Globalization and Opm

Operations
Management
Operations Strategy in a Global
Environment
PowerPoint presentation to accompany Heizer/Render
Principles of Operations Management, 5e, and Operations
Management, 7e
2-1
2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458
Learning Objectives
When you complete this chapter, you should
be able to :
Identify or Define:
Mission
Strategy
Ten Decisions of OM
Multinational Corporations

Management, 7e
2-2
Learning Objectives - Continued

Describe or Explain:
Specific approaches used by OM to achieve
strategies
Differentiation
Low Cost
Response
Four Global Operations Strategies

Why Global Issues are Important

Management, 7e
2-3
Developing Missions and

Strategies

Management, 7e
2-4
Mission
Mission - where are you
going?
Organizations purpose for being

Provides boundaries & focus
Answers What do we provide
society?
1995 Corel Corp.

Management, 7e
2-5
Mission/Strategy
Mission - where you are going
Strategy - how you are going to get there; an
action plan

Management, 7e
2-6
Strategy
Action plan to achieve
mission
Shows how mission will be
achieved
Company has a business
strategy
Functional areas have
strategies
Management, 7e
2-7
1995 Corel Corp.
Strategy Process
Company
Mission
Business
Strategy
Functional
Functional Area
Area
Strategies
Marketing
Decisions
Management, 7e
Operations
Decisions
2-8
Fin./Acct.
Decisions
Strategies for Competitive

Advantage
Differentiation
Cost leadership
Quick response

Management, 7e
2-9
Competing on Differentiation
Uniqueness can go beyond both the physical
characteristics and service attributes to
encompass everything that impacts customers
perception of value

Management, 7e
2-10
Competing on Cost
Provide the maximum value as perceived by
customer
Does not imply low value or low quality

Management, 7e
2-11
Competing on Response
Flexibility
Reliability
Timeliness
Requires institutionalization within the firm of the
ability to respond

Management, 7e
2-12
OMs Contribution to Strategy

Operations
Decisions
Specific
Strategy Used
Examples
Quality
Product
FLEXIBILITY
Sonys constant innovation of new products

HPs ability to follow the printer market
Process
Design
Volume
Southwest Airlines No-frills service
LOW COST
Location
DELIVERY
Pizza Huts five-minute guarantee at lunchtime

Federal Expresss absolutely, positively on time
Layout
Speed
Dependability
Human Resource
Supply Chain
Inventory
Scheduling
Maintenance
Competitive
Advantage
Differentiation
(Better)
QUALITY
Motorolas automotive products ignition systems

Motorolas pagers
IBMs after-sale service on mainframe computers

Fidelity Securitys broad line of mutual funds

Management, 7e
2-13
Conformance
Performance
Cost
leadership
(Cheaper)
Response
(Faster)
AFTER-SALE SERVICE
BROAD PRODUCT LINE
Process Design
High
Customization at high
Volume
Process-focused
Job Shops
Variety of Products
(Print shop, emergency

room , machine shop,
fine dining
Mass Customization
(Dell Computers PC)
Repetitive (modular)
focus
Assembly line
(Cars, appliances, TVs,
fast-food restaurants)
Moderate
Product-focused
Continuous
(steel, beer, paper,
bread, institutional
kitchen)
Low
Low
Management, 7e
Moderate
2-14
Volume
High
Preconditions To Implement a Strategy

One must understand:
Strengths & weaknesses of competitors and new

entrants into the market
Current and prospective environmental, legal, and
economic issues
The notion of product life cycle
Resources available with the firm and within the OM
function
Integration of OM strategy with company strategy and
with other functions.
Management, 7e
2-15
Impetus for Strategy Change

Changes in the organization
Stages in the product life cycle
Changes in the environment

Management, 7e
2-16
Growth rate
Stages in the Product Life Cycle

Introduction
Growth
Maturity
Decline

Management, 7e
2-17
Strategy and Issues During a

Products Life

Management, 7e
2-18
Strategy Development and

Implementation
Identify critical success factors
Build and staff the organization

Management, 7e
2-19
SWOT Analysis Process

Environmental Analysis
Determine Corporate Mission

Form a Strategy
Management, 7e
2-20
SWOT Analysis to Strategy

Formulation
Mission
Internal
Strengths
External
Opportunities
Strategy
Internal
Weaknesses

Management, 7e
Competitive
Advantage
2-21
External
Threats
How It Works
If competitive
advantage, leads to
achieving
Company
Mission
Distinctive
competencies affect
Business
Strategy
Functional Area
Strategies
Marketing
Decisions
Management, 7e
Operations
Decisions
2-22
Fin./Acct.
Decisions
Four International Operations

Strategies

Management, 7e
2-23
Global Strategy
Operating decisions are centralized and
headquarters coordinates the standardization
and learning between facilities

Management, 7e
2-24
International Strategy
Global markets are penetrated using exports and
licenses

Management, 7e
2-25

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Operations

2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

PowerPoint presentation to accompany Heizer/Render

2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

Learning Objectives - Continued

Four Global Operations Strategies

PowerPoint presentation to accompany Heizer/Render

2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

Developing Missions and

PowerPoint presentation to accompany Heizer/Render

2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

Organizations purpose for being

1995 Corel Corp.

PowerPoint presentation to accompany Heizer/Render

2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

PowerPoint presentation to accompany Heizer/Render

2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

1995 Corel Corp.

2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

Strategies for Competitive

PowerPoint presentation to accompany Heizer/Render

2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

PowerPoint presentation to accompany Heizer/Render

2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

PowerPoint presentation to accompany Heizer/Render

2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

PowerPoint presentation to accompany Heizer/Render

2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

OMs Contribution to Strategy

Sonys constant innovation of new products

Southwest Airlines No-frills service

Pizza Huts five-minute guarantee at lunchtime

Motorolas automotive products ignition systems

IBMs after-sale service on mainframe computers

PowerPoint presentation to accompany Heizer/Render

BROAD PRODUCT LINE

2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

(Print shop, emergency

Preconditions To Implement a Strategy

Strengths & weaknesses of competitors and new

2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

Impetus for Strategy Change

PowerPoint presentation to accompany Heizer/Render

2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

Stages in the Product Life Cycle

PowerPoint presentation to accompany Heizer/Render

2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

Strategy and Issues During a

PowerPoint presentation to accompany Heizer/Render

2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

Strategy Development and

PowerPoint presentation to accompany Heizer/Render

2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

SWOT Analysis Process

Determine Corporate Mission

2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

SWOT Analysis to Strategy

PowerPoint presentation to accompany Heizer/Render

2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

Four International Operations