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COMPETITIVENESS
Competitiveness Defined
 It is How effectively (the extent that) an organization
meets the wants and needs of customers relative to
others that offer similar goods or services

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 Companies must be competitive to sell their
goods and services in the market place.

A few basic operations priorities include:

1. Cost:-, low-cost producer.
2. Product ;-quality-conformance for the
purpose
3. Delivery speed (time)
4. Flexibility: - ability to respond to
changes.
5. New product introduction speed etc.
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Operations Strategy
Operations strategy is concerned with
 Setting broad policies and
 Setting plans for using the resources of the firm
to best support the firm’s long-term competitive
strategy.

Strategies: - are plans for achieving goals.

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Organizations compete through some combination of;

A. Their marketing (What do customers want?

B. Their operations functions(How can these customer

needs best be satisfied?)

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A. MARKETING INFLUENCES COMPETITIVENESS BY:

Identifiying consumer needs and desires

Pricing
Advertising and promotion

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B. OPERATIONS INFLUENCES COMPETITIVENESS THROUGH :

1. Product and Service Design

2. Cost
3. Location
4. Quality and Reliability
5. Quick or Reliable Response
a. New Product Introduction Speed
b. Delivery Speed
c. Delivery Reliability
6. Service
OPERATIONS INFLUENCES---
7. Flexibility
a. in making alterations in design
b. in coping with changes in volume
c. in new product introduction
8. Inventory Management
9. Supply Chain Management
10. Service and Service Quality
11. Managers and Workers

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 WHY SOME ORGANIZATIONS FAIL?
Some Organizations Fails because of :-
 Too much emphasis on short-term financial performance
 Failing to take advantage of strengths and opportunities
 Failing to recognize competitive threats
 Neglecting operations strategy
 Too much emphasis in product and service design and not
enough on improvement
 Neglecting investments in capital and human resources
 Failing to establish good internal communications and
cooperation
 Failing to consider customer wants and needs
OPERATIONS SYSTEM
 A manufacturing system is the process of arrangement and
operation of machines, tools, material, people and
information to produce a value-added physical, informational
or service product whose success and cost is characterized by
measurable parameters

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2. Types of Manufacturing System:
There are mainly two types of manufacturing system which is
depicted in following figure:

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2.1. Intermittent Manufacturing System:
Intermittent means something that starts and stops
at irregular intervals.

In this system goods are produced based on

customer’s orders

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2.2 Characteristics of Intermittent Production System:

i. The flow of production is not continuous.

ii. Wide varieties of products are produced.
iii.The volume of production is small.
iv.It utilizes general purpose machines.
v. The sequence of operation changing as per the design
vi.The quantity, size, shape, design etc. depends on the
customers orders.

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2.3. Types of Intermittent Production System:
The intermittent production system has three types
which are as under:
i. Project Production Flows,
ii. Job Shop Production System, and
iii. Batch Shop Production System.

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2.3.1. Project Production Flows:
A project process lies
High-customization,
Low volume end of the
Process is not continuous
Examples
 Building Shopping Center,
 Planning Major Event,
 Constructing New Hospital,
 Doing Management Consulting Work, Or
 Developing New Technology Or Product.
2.3.2. Job Shop Production System:
 Job shop production system are designed and produced as per
the specification of customers within prefixed time and cost.

Characteristics of Job Shop Production System:

i. It involves high variety of products and low volume.
ii. It utilizes general purpose machines and facilities.
iii. The operators are highly skilled
iv. It involves large inventory of materials, tools, parts
v. Detailed planning is essential for all activities.

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 2.3.3. Batch Shop Production System:
Is similar to a job shop, except that the sequence of
activities tends to be in a line and is less flexible.

2.3.3.1 Characteristics of Batch Production System:

i. Plant and machinery utilized are flexible.
ii. Plant and machinery set up is used for the production of
item in a batch
iii. Unit cost & lead time is lower compared to job shop
production system

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 3. Continuous Production System:
It operates constantly without any irregularities or frequent
halts.

