Session 2 Operations Strategy and Competitiveness Chapter Objectives Introduce the concept of operations strategy and its various components,and show how it relates to the overall business strategy of the firm. llustrate how operations strategy pertains to adding value for the customer. Identify the different ways in which operations strategy can provide an organization with a competitive advantage. Introduce the concept of tradeoffs between different strategies and the need for a firm to align its operations strategy to meet the needs of the particular markets it is serving. Explain the difference between order-qualifiers and order-winners as they pertain to operations strategy. Describe how firms are integrating manufacturing and services to provide an overall"bundle of benefits"to their customers. Operations Management 2-2 1
1 Operations Strategy and Competitiveness Session 2 Operations Management 2–2 Chapter Objectives Chapter Objectives Chapter Objectives • Introduce the concept of operations strategy and its various components, and show how it relates to the overall business strategy of the firm. • Illustrate how operations strategy pertains to adding value for the customer. • Identify the different ways in which operations strategy can provide an organization with a competitive advantage. • Introduce the concept of tradeoffs between different strategies and the need for a firm to align its operations strategy to meet the needs of the particular markets it is serving. • Explain the difference between order-qualifiers and order-winners as they pertain to operations strategy. • Describe how firms are integrating manufacturing and services to provide an overall “bundle of benefits” to their customers
Productivity Contribution:Wal-Mart (VIDEO LINK) (FINANCING) (Organizationa WAL-MAT Learning) (Point-of-sale data) satellite ofsale data) communications Retail Outlet SUPPORT) Distribution Center Operations Management 23 Southwest Airlines A review of the operational and cultural aspects of Southwest Airlines Southwest Airlines was established in 1971 in Texas with 3 planes and routes between Dallas.Houston and San Antonio. Business model was simply:"If you get your passengers to their destinations when they want to get there,on time,at the lowest possible fares,and make darn sure they have a good time doing it, people will fly your airline. Today Southwest Airlines is the 4th largest airline in the United States servicing 58 cities with a fleet of 366 planes and is on its 34th straight year of profitability. Operations Management 飞 2
2 Operations Management 2–3 Productivity Contribution: Wal Productivity Contribution: Wal Productivity Contribution: Wal-Mart -Mart (COMMUNICATIONS SUPPORT) Distribution Center Suppliers Payment WAL-MAT (FINANCING) satellite communications Retail Outlet (Point-of-sale data) (Organizational Learning) （VIDEO LINK） (Point-of-sale data) Operations Management 2–4 Southwest Airlines Southwest Airlines Southwest Airlines • A review of the operational and cultural aspects of Southwest Airlines Southwest Airlines was established in 1971 in Texas with 3 planes and routes between Dallas, Houston and San Antonio. Business model was simply: “If you get your passengers to their destinations when they want to get there, on time, at the lowest possible fares, and make darn sure they have a good time doing it, people will fly your airline.” Today Southwest Airlines is the 4th largest airline in the United States servicing 58 cities with a fleet of 366 planes and is on its 34th straight year of profitability
Southwest Airlines 1.No assigned seating 2.No beverage carts on-board 3.Point-to-point short haul only-no hubs 4.Fly into secondary cities 5.Only Boeing 737 airplanes 6.Colored Plastic Boarding Cards 7.Captains help clean-up the plane,if necessary Operations Management 2-5 Southwest Airlines Nb32g Limited 名 No seat departures High pc gate crews contracts airline" 3
3 Operations Management 2–5 Southwest Airlines Southwest Airlines Southwest Airlines 1. No assigned seating 2. No beverage carts on-board 3. Point-to-point short haul only – no hubs 4. Fly into secondary cities 5. Only Boeing 737 airplanes 6. Colored Plastic Boarding Cards 7. Captains help clean-up the plane, if necessary Operations Management 2–6 Southwest Airlines Southwest Airlines Southwest Airlines
Ikea More with omple buying parking Limited egr Self-selection by customers Ease of g Most items in Self-assembly by customers "Knock down" Year-round kit packoging stocking anfchuing cost 100 Operations Strategy-An Overview ·Operations Strategy -How the operations function contributes to competitive advantage. ·Competitiveness -A company's position in the marketplace relative to its competition. Competitive Priorities -How the operations function provides a firm with a competitive advantage. -Priorities-Low cost,high quality,fast delivery, flexibility,and service. Operations Management w 4
4 Operations Management 2–7 Ikea Ikea Operations Management 2–8 Operations Strategy Operations Strategy Operations Strategy – An Overview – An Overview • Operations Strategy –How the operations function contributes to competitive advantage. • Competitiveness –A company’s position in the marketplace relative to its competition. • Competitive Priorities –How the operations function provides a firm with a competitive advantage. –Priorities—Low cost, high quality, fast delivery, flexibility, and service
What is Operations Strategy? ·Operations Strategy -Determining how to best utilize the firm's resources to achieve corporate objectives. Major long-term structural issues -How big do we make the facilities? -Where do we locate them? -When do we build them? -What type of process(es)do we install to make the products? Operations Management 29 Operations Strategy Means Adding Value for the Customer Maximize value added Transformation Inputs process Outputs (customers and/or (goods and services) materials) ·How to add value: -Reduce product costs to customer. -Make the product more readily available. -Provide faster service. -Provide customers with additional relevant information. -Customize the product to the customer's specific needs. Operations Management 2-10 J
5 Operations Management 2–9 What is Operations Strategy? What is Operations Strategy? What is Operations Strategy? • Operations Strategy –Determining how to best utilize the firm’s resources to achieve corporate objectives. • Major long-term structural issues –How big do we make the facilities? –Where do we locate them? –When do we build them? –What type of process(es) do we install to make the products? Operations Management 2–10 Operations Strategy Means Adding Value for the Customer Operations Strategy Means Operations Strategy Means Adding Value for the Customer Adding Value for the Customer • How to add value: –Reduce product costs to customer. –Make the product more readily available. –Provide faster service. –Provide customers with additional relevant information. –Customize the product to the customer’s specific needs