To Accompany Russell and Taylor, Operations Management, 4th Edition, 2003 Prentice-Hall, Inc. All rights re Chapter 2 Chapter 2 Operations Operations Strategy Strategy To Accompany Russell and Taylor, Operations Management, 4th Edition, 2003 Prentice-Hall, Inc. All rights re
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To Accompany Russell and Taylor, Operations Management, 4th Edition, 2003 Prentice-Hall, Inc. All rights reserved.
Chapter 2Chapter 2
Operations Operations StrategyStrategy
To Accompany Russell and Taylor, Operations Management, 4th Edition, 2003 Prentice-Hall, Inc. All rights reserved.
To Accompany Russell and Taylor, Operations Management, 4th Edition, 2003 Prentice-Hall, Inc. All rights reserved.
Strategic PlanningStrategic PlanningMission and
Vision
Corporate Strategy
Voice of the Business
Voice of the Customer
Marketing Strategy
Operations Strategy
Financial Strategy
Figure 2.5Figure 2.5
To Accompany Russell and Taylor, Operations Management, 4th Edition, 2003 Prentice-Hall, Inc. All rights reserved.
Operations Role in Operations Role in Corporate StrategyCorporate Strategy
Provide support for overall Provide support for overall strategy of a firmstrategy of a firm
Serve as firm’s distinctive Serve as firm’s distinctive competencecompetence
Must be consistentMust be consistentMust be consistent with overall Must be consistent with overall
strategystrategy
To Accompany Russell and Taylor, Operations Management, 4th Edition, 2003 Prentice-Hall, Inc. All rights reserved.
Strategy FormulationStrategy Formulation
1.1. Define a primary taskDefine a primary task2.2. Assess core Assess core
competenciescompetencies3.3. Determine order Determine order
winners & order qualifierswinners & order qualifiers4.4. Positioning the firmPositioning the firm
To Accompany Russell and Taylor, Operations Management, 4th Edition, 2003 Prentice-Hall, Inc. All rights reserved.
Competing on CostCompeting on CostEliminate all wasteEliminate all wasteInvest inInvest in
Updated facilities & equipmentUpdated facilities & equipment Streamlining operationsStreamlining operations Training & developmentTraining & development
To Accompany Russell and Taylor, Operations Management, 4th Edition, 2003 Prentice-Hall, Inc. All rights reserved.
Competing on QualityCompeting on Quality
Please the customerPlease the customerUnderstand customer Understand customer
attitudes toward and attitudes toward and expectations of expectations of quality quality
To Accompany Russell and Taylor, Operations Management, 4th Edition, 2003 Prentice-Hall, Inc. All rights reserved.
Competing on Competing on FlexibilityFlexibility
Produce wide variety of Produce wide variety of productsproducts
Introduce new productsIntroduce new productsModify existing Modify existing
products quicklyproducts quicklyRespond to customer Respond to customer
needsneeds
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Competing on SpeedCompeting on Speed
Fast movesFast movesFast adaptationsFast adaptationsTight linkagesTight linkages
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Strategic Decisions in Strategic Decisions in OperationsOperations
Products Processes and
Technology
Capacity
Human Resources Quality
Facilities Sourcing
Services
Operating Systems
Figure 2.2Figure 2.2
To Accompany Russell and Taylor, Operations Management, 4th Edition, 2003 Prentice-Hall, Inc. All rights reserved.
OperationsOperationsStrategy at Strategy at Wal-MartWal-Mart Provide value for our customersProvide value for our customers
To Accompany Russell and Taylor, Operations Management, 4th Edition, 2003 Prentice-Hall, Inc. All rights reserved.
Service-Process MatrixService-Process MatrixL
abo
r In
ten
sity
Lab
or
Inte
nsi
ty
HighHigh
HighHigh LowLow
LowLow
Professional Service
Service Shop
MassService
Service Factory
CustomizationCustomizationFigure 2.4Figure 2.4
To Accompany Russell and Taylor, Operations Management, 4th Edition, 2003 Prentice-Hall, Inc. All rights reserved.
Capacity & FacilitiesCapacity & FacilitiesHow much capacity to provideHow much capacity to provideSize of capacity changesSize of capacity changesHandling excess demandHandling excess demandHiring/firing Hiring/firing
workersworkersNeed for new Need for new
facilitiesfacilities
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Capacity Expansion StrategiesCapacity Expansion Strategies(a) Capacity lead strategy(a) Capacity lead strategy (b) Capacity lag strategy(b) Capacity lag strategy
(c) Average capacity strategy(c) Average capacity strategy (d) Incremental vs. one-step expansion(d) Incremental vs. one-step expansion
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FacilitiesFacilities
Best size for facility?Best size for facility?Large or small facilitiesLarge or small facilitiesFacility focusFacility focusFacility locationFacility locationGlobal facilityGlobal facility
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Human ResourcesHuman Resources Skill levels requiredSkill levels required Degree of autonomyDegree of autonomy PoliciesPolicies Profit sharingProfit sharing Individual or team Individual or team
workwork Supervision methodsSupervision methods Levels of Levels of
managementmanagement TrainingTraining
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