Operations strategy ppt @ bec doms
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Operations strategy ppt @ bec doms
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Operations strategy ppt @ bec doms
- 8. Boeing Suppliers (777) Firm Country Parts Alenia Italy Wing flaps AeroSpace Technologies Australia Rudder CASA Spain Ailerons doors, wing section Fuji Japan Landing gear GEC Avionics United Kingdom Flight computers Korean Air Korea Flap supports Menasco Aerospace Canada Landing gears Short Brothers Ireland Landing gear doors Singapore Aerospace Singapore Landing gear doors
- 15. Some Multinational Corporations Workforce Company Home Country % Sales Outside Home Country % Assets Outside Home Country % Foreign Colgate- Palmolive USA 72 63 NA Dow Chemical USA 60 50 NA Gillette USA 62 53 NA Honda Japan 63 36 NA IBM USA 57 47 51 Citicorp USA 34 46 NA
- 16. Some Multinational Corporations Workforce Company Home Country % Sales Outside Home Country % Assets Outside Home Country % Foreign ICI Britain 78 50 NA Nestlé Switzerland 98 95 97 Philips Netherlands 94 85 82 Siemens Germany 51 NA 38 Electronics Unilever Britain & Netherlands 95 70 64
- 20. Trade Pays GDP (PPP*) per Person 1990 Growth Rates, % *PPP – Purchasing Power Parity
- 35. Developing Missions and Strategies
- 36. Mission Mission - where are you going? Organization’s purpose for being Provides boundaries & focus Answers ‘What do we provide society?’
- 40. Factors Affecting Mission Mission Philosophy & Values Profitability & Growth Environment Customers Public Image Benefit to Society
- 42. Strategy Action plan to achieve mission Shows how mission will be achieved Company has a business strategy Functional areas have strategies
- 43. Strategy Process Marketing Decisions Operations Decisions Fin./Acct. Decisions Company Mission Business Strategy Functional Area Functional Area Strategies
- 49. OM’s Contribution to Strategy Response (Faster) Quality Product Process Location Layout Human Resource Supply Chain Inventory Scheduling Maintenance HP’s ability to follow the printer market Differentiation (Better) Cost leadership (Cheaper) Southwest Airlines No-frills service Sony’s constant innovation of new products Pizza Hut’s five-minute guarantee at lunchtime Federal Express’s “absolutely, positively on time” Motorola’s automotive products ignition systems Motorola’s pagers IBM’s after-sale service on mainframe computers Fidelity Security’s broad line of mutual funds FLEXIBILITY Design Volume LOW COST DELIVERY Speed Dependability QUALITY Conformance Performance AFTER-SALE SERVICE BROAD PRODUCT LINE Operations Decisions Examples Specific Strategy Used Competitive Advantage
- 51. Goods & Services and the 10 OM Decisions
- 52. Goods & Services and the 10 OM Decisions – Continued
- 53. Goods & Services and the 10 OM Decisions – Continued
- 54. Goods & Services and the 10 OM Decisions – Continued
- 55. Process Design Low Moderate High Volume High Moderate Low Variety of Products Process-focused Job Shops (Print shop, emergency room , machine shop, fine dining Repetitive (modular) focus Assembly line (Cars, appliances, TVs, fast-food restaurants) Product-focused Continuous (steel, beer, paper, bread, institutional kitchen) Mass Customization Customization at high Volume (Dell Computer’s PC)
- 56. Operations Strategies for Two Drug Companies
- 57. Operations Strategies for Two Drug Companies - Continued
- 58. Operations Strategies for Two Drug Companies - Continued
- 59. Operations Strategies for Two Drug Companies - Continued
- 65. Stages in the Product Life Cycle Introduction Growth Maturity Decline Growth rate
- 70. Strategy and Issues During a Product’s Life
- 73. SWOT Analysis to Strategy Formulation Strategy Mission External O pportunities Internal S trengths Internal W eaknesses External T hreats Competitive Advantage
- 74. Identifying Critical Success Factors Decisions Sample Option Chapter Product Customized, or standardized 5 Quality Define customer expectations and how to achieve them 6, S6 Process Facility size, technology, capacity 7, S7 Location Near supplier or customer 8 Layout Work cells or assembly line 9 Human resource Specialized or enriched jobs 10, S10 Supply chain Single or multiple source suppliers 11, S11 Inventory When to reorder, how much to keep on hand 12, 14,16 Schedule Stable or fluctuating productions rate 13, 15 Maintenance Repair as required or preventive maintenance 17 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 Production/Operations
