Ch 2 book: competitiveness, strategic planning, and productivity Flashcards
Competitiveness
the ability and performance of an organization in the market compared to other organizations that offer similar goods or services
Strategy
the long-term plans that determine the direction an organization takes to become (or remain) competitive
Strategic planning
the managerial process that determines a strategy for the organization
implements it through allocation of resources and action plans
mission, vision, and values can be very important for this in some organizations
productivity
a measure of productive use of resources
key purchasing criteria
The major factors influencing a purchase:
price
quality
variety
timeliness
In complex purchases, customers may use which two categories of purchasing criteria?
order qualifiers
order winners
order qualifiers
the purchasing criteria that customers perceive as minimum standards of acceptability for purchase
order winners
the purchasing criteria that cause the selling organization to be perceived as better than the competition
competitive priorities
The importance given to operations
characteristics:
cost
quality
flexibility
delivery
cost
the unit production cost of a good or a service to the organization
quality from an organization’s perspective
determining customers’ quality requirements
translating these into specifications for goods or services
consistently producing goods or services to these specifications
flexibility from an organization’s perspective
being able to produce a variety of goods or services
also includes customization
Delivery reliability and speed from an organization’s perspective
being able to consistently and promptly meet promised due dates by producing/delivering goods or services on time and quickly
quantity flexibility
the ability to increase or decrease the production quantity of goods or services
Strategic planning process
- starts with top management soliciting the performance of current strategy from stakeholders
- commissioning a market research study of the industry and where it is headed in the next five years or so
- the management team may form/adjust the organization’s mission and vision, determine a set of goals and objectives, and brainstorm and evaluate alternative ways (strategies) to achieve them
- the chosen strategy is implemented by determining a set of action plans at the department level
mission
where the organization is going now
its products
its markets
goals and objectives
Vision
where the organization desires to be in the future
Values
the shared beliefs of the organization’s stakeholders
should drive everything else such as culture, mission/vision, and strategy
Tactics
medium-term plans used as components of a strategy
more specific in nature than a strategy
they provide guidance for determining policies and carrying out an action plan
action plan
a medium- or short-term project to accomplish a specific objective
contains a deadline and the resources needed
assigned to an individual or a team
the hierarchy of strategic planning
is from top to bottom
Mission/Vision
Organizational strategy
functional strategies
tactics
policies and action plans
The difficulty of implementing a strategy depends on what?
its scale (size)
complexity (the parts of the organization it affects)
uncertainty (how novel it is)
Operations strategy
a set of well coordinated policies, objectives, and action plans
directly affects the operations function
this is aimed at securing along-term sustainable advantage over the competition
operations’ objectives/performance measures are usually determined in which terms of competitive priorities? what must be made among these priorities? why?
cost
quality
delivery
flexibility
trade-offs must be made
because operations cannot excel in all of them simultaneously
The operations policies, objectives, and action plans can be classified into which nine strategic decision categories?
Facility
Cαpαcity
vertical integration/outsourcing
Supplier relationship/partnership
Product mix and new products
Production process types and technology
Humαn resources
Quality
Operations infrαstructure and systems
facility decision category
The number and location of facilities
how to specialize or focus each facility
capacity decision category
related to the facility decision
size of plants and m勾or equipment
The main issue is whether and how to change the capacity in anticipation of future demand
vertical integration or outsourcing decision category
Cost, coordination, and control are the important decision factors
Supplier relationship and pαrtnership decision category
determines how the quality of purchased goods will be assured
Product mix and new products decision category
can be used to relate product characteristics to production process characteristics
matrix shows the important trade-offs required in production process choice
determines the appropriate technologies and degree of automation
Humαn resources decision category
responsible for hiring good employees
helps in training good employees
helps in motivating employees
helps in promoting employees
helps in rewarding employees
Quality decision category
determines quality of product
decision is made during the design and production stages
Operations infrαstructure and systems decision category
These decisions include planning and control
we need a software program for both
Formulation of an Operations Strategy (basically the steps)
- Link the organizational goals to the operations strategy
- Categorize/segment the customers into types
- Group product lines into types
- Conduct an operations audit to determine the strengths/weaknesses of the current operations strategy in each of the nine strategic decision categories
- For a multi-plant corporation, assess the degree of focus at each plant
- Develop an operations strategy and reallocate product lines to plants if necessary
Generic operations strategies
theme-based operations improvement programs and plans
ex: JIT or total quality management
frequently used irrespective of the market conditions and competitive situation
Generic operations strategies
theme-based operations improvement programs and plans
ex: JIT or total quality management
frequently used irrespective of the market conditions and competitive situation
why are generic operations strategies not considered strategies?
because, if every company in an industry uses the same generic strategy, every company becomes more efficient and/or more effective without gaining competitive advantage
business process re-engineering (BPR)
Another generic strategy
a radical process redesign
involves:
process reorientation
breaking up functional silos
integrating operations into customer-focused processes
enterprise resource planning (ERP)
automates business processes
can reduce cost and data entry errors
requires data to be entered in a central database as soon as a transaction occurs anywhere in the organization
quality-based strategy
focuses on improving the quality of an organization’s goods or services
quality-based strategy
focuses on improving the quality of an organization’s goods or services
time-based strategy
focuses on reducing the time required to accomplish various activities
organizations seek to gain a competitive advantage over rivals that take more time to accomplish the same tasks
productiνity
measures output per unit input
output/input
rate of productiνity growth
(Current period productivity - Previous period productivity) / Previous period productivity
how can productivity be measured?
single input (pαrtial productivity)
more than one input (multi-factor productivity)
on all inputs (total productivity)
The unit of output used in a productivity measure depends on what?
the type of job performed
how are labour productivity and average operation time for a task related? why?
inversely related
because the more productive your labor inputs are, the less time it should take to produce the same output
how are labour productivity and average operation time for a task related? why?
inversely related
because the more productive your labor inputs are, the less time it should take to produce the same output
the more time it takes to produce, the less output you will have
how are total productivity and profit of a company related? why?
the higher your productivity, the higher your profits
aggregate measures of productivity
to measure the performance of an entire industry or a country as a whole
why is it more difficult to measure output in service companies?
because output is intangible
are workers the main determinant of productivity? why
nah bruv
equipment and technological improvements
