Mission and Vision?Vision: reason for existence, long-
termMission: how to accomplish the
VisionTo provide society with superior products and services--innovations and solutions that improve the quality of life and satisfy customer needs--to provide employees with meaningful work and advancement opportunities and investors with a superior rate of return.
(Merck mission statement)
Values & EthicsHow we’re going to behave
Behaviors, Ethics – What about suppliers?Shapes decision making
Mission Statement“Without a clear mission, an
organization is unlikely to achieve its true potential, because there is little direction for formulating strategies.”
Wouldn’t the same be true about people?
My Favorite GuruWhen you think of
something, put it on a list.
Check your lists regularly.
Don’t get sucked into email distractions.
Get rid of the clutter you don’t need.
Impact of OperationsEnterprise Resource Planning systemsData Mining – data warehousesData Analytics – ongoing search for
improvementE-Commerce – flawless executionGlobalization – suppliers everywhere
What about subcontractors?Sustainability – there’s gold in them thar hills
What is strategy?A Plan for achieving the MissionCore Competencies
Company’s distinct abilitiesSource of competitive advantageSkills that differentiate the firm from its
competitorsWhat you could never dare trust to anyone else
Soft drinks: the secret sauceAutomobiles: designing engines
Competitiveness:A firm’s relative position in comparison to other
firms in the marketplace
StrategyStrategy: a plan for achieving the mission
Each functional area (accounting, finance, marketing) determines its “supporting mission”
Tactics: the methods to be used to achieve the strategic goals.Must support mission, corporate values
Michael PorterThree ways to achieve corporate mission:1. Differentiation: Make your product different
and / or better2. Cost Leadership (lower prices): Wal- Mart,
Southwest Airlines3. Quick Response: Pizza Hut, FedEx
Competitive DimensionsCost – make it cheapQuality and Reliability – make it goodSpeed – make it fastReliability – deliver when promisedResponsive – exactly what the customer
wantsCope with Change – change volumeNew product speedCustomer supportQuality – much harder to assess than speed
or cost
CompetitivenessOrder qualifiers: screening criterion that
allows your products to be considereddeliver on-time, reliability, general quality
Order Winners: criterion that differentiates your service/product above the competitionprice, quality, reliability“nice to haves” become “must haves” over time
How will you beat the competition?
Responsiveness – Supply Chain designPrice / Quality / Speed?Decoupling Point
Make to Stock – ready on the shelf – Breyer’sAssemble to Order – parts waiting for an order – DQ Make to Order – Raw Materials waiting – Cold StoneEngineer to Order – Anything you want – Home made
Design Produce Assemble Deliver
MTS
ATO
MTO
ETO
Impact of Life Cycle
Cassettes
Records
iTunes
8-Track
CDs
DATMiniDisc
Introduction Growth Maturity Decline
Pandora
YouTubeXM
AM/FM
Sony HX
Impact of Life CycleIntroduction: develop product, small-scale
production, customized, expensiveGrowth: ramp up production, marketing,
increasing standardization, lower pricesMaturity: standardized, volume production,
optimization, falling pricesDecline: cost minimization, eliminate
unprofitable products
ProductivityProductivity = Outputs / InputsPartial: Output/Labor or Output/Capital
320 miles driven / 8.2 gallons of gas = 39 mpg25 tons of strawberries / 50 acres = 0.5
tons/acreMultifactor:
Output / (Labor + Capital + Energy )20 tons of strawberries / ($2,250 chemicals +
$2,500 hoop house costs + $1,250 Planting + $12,000 harvesting)
= 20/18,000 = 0.00111