- 75. Activity Mapping: Southwest Airline’s Low Cost Competitive Advantage Courteous, but limited passenger service Lean, productive employees Short haul, point-to-point routes, often to secondary airports High aircraft utilization Standardized fleet of Boeing 737 aircraft Frequent, reliable schedules Competitive Advantage: Low Cost
- 76. Activity Mapping: Southwest Airline’s Low Cost Competitive Advantage Courteous, but limited passenger service No seat assignments No baggage transfers Automated ticketing machines No meals
- 77. Activity Mapping: Southwest Airline’s Low Cost Competitive Advantage Short haul, point-to-point routes, often to secondary airports Lower gate costs at secondary airports High number of flights, reduces employee idle time between flights
- 78. Activity Mapping: Southwest Airline’s Low Cost Competitive Advantage Frequent, reliable schedules High number of flights reduces employee idle time between flights Saturate a city with flights lowering administrative costs per passenger for that city
- 79. Activity Mapping: Southwest Airline’s Low Cost Competitive Advantage Standardized fleet of Boeing 737 aircraft Pilot training 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
- 80. Activity Mapping: Southwest Airline’s Low Cost Competitive Advantage High aircraft utilization Flexible employees and standard planes aids scheduling Flexible union contracts Maintenance personnel trained on only one type of aircraft 20 minute gate turnarounds
- 81. Activity Mapping: Southwest Airline’s Low Cost Competitive Advantage Lean, productive employees High level of stock ownership Hire for attitude, then train High employee compensation Empowered employees Automated ticket machines
- 82. Activity Mapping: Southwest Airline’s Low Cost Competitive Advantage Courteous, but limited passenger service Lean, productive employees Short haul, point-to-point routes, often to secondary airports High aircraft utilization Standardized fleet of Boeing 737 aircraft Frequent, reliable schedules Competitive Advantage: Low Cost
- 83. Southwest Airline’s Low Cost Competitive Advantage
- 84. Vanguard’s Activity System A broad array of mutual funds excluding some fund categories Efficient investment management approach offering good consistent performance Straightforward client communication and education Strict cost control Direct distributions Very low expenses passed on to client
- 85. How It Works Company Mission Business Strategy Functional Area Strategies Marketing Decisions Operations Decisions Fin./Acct. Decisions If competitive advantage, leads to achieving Distinctive competencies affect
- 86. Four International Operations Strategies
Editor's Notes
- You might begin the the thread of a discussion about mission and strategies forming the context for decision making within the company. This discussion can be continued throughout the chapter.
- This slide can be used to begin a discussion of the benefits and risks of “going global.” Students should be asked how risk is affected when there is a localized economic downturn such as that in Asia (particularly Japan) in early 1998. Students should also be asked to discuss the role of “paperless” design in such a global arrangement.
- This slide frames the discussion of management issues in global operations. Subsequent slides expand on the issues in Supply-Chain Management, Location Decisions, and Logistics Management. Students should not only understand these issues, but should also have some concept as to why there are significant differences between global and domestic (or national) operations.
- One way to get at the differences between these definitions is to have students visit the web sites of a number of companies and gather information about them, then use these companies as examples. The list of companies could be give out in a prior class, or at the beginning of the semester (we suggest that the list be given at the beginning of the semester - and the information gathered used throughout the semester). Ask the students to identify their company and place it in one of the categories. Seek their justification for its placement.
- This slide can be used to further explore the characteristics of multinational companies
- This slide can be used to further explore the characteristics of multinational companies
- This slide uses a familiar example to demonstrate the degree of globalization in the production of a common product.
- This slide can be used to frame a discussion of the benefits of globalization. You should be certain to ask students if they can see any pitfalls.
