1、Copyright 2006 John Wiley & Sons, Inc.,Beni AsllaniUniversity of Tennessee at Chattanooga,Operations and Competitiveness,Operations Management - 5th Edition,Chapter 1,Roberta Russell & Bernard W. Taylor, III,Copyright 2006 John Wiley & Sons, Inc.,Beni AsllaniUniversity of Tennessee at Chattanooga,Op
2、erations Strategy,Operations Management - 5th Edition,Chapter 2,Roberta Russell & Bernard W. Taylor, III,Copyright 2006 John Wiley & Sons, Inc.,2-3,Lecture Outline,Strategy FormulationCompetitive PrioritiesOperations Role in Corporate StrategyStrategy and the InternetStrategic Decisions in Operation
3、sStrategy DeploymentIssues and Trends in Operations,Copyright 2006 John Wiley & Sons, Inc.,2-4,Four Steps for Strategy Formulation,Defining a primary taskWhat is the firm in the business of doing?Assessing core competenciesWhat does the firm do better than anyone else?Determining order winners and o
4、rder qualifiersWhat wins the order? What qualifies an item to be considered for purchase?Positioning the firmHow will the firm compete?,Copyright 2006 John Wiley & Sons, Inc.,2-5,Competitive Priorities,CostQualityFlexibilitySpeed,Copyright 2006 John Wiley & Sons, Inc.,2-6,Competitive Priorities: Cos
5、t,Lincoln Electricreduced costs by $10 million a year for 10 yearsskilled machine operators save the company millions that would have been spent on automated equipmentSouthwest Airlinesone type of airplane facilitates crew changes, record-keeping, maintenance, and inventory costsdirect flights mean
6、no baggage transfers$30 million annual savings in travel agent commissions by requiring customers to contact the airline directly,Copyright 2006 John Wiley & Sons, Inc.,2-7,Competitive Priorities: Quality,Ritz-Carlton - one customer at a timeEvery employee is empowered to satisfy a guests wish Teams
7、 at all levels set objectives and devise quality action plansEach hotel has a quality leader Quality reports tracksguest room preventive maintenance cyclespercentage of check-ins with no waitingtime spent to achieve industry-best clean room appearanceGuest Preference Reports are recorded in a databa
8、se,Copyright 2006 John Wiley & Sons, Inc.,2-8,Competitive Priorities: Flexibility,Andersen Windowsnumber of products offered grew from 28,000 to 86,000number of errors are down to 1 per 200 truckloadsCustom Foot Shoe Store:customers feet are scanned electronically to capture measurementscustom shoes
9、 are mailed to the customers home in weeksprices are comparable to off-the-shelf shoesNational Bicycle Industrial Companyoffers 11,231,862 variationsdelivers within two weeks at costs only 10% above standard models,Copyright 2006 John Wiley & Sons, Inc.,2-9,Competitive Priorities: Speed,Citicorp adv
10、ertises a 15-minute mortgage approvalL.L. Bean ships orders the day they are receivedWal-Mart replenishes its stock twice a week Hewlett-Packard produces electronic testing equipment in five daysGeneral Electric reduces time to manufacture circuit-breaker boxes into three days and dishwashers into 1
11、8 hoursDellships custom-built computers in two daysMotorola needs less than 30 minutes to build to order pagers,Copyright 2006 John Wiley & Sons, Inc.,2-10,Operations Role in Corporate Strategy,Operations provides support for a differentiated strategyOperations serves as a firms distinctive competen
12、ce in executing similar strategies better than competitors,Copyright 2006 John Wiley & Sons, Inc.,2-11,Operations Strategy at Wal-Mart,Copyright 2006 John Wiley & Sons, Inc.,2-12,Strategy and the Internet,Internet can be used to create a distinctive business strategyeBayunlimited capacity and a huge
13、 marketall work is done by buyers and sellers and there is no marginal costCiscointegrated value chain is its competitive advantage,Copyright 2006 John Wiley & Sons, Inc.,2-13,Strategy and the Internet (cont.),Internet can be used to strengthen existing competitive advantages by integrating new and
14、traditional activitiesGEs Trading Process Network: an automated Web-based purchasing systemcut average purchasing cost in halfenabled a much larger group of suppliers to bid on jobscustomers were able to track their orders through shop in real timeIntel sells $2 billion a month over the Internetpurc
15、hases 80% of its direct materials onlinereplaced 19,000 sales-order faxes received daily,Copyright 2006 John Wiley & Sons, Inc.,2-14,Strategy and the Internet (cont.),Lessons from the dot com shakedownInternet is the great equalizerallows innovations to be copied with little investmentcompanies may
16、reach larger marketcustomers have more information and can compare prices and features of their products.These benefits are temporary unlessCompanies provide unique value to customer,Copyright 2006 John Wiley & Sons, Inc.,2-15,Strategic Decisions in Operations,Products,Services,ProcessandTechnology,
17、Capacity,HumanResources,Quality,Facilities,Sourcing,OperatingSystems,Copyright 2006 John Wiley & Sons, Inc.,2-16,Operations Strategy: Products and Services,Make-to-Orderproducts and services are made to customer specifications after an order has been receivedMake-to-Stockproducts and services are ma
