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Competitiveness, Strategy
2 and Productivity
How ?
Some combination of Marketing and Operations functions
Businesses Compete Using Marketing
Iphone: $199
Example of Advertising
Quick response
Quick delivery and quick repair time
Examples of long wait time for Toyota prius & Honda
Civic Hybrid
Service
Managers and workers must be competent and
motivated
Automobile dealers
Why Some Organizations Fail
• Too much emphasis on short-term financial
performance at the expense of R&D
• Failing to take advantage of strengths &
opportunities
• Failing to recognize competitive threats
• Failing to consider customer wants & needs
• Neglecting operations strategy (capability)
• And more…
Mission/Strategy/Tactics
“How To”
Provide guidance for operations
Missions and goals are add no value unless they are put to practice
Strategy Example
Mission
Goals
Organizational Strategies
Functional Goals
Finance Marketing Operations
Strategies Strategies Strategies
n
Strategy Formulation
• Link strategy directly to organization’s mission statement
• Identify Core competencies
• SWOT Analysis
Strengths Weaknesses
Opportunities Threats
• Coordinate with marketing to identify Order Qualifiers and Order
Winners and rate importance to characteristics
• Order qualifiers: minimum standards of acceptability for a
potential purchase (A car with 25 miles per gallon)
• Order winners: goods or services that cause it to be better than
the competitors (A car with 50 miles per gallon: Toyota Prius 2010)
Strategy Formulation
• Environmental scanning
• Recent events, trends, traditions
• External Factors
• Economic conditions, Political conditions, Legal conditions,
Technology, Competition, Markets
• Internal factors
• Human resources, facilities and equipment, financial resources,
customers, products and services, technology, suppliers, etc.
•
high quality hard to find gourmet foods
Strategic OM Decisions
Decision Area Affects
Product and service design Costs, quality liability and environmental
Capacity Cost structure, flexibility
Process selection and layout Costs, flexibility, skill level, capacity
Time-based strategies
Focuses on reduction of time needed to accomplish
tasks
DHL known for its urgent package delivery
Productivity
Outputs
= Inputs
Productivit
y
•Planning workforce requirements
• Scheduling equipment
• Financial analysis
Computing Productivity
Previous Productivity = 80
Current Productivity = 84 Growth = 84 – 80 × 100 = 5%
80
• Problem 1
• A company that processes fruits
and vegetables is able to produce
400 cases of canned peaches in
one-half hour with four workers.
What is labor productivity?
• Answer: 200 cases per labor hour
26
Example
CapitalManagement
Technology Quality
• Standardization • Safety
• Quality differences • Shortage of Tech
workers
• Use of the Internet
• Layoffs
• Computer viruses
• Labor turnover
• Scrap rates
• Design of the workspace
• New workers • Incentive plans that
reward productivity
Improving Productivity
• Develop productivity measures
• First measure, then manipulate
• Look at System as a whole
• Identify critical operations. Bottlenecks
• Value of improvements. Effectiveness
• Develop methods for improvements
• Idea generation
• Studying other firms
• Reexamine work procedures
• Establish reasonable goals
• Incentives, rewards, encouragement from mgmt
• Measure improvements and publicize them
Bottleneck Operation
Recap
• Competencies • Productivity
• Operations + • Computing productivity,
marketing multifactor, examples
• Mission
• Factors affecting
productivity
• Strategy
• Improving productivity
• tactics
• Systems approach,
• operations strategy,
bottleneck, effectiveness
examples
• Strategy formulation