Operation Management TRUE OR FALSE PART 2

PRODUCTIVITY

PRODUCTIVITY

• is essentially a scorecard of how efficiently resources are used and a measure of competitiveness.

• can be measured for individuals, department, or organizations

COMPETITIVENESS

• how effectively an organization meets the wants and needs of customers relative to others that offer similar goods or services.

• the degree to which a nation can produce goods and services that meet the test of international markets

CONDITIONS THAT CAUSES HIGH RIVALRY AMONG COMPETING FIRMS

1.When the number of competing firms is high 2. When competing firms are of similar size 3. When competing firms have similar capabilities 4. When the demand for the industry's products is falling 5. When the product or service prices in the industry is falling 6. When consumers can switch brands easily 7. When barriers to leaving the market are high 8. When barriers to entering the market are low 9. When fixed costs are high among competing firms 10. When the product is perishable 11. When rivals have excess capacity 12. When consumer demand is falling 13. When rivals have excess inventory 14. When rivals sell similar products/services 15. When mergers are common in the industry

COMPETITIVE CAPABILITIES

• are the cost, quality, time, and flexibility dimensions that a process or supply chain possesses and can deliver.

LOW-COST OPERATION

-Delivering a service or a product at the lowest possible cost to the satisfaction of external or internal customers of the process or supply chain PROCESS CONSIDERATION

• To reduce cost

• Make them efficient using rigorous process analysis -Investment in new automated facilities or technologies to lower the cost. EXAMPLE

• Costco

TOP QUALITY

• Delivering an outstanding service or product PROCESS CONSIDERATION- Require a high level of customer contact & helpfulness, courtesy, and availability

• require superior product features, close tolerance, and greater durability from a manufacturing process EXAMPLE

• Rolex

CONSISTENT QUALITY

producing services or products that meet design specifications on a consistent basis PROCESS CONSIDERATION

• design and monitored to reduce errors, prevent defects, and achieve similar outcomes overtime, regardless of the ''level'' of quality EXAMPLE: MCDONALD'S

DELIVERY SPEED

• quickly filling a customer's order PROCESS CONSIDERATION -reduce lead time between the receipt of a customer order and filling it) -keeping backup capacity cushions, storing inventory -using transportation options EXAMPLES -DELL

ON-TIME DELIVERY

Meeting delivery-time promises PROCESS CONSIDERATION -reduce lead time & planning processes( forecasting, appointments, order promising, scheduling, and capacity planning) -used to increase percent of customer orders shipped when promised

DEVELOPMENT SPEED

Quickly introducing a new service or a product PROCESS CONSIDERATION -aim to achieve cross-functional integration and involvement of critical external suppliers EXAMPLES -ZARA

CUSTOMIZATION

satisfying the unique needs of each customer by changing service or product designs PROCESS CONSIDERATION -customization strategy typically have low volume -ability to reconfigure processes to meet diverse types EXAMPLES

• Ritz Carlton

VARIETY

Handling a wide assortment of services or products efficiently PROCESS CONSIDERATION

• supporting variety must be capable of larger volumes than processes customization -not necessarily unique to specific customers and may have repetitive demands EXAMPLES: -Amazom.com

VOLUME FLEXIBILITY

accelerating or decelerating the rate of production of services or products quickly to handle large fluctuations in demand PROCESS CONSIDERATION -designed for excess capacity and excess inventory to handle demand fluctuations -adjusts capacity without accumulation of inventory or excess capacity EXAMPLE:

• The United States Post Office (USPS)

GLOBALIZATION

means customers, talent, and suppliers are worldwide

SIX REASONS FOR DECIDING TO CHOOSE TO TRANSITION TO AN INTERNATIONAL BUSINESS MODEL

1. To improve the supply chain

2. To reduce costs and exchange rate risk

3. To improve operations

4. To understand markets

5. To improve products 6 ) To attract and retain global talent