1 irwin a times mirror higher education group, inc. company, 1996 recap productivity...
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1IRWIN
a Times Mirror Higher Education Group, Inc. company, 1996
Recap
• Productivity definitionProductivity definition
• Factors effecting productivityFactors effecting productivity
• Single factor productivitySingle factor productivity
• Multifactor productivityMultifactor productivity
• Productivity MeasurementProductivity Measurement
• Productivity analysis in enterprises Productivity analysis in enterprises
• ProblemsProblems
2IRWIN
a Times Mirror Higher Education Group, Inc. company, 1996
COMPETITIVENESS and STRATEGY
Lecture
3
3IRWIN
a Times Mirror Higher Education Group, Inc. company, 1996
Lecture Outline Competitiveness Dimension of Competitiveness Important Concepts Strategy Elements of Strategy Competitive advantage OM contribution to strategy Operations Strategy
4IRWIN
a Times Mirror Higher Education Group, Inc. company, 1996
Competitiveness
Competitiveness is process by which one entity strives to outperform another.
The allocation of resources to obtain the organization's long term objectives in the most efficient and effective way.
Competitiveness depends on productivity
5IRWIN
a Times Mirror Higher Education Group, Inc. company, 1996
Dimensions of Competitiveness
Quality
Price
Time
Flexibility
Differentiation
How Organization Compete against each otherHow Organization Compete against each other
Managers
and
Workers
6IRWIN
a Times Mirror Higher Education Group, Inc. company, 1996
Indicators of Competitiveness
Productivity: Productivity is efficiency and effectiveness with which goods & services are produced & provided.
Innovation involves the creation of product, service or process that is new to an organization
• Product Innovation • Process Innovation• Incremental• Radical• Technological Innovation
7IRWIN
a Times Mirror Higher Education Group, Inc. company, 1996
New Competitiveness Paradigm
Change in competitiveness focus all over world from:
Product competitiveness to process competitiveness
From process competitiveness to structure/society competitiveness
8IRWIN
a Times Mirror Higher Education Group, Inc. company, 1996
Competitive Advantage
Types of competitive advantages a
nation's companies enjoy must shift
from comparative advantage (low
cost labor or natural resources) to
competitive advantages due to
unique products or processes.
9IRWIN
a Times Mirror Higher Education Group, Inc. company, 1996
Lack of competitiveness is leading to: reducing sales Stagnation in business Underutilization of Capacities & low productivity
..
Low Competitiveness -Drawbacks
10IRWIN
a Times Mirror Higher Education Group, Inc. company, 1996
Important Concepts
Policy-Guideline for decision making Rule-Dos and Donts Strategy-Comprehension plan to achieve
mission Procedure-Steps in chronological order to
achieve Mission
– The reason for existence for an organization– A clear statement of purpose
Vision-Where you want to see your organization in future
11IRWIN
a Times Mirror Higher Education Group, Inc. company, 1996
Elements of Strategy
Scope Goals/Objectives Resource Deployment Synergy Sustainable Competitive Advantage
12IRWIN
a Times Mirror Higher Education Group, Inc. company, 1996
Strategy, Tactics and Operations Strategy (To do)
– Plan for achieving organizational goals– Long term focus (road map)– Organizational vs. functional (Hierarchical)
Tactics (How to)– Actions and methods to accomplish
strategies – Short term focus
Operations (Doing)– Day-to-day execution
13IRWIN
a Times Mirror Higher Education Group, Inc. company, 1996
Strategy ExampleYou are a business student at COMSATS Institute of Information Technology . You 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 Business Degree from
COMSATS Tactics: Select a business field of your interest
and high market value. Operations: Register
Buy booksTake courses StudyGraduateApply & get job
14IRWIN
a Times Mirror Higher Education Group, Inc. company, 1996
