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    Mcgraw-Hill/Irwin © 2006 The Mcgraw-Hill Companies, Inc., All Rights Reserved

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    DINO DIZON

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    © All Rights Reserved
    Download as PPT, PDF, TXT or read online from Scribd

    Mcgraw-Hill/Irwin © 2006 The Mcgraw-Hill Companies, Inc., All Rights Reserved

    Uploaded by

    DINO DIZON
    20 views17 pages

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    Copyright:

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    20 views17 pages

    Mcgraw-Hill/Irwin © 2006 The Mcgraw-Hill Companies, Inc., All Rights Reserved

    Uploaded by

    DINO DIZON

    Copyright:

    © All Rights Reserved
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    of 17

    1

    McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc., All Rights Reserved.


    2

    Chapter 2
    Operations Strategy and
    Competitiveness

    McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc., All Rights Reserved.


    3

    OBJECTIVES
     Operations Strategy
     Competitive Dimensions
     Order Qualifiers and Winners
     Strategy Design Process
     A Framework for Manufacturing Strategy
     Service Strategy Capacity Capabilities
     Productivity Measures

    McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc., All Rights Reserved.


    4

    Operations Strategy
    Strategy Process Example

    Customer Needs More Product

    Corporate Strategy Increase Org. Size

    Operations Strategy Increase Production Capacity

    Decisions on Processes
    and Infrastructure Build New Factory

    McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc., All Rights Reserved.


    5

    Competitive Dimensions
     Cost or Price
    – Make the Product or Deliver the Service Cheap
     Quality
    – Make a Great Product or Deliver a Great Service
     Delivery Speed
    – Make the Product or Deliver the Service Quickly
     Delivery Reliability
    – Deliver It When Promised
     Coping with Changes in Demand
    – Change Its Volume
     Flexibility and New Product Introduction Speed
    – Change It
     Other Product-Specific Criteria
    – Support It

    McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc., All Rights Reserved.


    6

    Dealing with Trade-offs


    For example, if we reduce costs by reducing product
    quality inspections, we might reduce product quality.

    For example, if we
    improve customer Cost
    service problem solving
    by cross-training Flexibility Delivery
    personnel to deal with a
    wider-range of
    Quality
    problems, they may
    become less efficient at
    dealing with commonly
    occurring problems.

    McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc., All Rights Reserved.


    7

    Order Qualifiers and Winners


    Defined
    Order qualifiers are the basic
    criteria that permit the firms
    products to be considered as
    candidates for purchase by
    customers

    Order winners are the criteria that


    differentiates the products and
    services of one firm from another

    McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc., All Rights Reserved.


    8

    Service Breakthroughs
     A brand name
    car can be an
    “order qualifier”

    Repair services can be “order


    winners”
    Examples: Warranty, Roadside Assistance,
    Leases, etc

    McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc., All Rights Reserved.


    9

    Strategy Design Process


    Strategy Map What it is about!
    Financial Perspective Improve Shareholder Value

    Customer Perspective Customer Value Proposition

    Internal Perspective Build-Increase-Achieve

    Learning and Growth Perspective A Motivated and Prepared


    Workforce

    McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc., All Rights Reserved.


    10

    Kaplan and Norton’s Generic


    Strategy Map
    In the Kaplan and Norton’s Generic Strategy
    Map, under the Financial Perspective, the
    Productivity Strategy is generally made up from
    two components:

    1. Improve cost structure: Lower direct and


    indirect costs
    2. Increase asset utilization: Reduce working
    and fixed capital

    McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc., All Rights Reserved.


    11

    Kaplan and Norton’s Generic


    Strategy Map (Continued)
    In the Kaplan and Norton’s Generic Strategy
    Map, under the Financial Perspective, the
    Revenue Growth Strategy is generally made
    up from two components:
    1. Build the franchise: Develop new sources of
    revenue
    2. Increase customer value: Work with
    existing customers to expand relationships
    with company

    McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc., All Rights Reserved.


    12

    Kaplan and Norton’s Generic


    Strategy Map (Continued)
    In the Kaplan and Norton’s Generic Strategy
    Map, under the Customer Perspective, there
    are three ways suggested as means of
    differentiating a company from others in a
    marketplace:

    1. Product leadership
    2. Customer intimacy
    3. Operational excellence

    McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc., All Rights Reserved.


    13

    Kaplan and Norton’s Generic


    Strategy Map (Continued)
    In the Kaplan and Norton’s Generic Strategy
    Map, under the Learning and Growth
    Perspective, there are three principle
    categories of intangible assets needed for
    learning:

    1. Strategic competencies
    2. Strategic technologies
    3. Climate for action

    McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc., All Rights Reserved.


    14
    Operations Strategy Framework
    Customer Needs

    New product : Old product

    Competitive
    dimensions & requirements

    Quality, Dependability, Speed, Flexibility, and Price

    Enterprise capabilities
    Operations
    Operationsand Suppliercapabilities
    & Supplier Capabilities
    R&DR&D Technology SystemsSystems
    Technology People
    People Distribution
    Distribution

    Support Platforms
    Financial management Human resource management Information management

    McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc., All Rights Reserved.


    15

    Steps in Developing a
    Manufacturing Strategy

     1. Segment the market according to the


    product group
     2. Identify product requirements, demand
    patterns, and profit margins of each group
     3. Determine order qualifiers and winners for
    each group
     4. Convert order winners into specific
    performance requirements

    McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc., All Rights Reserved.


    16

    Service Strategy Capacity


    Capabilities
     Process-based
    – Capacities that transforms material or information
    and provide advantages on dimensions of cost and
    quality
     Systems-based
    – Capacities that are broad-based involving the entire
    operating system and provide advantages of short
    lead times and customize on demand
     Organization-based
    – Capacities that are difficult to replicate and provide
    abilities to master new technologies

    McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc., All Rights Reserved.


    17

    What is Productivity?
    Defined
    Productivity is a common measure
    on how well resources are being
    used. In the broadest sense, it can
    be defined as the following ratio:
    Outputs
    Inputs

    McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc., All Rights Reserved.

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