- You can use this slide to frame a discussion as to the role and impact of trade and tariffs. If time permits, you might ask students to, as preparation for this class, use the World-Wide Web to research the differing opinions of U.S. business and labor regarding the GATT and NAFTA agreements.
- This may sound like a strange proposition to students - but is it an extreme example of what may occur if trade is complete unregulated? Ask students what other alternatives to (or extensions of) today’s practices they can think of.
- This slide introduces four considerations required for global operations. Ask students which consideration they believe to present the most difficult problems. The following several slides elaborate on the four considerations.
- In June 1998, a company began marketing caskets (that’s right, caskets) directly to the consumer over the Internet. Ask your students to consider how the design of this product might be impacted if the company begins to offer this product globally.
- This slide looks at some of the process design benefits of going global. Are there some pitfalls?
- This slide introduces the use of Critical Success Factors in Global Location Analysis. One might ask students to consider the problem of obtaining the information required for such an analysis. How does information technology contribute? What are its limitations?
- This slide presents a list of national characteristics one may wish to consider. Ask students to add to this list.
- This slide introduces the impact of culture and ethics on management of the global enterprise. Students should be asked “How does a manager of a U.S. firm deal with differing cultural expectations?” One example would be the use of bribery as an element in contract negotiations. U.S law prohibits the use of bribery. What problems or ethical dilemmas does this create for the manager?
- The best approach to this slide may be to present examples to illustrate the points listed. Two examples might be: a lack of infra-structure within many second and third world countries limits the nature or degree of many services; and countries may place special restrictions on the import of particular products (Brazil, at least until recently, required that all computers sold in the country be assembled there).
- Here, it is important to at least note why one must take a different perspective on these issues.
- You might either suggest or ask the students to suggest the names of one or more companies which use one or another of these strategies.
- This and the subsequent slide simply prompt students to think about some of the unexpected relationships. You might ask students to suggest some of the reasons such relationships developed.
- You might ask students to prepare for class by visiting several company web sites, and, for each company: locating the company mission, and printing a copy of the mission to bring to class. The students should also be asked to, if possible, determine the strategy used by the company to achieve its avowed mission. You might even ask that a student finding a mission statement that they believe of special interest, bring a copy of the statement on a transparency. You might begin the class by asking students why a company’s mission is so important. Does it really convey important information, or is it, as some cynics might claim, simply an expression of wishful thinking? Among other benefits, the mission provides an “umbrella” under which decisions should be made. This may be especially useful for a global enterprise. If the students have obtained the mission statements of companies with which they are familiar, you might ask if their perception of the company suggests that it is fulfilling it published mission. If the answer is “No,” ask what suggests otherwise.
- Ask the students to compare the mission of Circle K with this of Merck (and with those they have located). What does the recognition of employees and investors signify? Is it reasonable to suggest that employees and investors should be recognized in all mission statements? Does such recognition have any significance with regard to employee working conditions, corporate decision making, or corporate attitude toward risk?
- One can obviously discuss the impact of each of these factors on a company mission. An alternative is to have each student take a company mission and identify the connection to each of the factors. In particular, ask students if the connection is uni- or bi-directional, i.e., “The environment within which a company operates may impact its mission, can the mission also impact the environment?”
- The distinction between mission and strategy probably requires some discussion. The best approach might be to ask students, who have obtained the mission statements of companies with which they are familiar, to discuss their perception of the company strategy. There may also be companies which publish a statement of strategy as well their mission on their web site.
- Here, you might introduce the hierarchical nature of strategies, and, as prelude to subsequent slides, ask students whether they believe it is better to plan from the top down, or bottom up.
- This slide can be used to frame a discussion of the process of developing strategies. If so, the steps of Environmental and SWOT Analysis should be expanded. You might also ask the students “Whose responsibility is Strategy Planning?” Is participation in this process restricted to upper level management, or does it involve all levels of employees? Might one have different expectations for the answer to this question for a particular company ( Circle K as opposed to Merck)? The contrast between strategy planning for all levels of the organization at once, versus strategy planing for the organization as a whole, with subsequent “rolldown” to lower levels might be discussed.
- This slide simply opens the discussion on the several modes of competing.
