
2. Cost
3. Location
4. Quality
5. Quick response
6. Flexibility
7. Inventory management
8. Supply chain management
9. Service
10. Managers and workers
Competitiveness
How effectively an organization meets the wants and needs of customers relative to
others that offer similar goods or services
Organizations compete through some combination of their marketing and operations
functions
What do customers want?
How can these customer needs best be satisfied?
Competitiveness
how effectively an organization meets the wants and needs of customers relative to
others that offer similar goods or services
marketing, operations
Organizations compete through some form of their ______ and ______ functions. (what
do customers want, how can these customer needs best be satisfied)
Marketing's Influence
identifying consumer wants and needs, pricing, advertising and promotion
operations
Businesses compete using _________.
how business compete
Product and service design
Cost
Location
Quality
Quick Response
Flexibility
Inventory management
Supply chain management
Service
Managers and workers
Why Some Organizations Fail
-Neglecting operations strategy
-Failing at SWOT
-Too much emphasis on short-term
-Too much focus on product and service design and not enough on process design and
improvement
-Neglecting investments in capital and human resources
-Failing to establish good internal communications and cooperation
-Failing to consider customer wants and needs
Upgrade to remove ads
Only $1/month
Hierarchical Planning
Mission--> Goals--> Organizational strategies--> Functional strategies--> Tactics
Mission
the reason for an organization's existence
Goals
provide detail and the scope of the mission; can be viewed as organizational
destinations, basis of organizational strategies
Strategy
a plan for achieving goals; serves as a roadmap for reaching the organizational
destinations
Mission statement
states the purpose of the organization; should answer the question of "what business
are were in?"
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
organization strategy
Tactics
methods and actions taken to accomplish strategies; the "how to" part of the process
Operations
the actual "doing" of the process
Core competencies
the special attributes or abilities that give an organization a competitive edge
aligned
To be effective core competencies and strategies need to be ________.
Core competencies, environmental scanning, SWOT
Effective strategy formulation requires taking into account: (3 things)
Upgrade to remove ads
Only $1/month
Order qualifiers, order winners
Successful strategy formulation also requires taking into account: (2 things)
Order qualifiers
characteristics that customers perceive as minimum standards of acceptability for a
product or service to be considered as a potential service
Order winners
characteristics of an organization's goods or services that cause it to be perceived as
better than the competition
Internal and External factors
Environmental scanning is necessary to identify ________ and ________.
Internal factors
strengths and weaknesses
External factors
opportunities and threats
Key external factors
-Economic conditions
-Political conditions
-Legal environment
-Technology
-Competition
-Markets
Key internal factors
-Human Resources
-Facilities and equipment
-Financial resources
-Customers
-Products and services
-Technology
-Suppliers
-Other
Operations Strategy
the approach, consistent with organization strategy, that is used to guide the operations
function
Quality-based strategy
strategy focuses on quality in all phases of the organization; rooted in: trying to
overcome a poor quality reputation, desire to maintain a quality image, desire to catch up
to competition, part of a cost reduction strategy
Time-based Strategies
strategies that focus on the reduction of time needed to accomplish tasks
time
It is believe that by reducing ______, costs are lower, quality is higher, productivity is
higher, time-to-market is faster, and customer service is improved.
Upgrade to remove ads
Only $1/month
Areas where organizations have achieved time reductions
Planning time, Product/service design time, processing time, changeover time, delivery
time, response time for complaints
Agile operations
a strategic approach for competitive advantage that emphasizes the use of flexibility to
adapt and prosper in an environment of change; involves blending of: cost, quality,
reliability, and flexibility
Productivity
a measure of the effective use of resources, usually expressed as the ratio of output to
input; outputs/inputs
Tracking an operating unit's performance over time
Judging the performance of an entire industry or country
Productivity measures are useful for (2 things)
High
______ productivity is linked to higher standards of living.
difficult
As an economy replaces manufacturing jobs with lower productivity service jobs, it is
more ________ to maintain high standards of living.
Higher
________ productivity relative to the competition leads to competitive advantage in the
marketplace.
less
For an industry, high relative productivity makes is ______ likely it will be supplanted by
foreign industry.
Partial measures
output/single input
Multifactor measures
output/multiple inputs
Total measure
goods or services produced/
All inputs used to produce them
increasing
U.S. multifactor productivity has been _______.
Upgrade to remove ads
Only $1/month
Productivity growth
Current P - Previous P
-------------------------------- x 100%
Previous P
involves intellectual activities
has a high degree of variability
Service sector productivity is difficult to measure and manage because it (2 things)
process yield
A useful measure related to productivity is ______ ______. A ratio of output of good
product to the quantity of raw material input.
dependent
Where services are involved, process yield measurement is often _______ on the
particular process.
-Methods
-Quality
-Management
-Technology
-Capital
Factors affecting productivity: (5 things)
-Develop P measures for all operations
-Determine critical (bottleneck) operations
-Develop methods for productivity improvements
-Establish reasonable goals
-Make it clear mgmt supports and encourages productivity improvements
-Measure and publicize improvements
Do not confuse P with efficiency
Improving Productivity: (6 things)
Bottleneck
operation with the least capacity
Rule of bottlenecks
Improving the efficiency of any other operation in the process, other than the bottleneck,
will NOT improve the efficiency of the system.
Which of the following is least likely to affect the cost an organization incurs in
producing its products or services?
Price
An organization's mission statement serves as the basis for:
E. organizational goals.
Organizations' missions serve as the broad underpinning for their goals.
Which of the following would be least important in the pursuit of a time-based strategy?
A. cost minimization
Many means for minimizing cost would have the effect of making a time-based strategy
less feasible.
Competitiveness doesn't include:
C. profitability.
A company can be competitive relative to similar companies and still be unprofitable if
the competitive environment is inherently unprofitable.
Product design and choice of location are examples of _______ decisions.
A. strategic
These decisions are made high in the hierarchy.
Scheduling personnel is an example of an operations management:
B. operational decision.
Staffing-level decisions are made low in the hierarchy.
Upgrade to remove ads
Only $1/month
Productivity is expressed as:
D. output divided by input.
Productivity is the ratio of outputs to inputs.
The ratio of good output to quantity of raw material input is called
B. process yield.
This is sometimes a useful productivity measure in service industries.
The fundamental purpose for the existence of any organization is described by its:
D. mission statement.
A mission statement is the organization's attempt to justify its existence.
Core competencies in organizations generally do not relate to:
E. sales price.
What a firm charges for its outputs is not a core competency. What it can charge,
however, is potentially related to a core competency.