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Ready To Wear Apparel
Ready To Wear Apparel
Ready To Wear Apparel
Ready To Wear Apparel
Ready To Wear Apparel
Ready To Wear Apparel
Ready To Wear Apparel
Ready To Wear Apparel
Ready To Wear Apparel
Ready To Wear Apparel
Ready To Wear Apparel
Ready To Wear Apparel
Ready To Wear Apparel
Ready To Wear Apparel
Ready To Wear Apparel
Ready To Wear Apparel
Ready To Wear Apparel
Ready To Wear Apparel
Ready To Wear Apparel
Ready To Wear Apparel
Ready To Wear Apparel
Ready To Wear Apparel
Ready To Wear Apparel
Ready To Wear Apparel
Ready To Wear Apparel
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Ready To Wear Apparel

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  • 1. Operations Strategy
    • Kusdhianto Setiawan, SE, Siv.Øk
    • Department of Management
    • Faculty of Economics & Business
    • Gadjah Mada University
  • 2. Strategy Formulation
    • Defining a primary task: the purpose of the firm – what the firm is in the business of doing
      • PT. KAI ... is a transportation service company, not rail service company
      • Paramount Picture … is communication company, not a film maker company
      • Disney … is established to make people to be happy, not a cartoon maker/playland developer.
    • Assesing Core Competencies . Core competency: what a firm does better than anyone else … distinctive competence … competitive advantage
      • Exceptional service, higher quality, faster delivery, lower cost
    • Determining order winner and order qualifier
      • Order qualifier: characteristic of a product or service that qualify it to be considered for purchase by customer
      • Order winner: characteristic of a product or service that wins order in the market
      • Order winner and order qualifier evolve over time
    • Positioning the firm , choosing one or two important things to concentrate on and doing them extremely well
  • 3. Positioning Strategy
    • Competing on cost (Low-Cost Leadership Strategy)
      • Standardized products for large markets
      • Stabilizing the production process, tightening productivity standards, and investing in automatization
    • Differentiation Strategy
      • To make product that has unique features so that customer can differentiate the product with others competitors do.
    • Focus Strategy
      • To desain product for certain market segment that is not served by any producers (niche market)
    • Competing on quality
      • Defensive or Reactive mode: minimizing defect rates or conforming to design specifications.
      • Proactive mode: viewing quality as opportunity to please customers
    • Competing on flexibility
      • The ability to produce a wide variety of products, to introduce new products and modify existing ones quickly, and to respond to customers need
    • Competing on Speed
      • McDonalds, FedEx, Citicorp, etc.
  • 4. Operations Strategy at Wal-Mart
  • 5. Other General Strategic Considerations
    • Diversification
    • Acquisition
    • Cooperative Strategies
  • 6. Process-Centered Strategy
    • Core competencies are more likely to be processes
    • Processes cut accross functional lines and department
    Accounting Purchasing Manufacturing Sales Product Dev. Order Fulfillment Supply Chain Mngt Customer Service Function Process
    • Developing & Exploiting Core Competencies:
    • Enhancing the value a competency provides to customers
    • Transforming an internal competence into a salable item
    • Applying competencies in a creative way to new products and services
    • Creating new competencies and finding new markets
  • 7. Policy Deployment
    • Translate corporate strategy into measurable objectives
    Strategic Planning Corporate Strategy Mission & Vision Marketing Strategy Operations Strategy Financial Strategy Voice of the Business Voice of The Customer
  • 8. Derivation of an Action Plan Using Policy Deployment Reduce Business Cycle time by 50% Reduce production Cycle by 10% Reduce Purchasing cycle by 30% Reduce queue time by 50% Reduce setup time by 50% Cut lot sizes in half Increase electronic transaction by 30% Redesign supplier quality reporting process Set up supplier education groups Reduce supplier base by 50% ……… ……… ……… ……… ……… ……… What Who When Measure Resource Improve Work flow Billy Wray 9-1-01 Average Queue Time per job 5000
  • 9. Strategic Decisions in Operations
    • Products
    Copyright 2006 John Wiley & Sons, Inc. 2- Services Process and Technology Capacity Human Resources Quality Facilities Sourcing Operating Systems
  • 10. Operation Strategy
    • Products and Services
      • Make-to-order: products are designed, produced, and delivered to customer specification in response to customer order
        • Medical, legal, financial services
      • Make-to-stock: products are desgined, produced for ”standard” customers in anticipation of demand
        • Ready to wear apparel, books, tv, airline flights, spec homes, standard vacation package
      • Assemble-to-order: products are produced in standard modules to which options are added according to customer specification
        • Computer system, corporate training, industrial equipment
  • 11. Operation Strategy: Processes and Technology
    • The Product-Process Matrix
    Standardization Volume Low High Low High Projects Batch Production Mass Production Continuous Production
  • 12. Operation Strategy: Processes and Technology
    • The Service-Process Matrix
    Customization Labor intencity High Low High Low Proffesional Services Service Shop Mass Service Service Factory
  • 13. Operation Strategy
    • Capacity and Facilities
      • How much capacity? Type of warehouse? Inventory handling? How many workers to handle materials or products?