3.1. Characteristics of Continuous Production System:

i. The flow of production is continuous. It is not intermittent.
ii. The standardized products are produced
iii. Produced on predetermined quality standards.
iv. The products are produced in anticipation of demand.

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3.2. Types of Continuous Production System:
The continuous production system has two types:

A.Mass Production System

B.Process Production System

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 3.2.1. Mass Production System:

 Mass production refers to that manufacturing

process in which large quantities of standardized
products are manufactured by using assemble line
technology.

 It refers to the process of creating large numbers of

similar products efficiently.

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 Characteristics of Mass Production System
Following are the main characteristics of mass
production system:
i.The product produced is standardized.
ii.The operator is able to do different kind of tasks
iii.Requires less time to produce a single product
iv.The probability of human error and variation is also
reduced
v.The labor cost is very low and the rate of production
is very high.

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4. Process Production System:
 Process manufacturing is the production of goods that are
typically produced in bulk quantities.

 Process manufacturing industries include chemicals, food

and beverage, gasoline, paint and pharmaceutical.

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HIERARCHICAL PLANNING

Mission

Goals

Organizational Strategies

Functional Strategies

Tactics
 MISSION
 Mission - where you are going?
 The reason for the existence for an organization
 Provides boundaries & focus
 GOALS

Goals can be viewed as organizational destinations

They serve as the basis for organizational strategies

STRATEGIES
A plan for achieving organizational goals
Serves as a roadmap for reaching the goal
i. Organizational (business) strategies
ii. Functional level strategies

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 TACTICS AND OPERATIONS
Tactics
The methods and actions taken to accomplish
strategies
The “how to” part of the process
 “How to reach the destination, following the strategy
road map”
Operations
The actual “doing” part of the process

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 CORE COMPETENCIES
 Is the special abilities that give an organization a competitive
edge
 What the firm does better than anyone else (critical
success factors, distinctive competencies)
 Price
 Quality
 Time
 Flexibility
 Service
 Location
To be effective :-
core competencies and
strategies need to be aligned
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 STRATEGY FORMULATION
Effective strategy formulation requires taking into
account:
Core competencies
Environmental scanning (SWOT)
Successful strategy formulation also requires
taking into account:
Order qualifiers
Order winners

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 ENVIRONMENTAL SCANNING

The consideration of events and trends that

present threats or opportunities for a company

Environmental Scanning is necessary to identify

Internal Factors
Strengths and Weaknesses
External Factors
Opportunities and Threats

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 ENVIRONMENTAL SCANNING:

KEY EXTERNAL FACTORS

 Economic conditions
 Political conditions
 Legal environment
 Technology
 Competition
 Customers and Markets
 Suppliers
 Distributors

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 ENVIRONMENTAL SCANNING:

KEY INTERNAL FACTORS

Resources available (human resources, facilities and
equipment, financial resources)
Existing and potential products and services
Stages of life cycles of current products

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 ORDER QUALIFIERS: DEFINED
Order qualifiers- are the basic criteria that permit the
firm’s products to be considered as candidates for
purchase by customers.

These are the characteristics that customers perceive as

minimum standards of acceptability to be considered as a
potential purchase.

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 ORDER WINNERS: DEFINED
Order winners are the criteria that differentiate the
products and services of the firm from others

These are the characteristics of an organization’s goods

or services that cause it to be perceived as better than
competitors’ products

 A brand name car can be an “order qualifier

 Repair services can be “order winners”
 Examples: Warranty, Roadside Assistance, Leases, etc
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 ORGANIZATION STRATEGY/
OPERATIONS STRATEGY
 Organization strategy- provides the overall
direction for the organization. It is broad in
scope covering the entire organization

 Operations strategy- is the approach consistent

with organization strategy that is used to guide
the operations function. It is narrower in scope,
dealing with the operations aspect of the
organization.
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Organization Relates to growth rate, market share
Strategy

Operations Relates to product design; choice of

Strategy location, technology, new facilities

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