- Ask students for examples of companies competing on the basis of differentiation. If they cannot identify any, you can fall back on a discussion of McDonalds, Burger King, and Wendys. Ask the students to identify the differences between the three franchises.
- One of the major points to be made here is that “competing on cost” does not necessarily mean “having the lowest cost: There is also the notion of value, and in particular, value defined by the customer . There are some drivers who will argue that Volvo competes on cost suggesting that Volvos are “low cost” for a vehicle with such “demonstrated” safety benefits and long life expectancy.
- Most students readily acknowledge that competing on the basis of response involves the notion of quickness or speed, so the discussion should probably concentrate on the other three elements. The concept of and need for “institutionalization” will likely require significant discussion. Here you might point out that “response” is seldom the prerogative of any, single, individual - appropriate response is often the outcome of the work of many.
- You might point out that businesses now operate in a very rapidly changing environment - and that these changes are often in fundamental characteristics of the environment, e.g., use of the world-wide web is enabling some very fundamental changes in the way in which firms do business. Competing on any basis (differentiation, cost, or response) requires the ability to adapt to these changes on a firm-wide basis, not as individuals..
- Students can be asked to add to the list of examples shown in this slide. You might also ask students whether OM can contribute in similar ways in all industries.
- This slide simply introduces the 10 decisions. You may not wish to do more than “define” the decision area and give one or two examples.
- Here again, you might look particularly at the impact of the difference between goods and services. You may be able to get students to consider such consequences as the level of worker skill required, the difficulty in controlling quality, etc.
- This slide can be used to introduce the process design options, and help students begin to understand the conditions of volume and variety under which they are most useful. Student should be asked to provide and discuss examples.
- Here it may be helpful to point out that although the strategies are significantly different for the two companies, both successful. If possible, you should have students consider what the missions of the two companies might be.
- This is the first of several slides portraying the results of some fairly recent research. You might point out that these are necessary conditions, perhaps not sufficient.
- If one argues that the quality/service categories really belong in OM, the total for OM reaches 44%.
- A second study: 248 business were asked to rate thirty two categories. The more general results are given in the next slide
- Make the point here that this is a minimum set of “necessary” issues which must be understood. Understanding these alone does not guarantee success. If you have not done it before, here is where you can begin to prod students into looking at the true complexity faced by the operations manager.,
- You might begin here to raise the notion that change in strategy is not optional - but must occur when any other factor(s) change(s). The Japanese have come to view strategy as being continually adaptive. The next slide lists the stages in the product life cycle. The several slides following that elaborate on strategic issues over the product life cycle.
- The purpose of this slide is simply to introduce the stages of the product life cycle and provide time for the instructor to present brief definitions. A context for further elaboration is provided by the following four slides. The fifth enables a useful summary.
- As you discuss the product life cycle, it may be helpful to ask students to identify products they believe to currently be in the stage under discussion. Ask them what evidence they have to support their conclusions.
- This slide can be useful in summarizing strategy changes over the lifecycle of the product.
- It might be helpful here to define “critical success factors.”
- This slide can be used to frame a discussion of SWOT analysis. Students should be asked what types of questions might be appropriate at each stage.
- This slide frames the individual elements of the SWOT analysis process. The notion that SWOT must look at both internal and external issues can be raised here. It may also be worthwhile stressing that the Internal analysis must be: 1. A critical analysis with an honest, open-minded assessment, not politically driven 2. An assessment of strengths and weaknesses in light of the specific corporate mission.
- This slide introduces the notion of Critical Success Factors. Many students seem to perceive Critical Success Factor analysis as an “easy” process. It may help to ask your students to develop a list of critical success factors for a business with which they are familiar. (If all else fails, ask them to develop the critical success factors for the college or university they attend.) Once they have identified a number of factors (the number depending on the time available), make them go back and justify the importance of each factor. As they are in the process of justification, ask “What happens if the business fails to adequately address this factor?” At this point, begin to help them differentiate between factors which will result in sub-optimal performance and those which will result in outright failure. In many colleges/universities, for example, offering a top quality program may not be necessary, while ensuring that each graduate has a job offer upon graduation may be.
- Discuss how the individual strategies combine to achieve the overall company mission.
- This slide can be used to tie coverage of Chapter 2 together.