W2 2.9
© Ana
Ana G.
G. Méndez
Méndez University
UniversitySystem,
System,2012.
2012.AllAll
rights
reserved.
©
rights
reserved.
© Ana G. Méndez University System, 2012. All rights reserved.
1
Perfil
 A Global View of Operations
 Developing Mission Statements and
Strategies
 Achieving a Competitive Advantage
Through Operations
 Ten Strategic OM Decisions
 Strategy Development and
Implementation
 Goods and Services Selection
 Product Development
 Defining a Product
 Service Design
2
© Ana G. Méndez University System, 2012. All rights reserved.
Objetivos Especificos
At the end of Workshop Two, the student will be able to:
1. Develop a mission statement and strategy
2. Identify and explain three strategic approaches to
competitive advantage
3. Identify and define the 10 decisions of operation
management
4. Understand the significance of key success factors
and core competencies
5. Identify and explain four global operation strategy
options
3
© Ana G. Méndez University System, 2012. All rights reserved.
Objetivos Especificos
At the end of Workshop Two, the student
will be able to:
6. Describe product development system
7. Describe how time-base competition is
implemented
8. Understand how products and services
are defined
9. Apply decision trees to product issues
10. Describe customer participation in the
design and production of services
4
© Ana G. Méndez University System, 2012. All rights reserved.
Objetivos Especificos
“Processes by which goods, services, capital,
people, information, and ideas flow across
national borders.” (Grewal/Levy)
“Trend toward greater economic, cultural ,
political, and technological interdependence
among national institutions and economies.”
(Wild/Wild/Han)
Grewal, D., & Levy, M. (2009). Marketing. New York: McGraw-Hill Companies, Inc.
Wild, J., Wild, K., & Han, J. (2008). International Business: The Challenges of Globalization. Upper Saddle River, NJ: Pearson Prentice Hall.
Prepared by Gilberto Clavell
© Ana G. Méndez University System, 2012. All rights reserved.
5
Objetivos Especificos
Top Ten Globalized Countries
Wild, J., Wild, K., & Han, J. (2008). International Business: The Challenges of Globalization. Upper Saddle River, NJ: Pearson Prentice Hall.
Series1
Wild, J., Wild, K., & Han, J. (2008). International Business: The Challenges of Globalization. Upper Saddle River, NJ: Pearson Prentice Hall.
6
© Ana G. Méndez University System, 2012. All rights reserved.
Reasons to Globalize are:
Tangible 1. Reduce costs (labor, taxes, tariffs, etc.)
Reasons 2. Improve the supply chain
3. Provide better goods and services
4. Understand markets
Intangible 5. Learn to improve operations
Reasons 6. Attract and retain global talent
7
© Ana G. Méndez University System, 2012. All rights reserved.
Michael Porter suggested four
"generic" business strategies
that could be adopted in order
to gain a competitive advantage.
The four strategies relate to the
extent to which the scope of a
businesses' activities are
narrow versus broad and the
extent to which a business
seeks to differentiate its
products.
The four strategies are
summarized in the figure below:
8
© Ana G. Méndez University System, 2012. All rights reserved.
• An economic system in
which goods and services
are exchanged for one
another or money, on the
basis of their perceived
worth. Every business
requires some form of
investment and a sufficient
number of customers to
whom its output can be
sold at profit on a
consistent basis.
9
© Ana G. Méndez University System, 2012. All rights reserved.
Mission statements
tell an organization
where it is going.
The Strategy tells the
organization how to
get there.
10
© Ana G. Méndez University System, 2012. All rights reserved.
Our Mission: To spread the spirit of Rock ‘n’ Roll
by delivering an exceptional entertainment and
dining experience. We are committed to being
an important, contributing member of our
community and offering the Hard Rock family a
fun, healthy, and nurturing work environment
while ensuring our long-term success.
11
© Ana G. Méndez University System, 2012. All rights reserved.
Philosophy
and Values
Profitability and
Growth
Environment
Mission
Customers
Public Image
Benefit to
Society
12
© Ana G. Méndez University System, 2012. All rights reserved.
 Action plan to achieve
mission
 Functional areas have
strategies
 Strategies exploit
opportunities and
strengths, neutralize
threats, and avoid
weaknesses
13
© Ana G. Méndez University System, 2012. All rights reserved.
 Differentiation – better, or at least
different
 Cost leadership – cheaper
 Response – rapid response
14
© Ana G. Méndez University System, 2012. All rights reserved.
Operations
Decisions
Examples
Product
Quality
Process
Specific
Strategy Used
Competitive
Advantage
FLEXIBILITY:
Sony’s constant innovation
of new products………………………………....Design
HP’s ability to lead
the printer market………………………………Volume
Southwest Airlines No-frills service……..…..LOW COST
Location
Layout
Human
resource
Supply chain
Inventory
Scheduling
DELIVERY:
Pizza Hut’s 5-minute guarantee
at lunchtime…………………..…..………………….Speed
Federal Express’s “absolutely,
positively on time”………………………..….Dependability
QUALITY:
Motorola’s HDTV converters….……........Conformance
Motorola’s pagers………………………..….Performance
Caterpillar’s after-sale service
on heavy equipment……………....AFTER-SALE SERVICE
Differentiation
(Better)
Response
(Faster)
Cost
leadership
(Cheaper)
Fidelity Security’s broad
line of mutual funds………….BROAD PRODUCT LINE
Maintenance
© Ana G. Méndez University System, 2012. All rights reserved.
