Lecture 1 - Introduction

Question 1

Define Operations Management

Answer 1

Decisions regarding how to transform input into outputs.

Question 2

Define Operations

Answer 2

A set of activities that create value in the form of output.

Question 3

Which are the three levels of decisionmaking?

Answer 3

1. Strategic (Long-term)
2. Tactical (Mid-term)
3. Operational (Short-term)

Question 4

Which of the three levels of decision making is the most important?

Answer 4

The operational has the biggest impact since it is repeated daily and thus the effect compounds.

Question 5

Name four strategic decisions related to operations

Answer 5

1. Process Strategy
2. Disruptive Innovations (Innovation strategy?)
3. Inventory Planning
4. Supply Chain Management

Question 6

Which are the three essential functions in an organization?

Answer 6

1. Operations
2. Marketing
3. Finance & accounting

Question 7

Why is operations management important?

Answer 7

1. Directly deals with output
2. Companies are under a resource constraint
3. Operations is a costly part of organizations (Logistics and inventory control costs approx >30%)
4. New challenges appears as the efficient frontier of technology increases (AI etc)

Question 8

Name three strategies for obtaining competitive advantage:

Answer 8

1. Cost Leadership (operations essential)
2. Responsiveness
3. Differentiation

Question 9

What are the three levels of strategy?

Answer 9

Corporate: The choice of business area to compete in.
Business: How to obtain competitive advantage.
Functional: Operations, Accounting etc

Question 10

Where can frictions in functional strategies appear?

Answer 10

When marketing pursues promotion which increases demand to a level that production cannot adhere to (operations).

When the business strategy is a more sustainable brand, but the operations are focusing on being a cost leader.

Question 11

Where do strategic mobility barriers come from?

Answer 11

According to Porter:

1. Feature incompatibility
2. Activity incompatibility
3. Image/brand incompatibility

Question 12

What are the four things companies most frequently compete over?

Answer 12

1. Quality
2. Cost
3. Delivery
4. Flexibility

(tradeoff therein)

Question 13

What is a trade-off from an operational perspective?

Answer 13

That companies have to weigh and choose between competing competitive priorities.

Question 14

Define Operations strategy:

Answer 14

the decision pattern that shapes the long-term capabilities of the organization.

Question 15

Name three essential parts of operations strategy:

Answer 15

1. Alignment within the strategy hierarchy
2. Meeting demand (market requirement)
3. Effective allocation of resources

Question 16

Hill’s approach to Operations Strategy Design:

Answer 16

1. Definition of corporate objectives:
   (Growth, survival, profit)
2. Marketing strategies:
   (Target segment, volume, standard vs. customized, leader or follower)
3. Product assessment vs competitors (benchmark):
   (Price, Quality, Variety)
4. The most appropriate way to deliver:
   (Process design, Supply Chain design, Channel design, Inventory planning)
5. Create infrastructure to support operations:
   (Workforce, Maintenance, Layout, Support Service)