    • Human Resources
      • determining skill level, degree, outlining training requirements, selection criteria, setting up policies on evaluation, compensation, and incentives
    • Quality
      • Measures? Target level? Employees involvement? Types of training?
    • Sourcing
      • Vertical integration, outsourcing, alliances
    • Operating System
      • Information technology for planning and controll systems
  • 14. Key Performance Indicators
    • Source:
    • Robert Kaplan and David
    • Norton, Strategy Maps:
    • Converting Intangible
    • Assets into Tangible
    • Outcomes (Boston:
    • Harvard Business School
    • Press, 2004), Figure 3-2,
    • p. 67
  • 15. SWOT Analysis Strategy Analysis Internal S trengths Internal W eaknesses External O pportunities External T hreats Mission
  • 16. Critical Success Factors Production/Operations Decisions Sample Options Product Customized, or standardized Quality Define customer expectations and how to achieve them Process Facility size, technology, capacity Location Near supplier or near customer Layout Work cells or assembly line Human resource Specialized or enriched jobs Supply chain Single or multiple suppliers Inventory When to reorder, how much to keep on hand Schedule Stable or fluctuating production rate Maintenance Repair as required or preventive maintenance Marketing Service Distribution Promotion Channels of distribution Product positioning (image, functions) Finance/Accounting Leverage Cost of capital Working capital Receivables Payables Financial control Lines of credit
  • 17. Activity Mapping Courteous, but Limited Passenger Service Standardized Fleet of Boeing 737 Aircraft Competitive Advantage: Low Cost Lean, Productive Employees Short Haul, Point-to-Point Routes, Often to Secondary Airports High Aircraft Utilization Frequent, Reliable Schedules
  • 18. Activity Mapping Courteous, but Limited Passenger Service Standardized Fleet of Boeing 737 Aircraft Competitive Advantage: Low Cost Lean, Productive Employees Short Haul, Point-to-Point Routes, Often to Secondary Airports High Aircraft Utilization Frequent, Reliable Schedules Automated ticketing machines No seat assignments No baggage transfers No meals (peanuts)
  • 19. Activity Mapping Courteous, but Limited Passenger Service Standardized Fleet of Boeing 737 Aircraft Competitive Advantage: Low Cost Lean, Productive Employees Short Haul, Point-to-Point Routes, Often to Secondary Airports High Aircraft Utilization Frequent, Reliable Schedules No meals (peanuts) Lower gate costs at secondary airports High number of flights reduces employee idle time between flights
  • 20. Activity Mapping Courteous, but Limited Passenger Service Standardized Fleet of Boeing 737 Aircraft Competitive Advantage: Low Cost Lean, Productive Employees Short Haul, Point-to-Point Routes, Often to Secondary Airports High Aircraft Utilization Frequent, Reliable Schedules High number of flights reduces employee idle time between flights Saturate a city with flights, lowering administrative costs (advertising, HR, etc.) per passenger for that city Pilot training required on only one type of aircraft Reduced maintenance inventory required because of only one type of aircraft
  • 21. Activity Mapping Courteous, but Limited Passenger Service Standardized Fleet of Boeing 737 Aircraft Competitive Advantage: Low Cost Lean, Productive Employees Short Haul, Point-to-Point Routes, Often to Secondary Airports High Aircraft Utilization Frequent, Reliable Schedules Pilot training required on only one type of aircraft Reduced maintenance inventory required because of only one type of aircraft Excellent supplier relations with Boeing has aided financing
  • 22. Activity Mapping Courteous, but Limited Passenger Service Standardized Fleet of Boeing 737 Aircraft Competitive Advantage: Low Cost Lean, Productive Employees Short Haul, Point-to-Point Routes, Often to Secondary Airports High Aircraft Utilization Frequent, Reliable Schedules Reduced maintenance inventory required because of only one type of aircraft Flexible employees and standard planes aid scheduling Maintenance personnel trained only one type of aircraft 20-minute gate turnarounds Flexible union contracts
  • 23. Activity Mapping Courteous, but Limited Passenger Service Standardized Fleet of Boeing 737 Aircraft Competitive Advantage: Low Cost Lean, Productive Employees Short Haul, Point-to-Point Routes, Often to Secondary Airports High Aircraft Utilization Frequent, Reliable Schedules Automated ticketing machines Empowered employees High employee compensation Hire for attitude, then train High level of stock ownership High number of flights reduces employee idle time between flights
  • 24. Next Project…
    • Read BusinessWeek January 9,2006: “INSIDE INTEL”
    • Analyse INTEL’s next operations and marketing strategy
    • Compare INTEL’s strategy under Andy Grove and Paul Otellini era
    • What do you think about Otellini’s strategies on INTEL in todays business environment? Will the strategies work for INTEL? Please state your current analysis on the business environment and state your assumptions if any!
    • Make a good and professional presentation!
  • 25. Assignment...
    • Access http://www.acergy-group.com
    • Find and describe Acergy core competencies and please attach sufficient information to support your argument
    • Can you explore Acergy strategies, including what are its corporate strategy and operations strategy?
    • Please find other potential companies that you consider as ‘rivals’ to Acergy, why do you think so?
    • Arrange your answer and ideas into professional presentation material and be ready to present them!

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