15
1. Goods and service
design
2. Quality
3. Process and
capacity design
4. Location selection
5. Layout design
6. Human resources
and job design
7. Supply chain
management
8. Inventory
9. Scheduling
10. Maintenance
16
© Ana G. Méndez University System, 2012. All rights reserved.
High
Cost Reduction Considerations
Global Strategy
Transnational Strategy
 Standardized product
 Economies of scale
 Cross-cultural learning
 Move material, people, ideas
across national boundaries
 Economies of scale
 Cross-cultural learning
Examples
Texas Instruments
Caterpillar
Otis Elevator
Examples
Coca-Cola
Nestlé
International Strategy
 Import/export or
license existing
product
Multi-domestic Strategy
 Use existing
domestic model globally
 Franchise, joint ventures,
subsidiaries
Examples
U.S. Steel
Harley Davidson
Examples
Heinz
McDonald’s
The Body Shop
Hard Rock Cafe
Low
Low
High
Local Responsiveness Considerations
(Quick
© Ana G. Méndez University System, 2012. All rights reserved.
Response and/or Differentiation)
17
Goods and
Services Selection
18
© Ana G. Méndez University System, 2012. All rights reserved.
 The goods or services the organization
provides society
 Top organizations typically focus on
core products
 Customers buy satisfaction, not just a
physical good or particular service
 Fundamental to an organization's
strategy with implications throughout
the operations function
19
© Ana G. Méndez University System, 2012. All rights reserved.
 Differentiation
 Shouldice Hospital
 Low cost
 Taco Bell
 Rapid response
 Toyota
20
© Ana G. Méndez University System, 2012. All rights reserved.
Sales, cost, and cash flow
Cost of development and production
Sales revenue
Net revenue (profit)
Cash
flow
Negative
cash flow
Introduction
Loss
Growth
Maturity
Decline
21
© Ana G. Méndez University System, 2012. All rights reserved.
OM Strategy/Issues
Introduction
Growth
Maturity
Product design
and development
critical
Forecasting critical Standardization
Frequent product
and process
design changes
Competitive
product
improvements and
options
Short production
runs
High production
costs
Limited models
Attention to
quality
Product and
process reliability
Increase capacity
Shift toward
product focus
Enhance
distribution
Less rapid product
changes – more
minor changes
Optimum capacity
Increasing stability
of process
Decline
Little product
differentiation
Cost
minimization
Overcapacity
in the industry
Long production
runs
Prune line to
eliminate items
not returning
good margin
Product
improvement and
cost cutting
Reduce
capacity
22
© Ana G. Méndez University System, 2012. All rights reserved.
Introduction
 Fine tuning may warrant
unusual expenses for
 Research
 Product development
 Process modification
and enhancement
 Supplier development
Growth
 Product design begins to
stabilize
 Effective forecasting of
capacity becomes
necessary
 Adding or enhancing
capacity may be
necessary
23
© Ana G. Méndez University System, 2012. All rights reserved.
Maturity
 Competitors now
established
 High volume,
innovative
production may be
needed
Decline
 Unless product
makes a special
contribution to
the organization,
must plan to
terminate offering
 Improved cost
control, reduction in
options, paring down
of product line
24
© Ana G. Méndez University System, 2012. All rights reserved.
1. Understanding the
customer’s needs
2. Economic change
3. Sociological and
demographic change
4. Technological change
5. Political/legal change
6. Market practice, professional standards,
suppliers, distributors
25
© Ana G. Méndez University System, 2012. All rights reserved.
Ideas
Ability
Customer Requirements
Functional Specifications
Scope of
product
development
team
Product Specifications
Design Review
Scope for
design and
engineering
teams
Test Market
Introduction
Evaluation
26
© Ana G. Méndez University System, 2012. All rights reserved.




Robust design
Modular design
Computer-aided design (CAD)
Computer-aided manufacturing
(CAM)
 Virtual reality technology
 Value analysis
 Environmentally friendly design
27
© Ana G. Méndez University System, 2012. All rights reserved.
 First definition is in terms of functions
 Rigorous specifications are developed
during the design phase
 Manufactured products will have an
engineering drawing
 Bill of material (BOM) lists the
components of a product
28
© Ana G. Méndez University System, 2012. All rights reserved.
 Service typically includes direct interaction with the
customer
 Increased opportunity for customization
 Reduced productivity
 Cost and quality are still determined at the design
stage
 Delay customization
 Modularization
 Reduce customer interaction, often through
automation
29
© Ana G. Méndez University System, 2012. All rights reserved.
(a) Customer participation in design such as
pre-arranged funeral services or cosmetic
surgery
(b) Customer participation in delivery
such as stress test for cardiac exam
or delivery of a baby
(c) Customer participation in design and delivery
such as counseling, college education, financial
management of personal affairs, or interior
decorating
30
© Ana G. Méndez University System, 2012. All rights reserved.
Activities
After completing this presentation,
please go to the Tasks to complete
the Workshop activities.
31
© Ana G. Méndez University System, 2012. All rights reserved.