18、de in anticipation of demandAssemble-to-Orderproducts and services add options according to customer specifications,Copyright 2006 John Wiley & Sons, Inc.,2-17,Production Strategy:Processes and technology,Projectone-at-a-time production of a product to customer orderBatch Productionsystems process m
19、any different jobs at the same time in groups (or batches)Mass Productionlarge volumes of a standard product for a mass marketContinuous Productionused for very high volume commodity products,Copyright 2006 John Wiley & Sons, Inc.,2-18,Product-Process Matrix,Source: Adapted from Robert Hayes and Ste
20、ven Wheelwright, Restoring the Competitive Edge: Competing Through Manufacturing (New York: John Wiley & Sons, 1984), p. 209,Copyright 2006 John Wiley & Sons, Inc.,2-19,ProjectConstruction of the aircraft carrier USS Nimitz was a huge project that took almost 10 years to complete.,Batch ProductionAt
21、 Martin Guitars bindings on the guitar frame are installed by hand and are wrapped with a cloth webbing until glue is dried.,Mass Production Here in a clean room a worker performs quality checks on a computer assembly line.,Continuous ProductionA paper manufacturer produces a continuous sheet paper
22、from wood pulp slurry, which is mixed, pressed, dried, and wound onto reels.,Copyright 2006 John Wiley & Sons, Inc.,2-20,Service Strategy:Processes and Technology,Professional Servicehighly customized and very labor intensiveService Shopcustomized and labor intensiveMass Serviceless customized and l
23、ess labor intensiveService Factoryleast customized and least labor intensive,Copyright 2006 John Wiley & Sons, Inc.,2-21,Service-Process Matrix,Source: Adapted from Roger Schmenner, “How Can Service Businesses Survive and Prosper?” Sloan Management Review 27(3):29,Copyright 2006 John Wiley & Sons, I
24、nc.,2-22,Professional ServiceA doctor provides personal service to each patient based on extensive training in medicine.,Service ShopAlthough a lecture may be prepared in advance, its delivery is affected by students in each class.,Mass ServiceA retail store provides a standard array of products fro
25、m which customers may choose.,Service FactoryElectricity is a commodity available continuously to customers.,Copyright 2006 John Wiley & Sons, Inc.,2-23,Operations Strategy:Capacity and Facility,Capacity strategic decisions include: When, how much, and in what form to alter capacityFacility strategi
26、c decisions include: Whether demand should be met with a few large facilities or with several smaller onesWhether facilities should focus on serving certain geographic regions, product lines, or customersFacility location can also be a strategic decision,Copyright 2006 John Wiley & Sons, Inc.,2-24,O
27、perations Strategy: Human Resources,What are the skill levels and degree of autonomy required to operate production system?What are the training requirements and selection criteria?What are the policies on performance evaluations, compensation, and incentives?Will workers be salaried, paid an hourly
28、 rate, or paid a piece rate?Will profit sharing be allowed, and if so, on what criteria?,Copyright 2006 John Wiley & Sons, Inc.,2-25,Operations Strategy: Human Resources (cont.),Will workers perform individual tasks or work in teams?Will they have supervisors or work in self-managed work groups?How
29、many levels of management will be required?Will extensive worker training be necessary?Should workforce be cross-trained?What efforts will be made in terms of retention?,Copyright 2006 John Wiley & Sons, Inc.,2-26,Operations Strategy: Quality,What is the target level of quality for our products and
30、services?How will it be measured? How will employees be involved with quality?What will the responsibilities of the quality department be?,Copyright 2006 John Wiley & Sons, Inc.,2-27,Operations Strategy: Quality (cont.),What types of systems will be set up to ensure quality? How will quality awarene
31、ss be maintained?How will quality efforts be evaluated?How will customer perceptions of quality be determined? How will decisions in other functional areas affect quality?,Copyright 2006 John Wiley & Sons, Inc.,2-28,Operations Strategy: Sourcing,Vertical Integrationdegree to which a firm produces pa
32、rts that go into its productsStrategic DecisionsHow much work should be done outside the firm? On what basis should particular items be made in-house?When should items be outsourced?How should suppliers be selected?,Copyright 2006 John Wiley & Sons, Inc.,2-29,Operations Strategy: Sourcing (cont.),Wh
33、at type of relationship should be maintained with suppliers?What is expected from suppliers?How many suppliers should be used?How can quality and dependability of suppliers be ensured?How can suppliers be encouraged to collaborate?,Copyright 2006 John Wiley & Sons, Inc.,2-30,Operations Strategy: Ope