Quality and Time Strategies
Quality-based strategies– Focuses on quality in all
phases of an organization
– Quality at the source
Time-based strategies– Focuses on reduction of
time needed to accomplish tasks
15IRWIN
a Times Mirror Higher Education Group, Inc. company, 1996
OM Strategic Fit for synergyOM Strategic Fit for synergy
Marketing
Strategy
Operations Strategy
Finance
Strategy
Functional Area Strategies
Organization’s Strategy
16IRWIN
a Times Mirror Higher Education Group, Inc. company, 1996
SWOT Analysis to Strategy Formulation
PowerPoint presentation to accompany Operations Management, 6E (Heizer & Render)
© 2001 by Prentice Hall, Inc., Upper Saddle River, N.J. 074582-16
Strategy
Mission
ExternalOpportunities
InternalStrengths
InternalWeaknesses
ExternalThreats
CompetitiveAdvantage
17IRWIN
a Times Mirror Higher Education Group, Inc. company, 1996
10 Strategic OM Decisions
1. Goods and service design
2. Quality 3. Process and
capacity design4. Location selection5. Layout design
6.6. Human resources Human resources and job designand job design
7.7. Supply chain Supply chain managementmanagement
8.8. InventoryInventory
9.9. SchedulingScheduling
10.10. MaintenanceMaintenance
18IRWIN
a Times Mirror Higher Education Group, Inc. company, 1996
Achieving Competitive Advantage through Operations
Differentiation – better, or at least different (uniqueness in physical characteristics or service attributes
Cost leadership – cheaper (doesn’t imply low quality)
Response – (Flexibility, Reliability, rapid response)
OM’s Contribution to Strategy
PowerPoint presentation to accompany Operations Management, 6E (Heizer & Render)
© 2001 by Prentice Hall, Inc., Upper Saddle River, N.J. 074582-19
Quality
Product
Process
Location
Layout
Human Resource
Supply Chain
Inventory
Scheduling
Maintenance
Compaq Computer’s ability to follow the PC market
Differentiation(Better)
Response(Faster)Cost leadership
(Cheaper)
Southwest Airlines No-frills service
Sony’s constant innovation of new products
Pizza Hut’s five-minute guarantee at lunchtimeFederal Express’s “absolutely, positively on time”
Motorola’s automotive products ignition systemsMotorola’s pagers
IBM’s after-sale service on mainframe computers
Fidelity Security’s broad line of mutual funds
FLEXIBILITY
DesignVolume
LOW COST
DELIVERY
SpeedDependability
QUALITY
ConformancePerformance
AFTER-SALE SERVICE
BROAD PRODUCT LINE
Operations Decisions
Examples Specific Strategy Used Competitive
Advantage
20IRWIN
a Times Mirror Higher Education Group, Inc. company, 1996
PowerPoint presentation to accompany Operations Management, 6E (Heizer & Render)
© 2001 by Prentice Hall, Inc., Upper Saddle River, N.J. 074582-20
Preconditions -To Implement a Strategy
One must understand:– Competitors and new entrants – Environmental, legal, and economic issues– The notion of product life cycle– Available resources plus distinctive
competencies– Integration of OM strategy with company
strategy and other functions
21IRWIN
a Times Mirror Higher Education Group, Inc. company, 1996
PowerPoint presentation to accompany Operations Management, 6E (Heizer & Render)
© 2001 by Prentice Hall, Inc., Upper Saddle River, N.J. 074582-21
Impetus for OM Strategy Change Changes in the organization Stages in the product life cycle Changes in the environment
22IRWIN
a Times Mirror Higher Education Group, Inc. company, 1996
PowerPoint presentation to accompany Operations Management, 6E (Heizer & Render)
© 2001 by Prentice Hall, Inc., Upper Saddle River, N.J. 074582-22
Strategy Development and Implementation
Environmental (SWOT) analysis Distinctive competencies Special attributes or abilities Give organization competitive edge Critical success factors Build and staff the organization Deployment - Integration/linkage/alignment
23IRWIN
a Times Mirror Higher Education Group, Inc. company, 1996
Operations Strategy
Functional Focus
Linkage and Alignment
24IRWIN
a Times Mirror Higher Education Group, Inc. company, 1996
Forthcoming lecture- Managing Quality