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00 competitiveness stratategy & productivity

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00 competitiveness stratategy & productivity

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00 competitiveness stratategy & productivity

  1. 1. Overview of Competitiveness, Strategy &Productivity Dr. T. T. Kachwala
  2. 2. Overview of Competitiveness, Strategy & Productivity  Competitiveness  Operations Strategy  Productivity – Definition, Measures of Productivity, Methods of improving Productivity.  Video (McDonald’s “Made for You”)  Productivity in Service Sector Slide 2
  3. 3. Competitiveness  Competitiveness: How effectively an organization meets the wants and needs of customers relative to others that offer similar goods or services (Exercise)  Competing using Marketing: Identifying Consumer wants and needs, Pricing, Advertising and Promotion (SWOT – O & T)  Competing using Operations: Product and Service Design, Cost, Location, Quality, Quick response, Flexibility, Inventory Management, Supply Chain Management, & Services (SWOT – S & W)  Two basic issues :–  First: What do the customers want?  Second: What is the best way to satisfy those wants? Slide 3
  4. 4. Operations Strategy  Operations strategy: The approach, consistent with organization strategy, that is used to guide the operations function.  Examples of strategies: Low cost, Scale-based, Specialization, Flexible operations, High quality, & Service  Quality-based strategies: Focuses on maintaining or improving the quality of an organization’s products or services for both attracting & retaining Customers  Time-based strategies: Focuses on reduction of time needed to accomplish tasks  What are the strategies of World Class Companies? Slide 4
  5. 5. Definition of Productivity 1. The term Production is absolute. While the term Productivity is relative (output relative to input) 2. It is ratio of output & input i.e. Productivity = (Measure of output) / (Measure of input) 3. Productivity can be defined as incremental change in output for a unit change in input. Slide 5
  6. 6. Measures of Productivity 1. Partial Measures 1. Labor productivity = Output (units) / Labor (hours) 2. Material Productivity = Output (units) / Material (kgs) 3. Machine Productivity = Output (units) / Machine (hours) 2. Multifactor Productivity Index = Output (units) / (Labor + Material + Machine) 3. Total Productivity Index = Output (units) / (All inputs used) Slide 6
  7. 7. Methods of improving Productivity 1. Increase the output for the same input (Quality Management) 2. Decrease the input for the same level of output (Reducing Wastage) 3. Small increase in input resulting in a substantial increase in output (Capital Investments in new facilities) Slide 7
  8. 8. Productivity Gains at Whirlpool 1. The plant is competing against the foreign manufacturers with much lower labour cost 2. The issue really is the labor content and the product i.e. Labour Productivity 3. Productivity at Whirlpool – 139% of the average of the industry, and rising by about 5% per year 4. Whirlpool uses gain sharing program called performance share & promises employees no job loss because of productivity gains Slide 8
  9. 9. Productivity in Service Sector 1. More difficult to measure & manage because it involves intellectual activities & high degree of variability: for example medical diagnosis, consultancy & legal services 2. Some of the factors that affect Productivity are Methods, Quality, Technology & Management (McDonald’s “Made for You”) 3. Standardizing Processes & Procedures where ever possible to reduce variability can improve Productivity & Quality: for example Burger Kings combined menu items in meal packages such as a burger, fries & soft drink which reduced time to take and process the order & this resulted in increased productivity Slide 9
  10. 10. Thanks and Good Luck Have a nice Day Dr. T. T. Kachwala

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