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Operations Management Dr. Yehualashet Demeke: Competitiveness, Strategy, and Productivity
Operations Management Dr. Yehualashet Demeke: Competitiveness, Strategy, and Productivity
Competitiveness
Strategy
Productivity
Product
and service design
innovation and the time-to-market for new products and services.
Cost of an organization’s output is a key variable that affects
pricing decisions and profit
Productivity (discussed later in the chapter) is an important
determinant of cost.
Location can be important in terms of cost and convenience for
customers.
Quality refers to materials, workmanship, design, and service.
product.
Considerable interaction with the customers
may be required to determine what that means.
Consistent Quality: Providing services or
products that meet design specifications on a
consistent basis.
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Time as a Competitive Capability
Delivery Speed is quickly filling a customer’s
order.
Lead Time is the time between receipt of an
order and filling the order.
On-Time Delivery means meeting the delivery
time promises.
Development Speed is quickly introducing a new
service or product.
Time-Based Competition is a strategy that
focuses on development speed and delivery
speed.
Operations As a Competitive
Weapon
Operations Strategy Process Strategy
Project Management Process Analysis
Process Performance and QualitySupply Chain Strategy
Constraint Management Location
Process Layout Inventory Management
Lean Systems Forecasting
Sales and Operations
Planning
Resource Planning
Scheduling
Differentiation: Innovation 3M
Newness Apple
Decisions on Processes
Build New
and Infrastructure
Factory
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Service or Product Development
Strategies
Product Variety: Offering a wide assortment.
Design: Ease of use and desirable features.
Innovation: Translate new technology into new
products.
Service: Products with services added.
Leader: Being first to introduce new services and/or
products.
Middle of the Road: Wait for the leaders to
introduce new services and/or products.
Laggard: Wait to see if the leader’s new services
and/or products catch on in the market.
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Service Package
A Service Package is a collection of goods and
services provided by a service process to its
customers. It consists of four features:
1. Supporting Facility: The physical resources
that must be in place before a service can be
offered.
2. Facilitating Goods: The materials purchased
or consumed by the customer or the items
provided by the customer to receive a service.
3. Explicit Services: The readily observable
benefits.
4. Implicit Services: Psychological benefits.
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Quality Function Deployment (QDF)
Quality Function Deployment (QDF) is a means of
translating customer requirements into the
appropriate technical requirements for service or
product development. Questions it seeks to answer
are:
1. What do our customers want?
2. How well are we doing relative to our
competition?
3. What technical measures relate to our
customers’ needs?
4. What are the relationships between what our
customers want and the technical measures?
5. How does our service or product performance
compare to the competition?
6. What are the potential technical trade-offs?
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Concurrent Engineering
Concurrent Engineering brings product
engineers, process engineers, marketers,
buyers, information specialists, quality
specialists, and suppliers together to design a
product and the processes that will meet
customer expectations.
This is an essential cross-functional effort
during the service and/or product
development phase to insure a timely and
well-coordinated process that brings value to
the customer.
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Strategic Options to Gain a
Competitive Advantage
28% - Operations Management
18% - Marketing/distribution
16% - Quality/service
4% - Financial resources
3% - Other
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Elements of Operations Management
Strategy
Low-cost product
Product-line breadth
Technical superiority
Product characteristics/differentiation
Continuing product innovation
Low-price/high-value offerings
Efficient, flexible operations adaptable to
consumers
Engineering research development
Location
Scheduling
Labor + material
Capital Quality
Technology Management
Questions/
Queries?