TEN STRATEGIC OM

DECISION
Presented by Group (6)
Introduction

Also called as operations decisions

Make effective decisions in 10 areas of OM

Achieve differentiation, low cost and response

Support missions and strategies

Ten Operation Decisions

Goods and service Determine costs, quality and human resource

design Lower limits of cost and upper limits of quality

Determine customers' expectations

Quality
Establish procedures and policies

Process and Determine technology, quality and HR

capacity design Determine basic cost structure

Determine organization's success

Location selection
Errors make overwhelm other efficiencies

Material flows, capacity needs, personnel levels

Layout design
Technology and inventory requirement
Ten Operation Decisions

Human resources and People are most important in total system

job design Talent and skills important and cost determine

Supply-chain Determine what to made and what to purchase

management Require mutual trust for effective purchasing

Customer satisfaction, suppliers, production

Inventory schedule and human resource planning

Efficient production schedule developed

Scheduling
Demands on HR and facilities determine

Regarding desired reliability and stability

Maintenance
Decisions made to maintain reliability and stability
 OM contribution to Strategy

Operation Strategy Used Competitive

Decision Advantage

Product Flexibility Differentiation

Quality Low Cost Low Cost
Process Delivery Response
Location After-sale
Layout Service
HR
Supply chain
Inventory
Scheduling
Maintenance
Ten Operation Decisions

Difference between goods and services

Implementation of decision influence proportion of goods

and services

Decision are same for both goods and services

Although importance and method of implementation

depend on ratio of goods and services
Example

" To provide outstanding French fine dining for the

people of Chicago"

Ignore cost leadership and quick response

Focus on differentiation
 Example
Variety of Products Variety of Products
(High) (High)
Volume (High) Volume (Low)

Cafeteria Fine-dining
(Mass Restaurant
Customizatio (Process
n focus) focus)

Fast-Food Institutional
Restaurant Kitchen
(Repetitive (Product
focus) focus)
Variety of Products Variety of
(Moderate) Products (Low)
Volume (Moderate) Volume (High)
Conclusion

Use ten decision of operations management for

competitive advantage

Not just for fine-dining restaurants but for all