Ch. 2

Question 1

What is operations strategy & a business strategy?

Answer 1

Operation strat.: long-term plan for the operation functions that specifies the design & use of resources

• skills & talents
• equipment needed
• technology

Bus. Strat.: long-term plan for the business

• goal/mission (what, who, how)
• company strengths
• environmental scanning (opportunities, threats, trends, aka external environment)

Question 2

How do you develop an operations strategy?

Answer 2

A firm must focus on developing competitive priorities. (Will give the company competitive edge)

Question 3

What are the 4 categories of competitive categories

Answer 3

1. cost (offering low cost)
   - how to: cut costs, eliminate waste, automation
2. quality
   - how to: high-performance design, consistency (ex: McDonald’s, you can get the same product no matter where you are)
3. time
   - rapid delivery & on-time delivery
4. flexibility
   - product flexibility (add/drop product), volume flexibility (change volume order)

Question 4

What is order qualifiers and order winners? Why are they important?

Answer 4

Order qualifier: competitive priorities that must be met in order to enter the market place “minimum standard”

Order winner: competitive priorities that will differentiate you from competition

**To compete successfully, your firm needs to change order winners over time because they can become order qualifiers if other companies imitate you.

Question 5

The operations strategy will specify the design & use of the organization’s resources. It is broken down into two categories. What are they & explain them.

Answer 5

1. Structure:
   - related to the production process
   - selection of appropriate technology, facilities
   - flow of g&s through the facility
2. Infrastructure
   - related to planning & control sys. of operations
   - skills & pay of workers
   - quality control
   - organization of operation departments

Question 6

Name and describe the 3 primary types of technologies.

Answer 6

1. Product tech.
   - any new technology developed by a firm (CD’s, Google Glasses, Echo Dot)
2. Process tech.
   - use to improve the process of creating g&s (3D printing, machinery)
3. Information tech.
   - enables communication, processing & storing info (ERP, e-commerce)

Question 7

How does a company measure its competitiveness?

Answer 7

PRODUCTIVITY

Question 8

Define productivity & how you measure it.

Answer 8

Productivity measures how well resources are used (inputs)

Productivity= output/input

Question 9

How do you measure total productivity, partial & multi factor?

Answer 9

Total productivity: output produced/all inputs used

Partial: output/labour or output/capital

Multifactor: output/labour + materials

Question 10

Why is it important to measure productivity?

Answer 10

Productivity measure provides information on how we are doing relative to the competitive priority that is the most important to the company.

Question 11

Name four emerging competitive priorities.

Answer 11

1. Variety
2. Response time
3. Customer service
4. Innovation