OPMAN lesson 2

Mission and Strategy

An effective operations management effort requires?

Mission

organization is heading

Strategy

Defines how to get there

Competitive Advantage

creation of a system unique

Objective

customer value efficiency and sustainably

three strategies

Differentiation, Low Cost, Response

Competing on Differentiation/Strategy

providing uniqueness in product or services / firm

Experience Differentiation

experiences

Disneyland Resort

Immersive rides

Hard Rock Cafe

music and videos

Starbucks

music and aroma of fresh coffee

competing on cost/ low-cost leadership strategy

maximum value/driving down

example of competing on cost/ low-cost leadership strategy

Walmart (superstores)

Franz Colruyt (minimal overhead cost)

RedDoorz strategy:

affordable lodging

RedDoorz method:

budget friendly

Competing on Response/Aspects of Response

Flexible Response

Reliable Scheduling

Quickness

Flexible Response

ability to match changes

Ex. (Hilton Hotels)

Reliable Scheduling

meaningful schedules and performance

Ex. (Hilton Hotels)

Quickness

speed in product development

Ex: Marriott International (fast food production)

10 Operations Decisions

Product

Quality

Process

Location

Layout

Human Resources

Supply Chain

Inventory

Scheduling

Maintenance

Key Success Factors (KSFs)

critical capabilities/must excel

Characteristics of Key Success Factors

Industry Specific

Focused on operational necessities.

Example of Key Success Factors

McDonald’s

Core Competencies

represent the unique strengths

Core Competencies definition:

perform certain activities

Core competencies significance:

differentiate themselves

Interrelationship Between KSFs and Core Competencies

KSFs - necessary conditions

Core Competencies - rise above its competitors

Operationalizing KSFs and Core Competencies

organization must align

Steps for Implementation

Analyze Industry and Competitive Environment

Develop Supporting Capabilities

Integrate KSFs and Core Competencies

Continuously Monitor and Improve

Analyze Industry and Competitive Environment

gaps

Develop Supporting Capabilities

Build systems/partnerships

Integrate KSFs and Core Competencies

rooted in core/engine design

Continuously Monitor and Improve

market trends/ahead

10 Strategic OM Decisions and Their Link to KSFs

Design of Goods and Services

Managing Quality

Process and Capacity Design

Location Strategy

Layout Strategy

Human Resources and Job Design

Supply Chain Management

Inventory Management

Scheduling

Maintenance

Design of Goods and Services

customer expectations

Managing Quality

Implementing TQM (Total Quality Management)

Process and Capacity Design

workflows

Location Strategy

faster delivery

Layout Strategy

physical spaces

Human Resources and Job Design

employee skills and motivation

Supply Chain Management

supplier networks

Inventory Management

stock levels

Scheduling

production schedules

Maintenance

ensuring equipment

Operational Challenges in Hospitality and Tourism

Managing Customer Expectations

Workforce Management

Seasonality and Demand Fluctuations

Operational Costs

Maintaining Service Quality

Technology Integration

Health, Safety, and Hygiene

Sustainability and Environmental Impact

Crisis Management

Cultural and Regional Diversity

Managing Customer Expectations

Challenge: paramount

Impact: harm brand

Solutions: use feedback systems (surveys, reviews)

Workforce Management

Challenge: turnover rates/cultural

Impact: increased costs

Solution: talent/growth/use technology

Seasonality and Demand Fluctuations

Challenges: peaks (holidays)

Impact: streams

Solution: dynamic pricing/cross training/off-season

Operational Costs

Challenges: cost of utilities,food,labor/prices

Impact: margins

Solutions: energy/source local/supply chain

Maintaining Service Quality

Challenges: shifts/personalized

Impacts: poor

Solutions: benchmarks/shopping

Technology Integration

Challenges: rapidly/data security

Impact: outdated/breaches

Solutions: online booking/cybersecurity

Health, Safety, and Hygiene

Challenges: cleanliness/health risks

Impact: damage

Solutions: safety protocols/practices

Sustainability and Environmental Impact

Challenge: pressure/traffic

Impact: publicity

Solutions:solar/recycling/educate

Crisis Management

Challenges: disaster

Impact: long term

Solution: plans/communicate

Cultural and Regional Diversity

Challenge: backgrounds/language barriers

Impact: miscommunication

Solutions: multilingual/menus

Emerging Trends Impacting Operational Challenges

Digital Transformation

Personalization

Health Tourism

Digital Transformation

growth of AI

Personalized

tailored

Health Tourism

wellness