34、rating Systems,How will operating systems execute strategic decisions?How does one align information technology and operations strategic goals?How does information technology support both customer and worker demands for rapid access, storage, and retrieval of information?How does information technol
35、ogy support decisions making process related to inventory levels, scheduling priorities, and reward systems?,Copyright 2006 John Wiley & Sons, Inc.,2-31,Strategic Planning,Missionand Vision,CorporateStrategy,OperationsStrategy,MarketingStrategy,FinancialStrategy,Copyright 2006 John Wiley & Sons, Inc
36、.,2-32,Policy Deployment,Translating corporate strategy into measurable objectives,Copyright 2006 John Wiley & Sons, Inc.,2-33,Key Performance Indicators,Source: Robert Kaplan and DavidNorton, Strategy Maps:Converting IntangibleAssets into TangibleOutcomes (Boston:Harvard Business SchoolPress, 2004)
37、, Figure 3-2,p. 67,Copyright 2006 John Wiley & Sons, Inc.,2-34,Balanced Scorecard,Radar Chart,Dashboard,Copyright 2006 John Wiley & Sons, Inc.,2-35,Issues and Trends in Operations,Global Markets, Global Sourcing, and Global OperationsVirtual CompaniesGreater Choice, More IndividualismEmphasis on Ser
38、viceSpeed and Flexibility,Copyright 2006 John Wiley & Sons, Inc.,2-36,Issues and Trends in Operations (cont.),Supply ChainsCollaborative CommerceTechnological AdvancesKnowledge and Ability to LearnEnvironmental and Social Responsibilities,Copyright 2006 John Wiley & Sons, Inc.,2-37,Characteristic,20
39、th-CenturyCorporation,21st-CenturyCorporation,Changing Corporation,OrganizationFocusStyleSource of strengthStructureResources,PyramidInternalStructuresStabilitySelf-sufficiencyPhysical assets,WebExternalFlexibleChangeInterdependenciesInformation,Source: Reprinted from John Byrne, “Management by Web,
40、” Business Week (August 28, 2000), p. 87 by special permission, copyright 2000 by The McGraw-Hill Companies, Inc.,Copyright 2006 John Wiley & Sons, Inc.,2-38,Characteristic,20th-CenturyCorporation,21st-CenturyCorporation,Changing Corporation (cont.),OperationsProductsReachFinancialsInventoriesStrate
41、gy,Vertical integrationMass productionDomesticQuarterlyMonthsTop-down,Virtual integrationMass customizationGlobalReal-timeHoursBottom-up,Source: Reprinted from John Byrne, “Management by Web,” Business Week (August 28, 2000), p. 87 by special permission, copyright 2000 by The McGraw-Hill Companies,
42、Inc.,Copyright 2006 John Wiley & Sons, Inc.,2-39,Characteristic,20th-CenturyCorporation,21st-CenturyCorporation,Changing Corporation (cont.),LeadershipWorkersJob expectationsMotivationImprovementsQuality,InspirationalEmployees, free agentsPersonal growthTo buildRevolutionaryNo compromise,Source: Rep
43、rinted from John Byrne, “Management by Web,” Business Week (August 28, 2000), p. 87 by special permission, copyright 2000 by The McGraw-Hill Companies, Inc.,DogmaticEmployeesSecurityTo competeIncrementalAffordable best,Copyright 2006 John Wiley & Sons, Inc.,2-40,Copyright 2006 John Wiley & Sons, Inc
44、.All rights reserved. Reproduction or translation of this work beyond that permitted in section 117 of the 1976 United States Copyright Act without express permission of the copyright owner is unlawful. Request for further information should be addressed to the Permission Department, John Wiley & So
45、ns, Inc. The purchaser may make back-up copies for his/her own use only and not for distribution or resale. The Publisher assumes no responsibility for errors, omissions, or damages caused by the use of these programs or from the use of the information herein.,Copyright 2006 John Wiley & Sons, Inc.,
46、Beni AsllaniUniversity of Tennessee at Chattanooga,Operations Management - 5th Edition,Chapter 3,Roberta Russell & Bernard W. Taylor, III,Quality Management,Copyright 2006 John Wiley & Sons, Inc.,3-42,Lecture Outline,Meaning of QualityTotal Quality ManagementQuality Improvement and Role of Employees
47、Strategic Implications of TQMSix Sigma,Copyright 2006 John Wiley & Sons, Inc.,3-43,Lecture Outline (cont.),TQM in Service CompaniesCost of QualityQuality Management and ProductivityIdentifying Quality Problems and CausesQuality Awards and Setting Quality StandardsISO 9000,Copyright 2006 John Wiley &
48、 Sons, Inc.,3-44,Meaning of Quality,Websters Dictionarydegree of excellence of a thingAmerican Society for Qualitytotality of features and characteristics that satisfy needsConsumers and Producers Perspective,Copyright 2006 John Wiley & Sons, Inc.,3-45,Meaning of Quality:Consumers Perspective,Fitnes
49、s for usehow well product or service does what it is supposed toQuality of designdesigning quality characteristics into a product or serviceA Mercedes and a Ford are equally “fit for use,” but with different design dimensions,Copyright 2006 John Wiley & Sons, Inc.,3-46,Dimensions of Quality:Manufact
50、ured Products,Performance basic operating characteristics of a product; how well a car is handled or its gas mileageFeatures “extra” items added to basic features, such as a stereo CD or a leather interior in a carReliabilityprobability that a product will operate properly within an expected time frame; that is, a TV will work without repair for about seven years,
