2 - Competitiveness, Strategy, and Productivity

Competitiveness

Standing on the industry; effectiveness relative to other organizations

Strategy

Identify what you want and how to achieve it; plans that determine how an organization pursues its goals

Productivity

How to manage resources while minimizing cost; effective use of resources

efficiency

Globalization: fostering _

supply chains

Globalization: optimized global _

innovation

Globalization: promoting _ by connecting diverse markets and suppliers

Agility

Globalization: Mandating greater _ to adapt to complex international environments

Mission

The organization’s purpose-what it provides to society

Strategy

The action plan to achieve the mission

Operations

Strategy influence _ and vice versa

Differentiation, cost leadership, Response

Strategies for competitive advantage

Differentiation

Better or unique products

Cost leadership

Low cost, high volume

Response

Fast, flexible service

Operations strategy

Aligns operations with company strategy. Considers product design, quality, process location. Layoit, human resources, supply chain. Inventory, scheduling, maintenance.

Technology, Cost, Quality, Speed, Flexibility

Achieving competitive advantage: key success factors

Design of goods/services

Managing quality

Process and capacity

Location strategy

Layout strategy

Human resources

Supply-chain management

Inventory management

Scheduling

Maintenance

Strategic OM Decisions Areas

Analyze the environment (SWOT)

Determine corporate mission

Formulate strategy

implement and monitor performance

Strategy and Development Implementation

International, Multidomestic, Global, Transnational

Global OM Strategies

International

Export or license existing product

Multidomestic

Decentralized, local autonomy

Global

Standardized products worldwide

Transnational

Combines global efficiency with local responsiveness

Productivity

Important for measuring performance; it is an index that measures output (goods and services) relative to the input (labor, materilas, energy, and other resources) used to produce it

(Current Productivity - Previous Productivity)/ Previous Productivity

Productivity Growth formula

Labor productivity

Units of output/value-added/ dollar value of ouput per labor hour/shift

Output/Input

Productivity formula

Machine productivity

Unit of / dollar value of output per machine hour

Capital productivity

Units of/dollar value of output per dollar input

Energy productivity

Units/ dollar value of output per kilowatt-hour

Identifying consumer wants and/or needs

is a basic input in an organization’s decision-making process, and central to competitiveness. The ideal is to achieve a ­ perfect match between those wants and needs and the organization’s goods and/or services.

Price and quality

key factors in consumer buying decisions. It is important to understand the trade-off decision consumers make between price and quality.

Advertising and promotion

are ways organizations can inform potential customers about features of their products or services, and attract buyers.

Product and service design

should reflect joint efforts of many areas of the firm to achieve a match between financial resources, operations capabilities, supply chain capabilities, and consumer wants and needs. Special characteristics or features of a product or service can be a key factor in consumer buying decisions

innovation; time-to-market

Other key factors in product and service design include (1) and the (2) for new products and services.