Exam Answers

Order winners and qualifiers

Order Qualifiers and Winners Defined Order qualifiers are the basic criteria that permit the firms products to be considered as candidates for purchase by customers Order winners are the criteria that differentiate the products and services of one firm from another
LO 3

Order Qualifiers and Winners

For autos product quality is now an order qualifier order winners for autos vary greatly by the bundle of features desired In general criteria such as cost or specific features or capabilities could be order winners or qualifiers

LO 3

Order Winners and Order Qualifiers

These are criteria used by customers in service or product selection. Order Winners are criteria for differentiating services or products of one firm from those of another. Price, quality, time, flexibility, after sales support, reputation, etc. Order Qualifiers are demonstrated levels of performance required to do business in a particular market segment.

Order winners and qualifiers

Positive

Competitive Benefit

Order Winners

Neutral
Qualifiers

Negative Low

Achieved Performance

High

Adding Delights

Positive

Delights

Competitive Benefit

Order Winners

Neutral
Qualifiers

Negative Low

Achieved Performance

High

Delights become order winners and order winners become qualifiers

Positive

Delights

Competitive Benefit

Order Winners

Neutral
Qualifiers

Negative Low

Achieved Performance

High

What service dimensions are delight, order winners and qualifiers now, and in the future?
Today Tomorrow

Delights

Order Winners

Qualifiers

Budget Hotel Chain

Today Tomorrow

Delights

Central reservation

Order Winners
Location (autoroutes) Location (restaurants) Price Loyalty cards

Central reservation Location (autoroutes)

Qualifiers

Cleanliness Dcor Service

Location (restaurants) Price Loyalty cards Cleanliness Dcor

Budget Hotel Chain

Today Tomorrow

Delights

Central reservation

Price

Order Winners
Location (autoroutes) Location (restaurants) Price Loyalty cards

Central reservation Location (autoroutes) Location (restaurants)

Qualifiers

Cleanliness Dcor Service

Location (restaurants) Price Loyalty cards Cleanliness Dcor

Budget Hotel Chain

What aspects of service will form tomorrows delights, order winners and qualifiers? What new capabilities will operations need to develop to deliver these? Cheap land costs Build at low cost Search processes Flexible design Low fixed costs Standardization

Delights

Price

Operate at lowLow overheads Low labor costs cost New technology

Order Winners

Central reservation Location (autoroutes) Location (restaurants)

More, smaller sites Partnership deals with restaurants

Qualifiers
Location (restaurants) Price Loyalty cards Cleanliness Decor

Trade-offs

Do you want it good, or do you want it Tuesday?

No such thing as a free lunch. You cant have an aircraft which flies at the speed of sound, carries 400 passengers and lands on an aircraft carrier. Operations are just the same. (Skinner)

Trade-offs in operations are the way we are willing to sacrifice one performance objective to achieve excellence in another.

Order Winners and Order Qualifiers

Order Qualifier: The level of a product characteristic(s) that allow a product to be considered for selection Order Winner: The level of a product characteristic(s) that drive the customer decision to select a product Order winners/qualifiers are dynamic
Changes as customer requirements change Changes as competitive products change
MAN 3504 - Chapter 2 14

Order Winners and Order Qualifiers

Order winners become drivers for operations strategy
COST Operations Efficiency QUALOITY/RELIABILITY Quality at Design/Zero Defects VARIETY/CUSTOMIZATION Recognition of customer needs SPEED OF SERVICE/DELIVERY Supply Chain Coordination

Focused Operations - few order winning characteristics Operations as a driver for corporate strategy

MAN 3504 - Chapter 2

15

Operations Strategy: Services vs. Manufacturing

Operational Strategies differ in implementation
Cost Strategy: Cost may be reduced in materials or manufacturing locations versus in services is based on process standardization and the level of resources

Manufacturing: tangible product, versus Service: it falls on your foot and it does not hurt Difficult to differentiate between services and products as products are bundled with services

MAN 3504 - Chapter 2

16

Operations Strategy: Product Life Cycles

The life cycle of a product has an effect on the operations strategy
Birth Stage: Product Design Growth Stage: Capacity Management Mature Stage: Increasing Efficiency and Quality Decline Stage: Cost minimization and resource relocation

MAN 3504 - Chapter 2

17

Product Design/ Redesign Process

marketing Determine Customer Requirements Product Design engineering design Idea Generation/Solutions is critical Initial Design/Prototypes Must match critical customer Design Review requirements Complete Functional Specifications Design Steps production/ Initial Production and Market Test manufacturing/ supply chain/ quality Full Production

MAN 3504 - Chapter 2

18

Hayes Wheelright Matrix

Strategic Decisions in Operations

Services Products Human Resources Process and Technology

Capacity

Quality

Facilities

Sourcing

Operating Systems

Copyright 2006 John Wiley & Sons, Inc.

2-20

Operations Strategy: Products and Services

Make-to-Order
products and services are made to customer specifications after an order has been received

Make-to-Stock
products and services are made in anticipation of demand

Assemble-to-Order
products and services add options according to customer specifications

Copyright 2006 John Wiley & Sons, Inc.

2-21

Production Strategy: Processes and technology

Project
one-at-a-time production of a product to customer order

Batch Production
systems process many different jobs at the same time in groups (or batches)

Mass Production
large volumes of a standard product for a mass market

Continuous Production
used for very high volume commodity products

Copyright 2006 John Wiley & Sons, Inc.

2-22

Product-Process Matrix

Source: Adapted from Robert Hayes and Steven Wheelwright, Restoring the Competitive Edge: Competing Through Manufacturing (New York: John Wiley & Sons, 1984), p. 209

Copyright 2006 John Wiley & Sons, Inc.

2-23

Continuous Production
A paper manufacturer produces a continuous sheet paper from wood pulp slurry, which is mixed, pressed, dried, and wound onto reels.

Mass Production
Here in a clean room a worker performs quality checks on a computer assembly line.

Batch Production
At Martin Guitars bindings on the guitar frame are installed by hand and are wrapped with a cloth webbing until glue is dried.

Project
Construction of the aircraft carrier USS Nimitz was a huge project that took almost 10 years to complete.

Copyright 2006 John Wiley & Sons, Inc.

2-24

Service Strategy: Processes and Technology

Professional Service
highly customized and very labor intensive

Service Shop
customized and labor intensive

Mass Service
less customized and less labor intensive

Service Factory
least customized and least labor intensive

Copyright 2006 John Wiley & Sons, Inc.

2-25

Service-Process Matrix

Source: Adapted from Roger Schmenner, How Can Service Businesses Survive and Prosper? Sloan Management Review 27(3):29

Copyright 2006 John Wiley & Sons, Inc.

2-26

Service Factory
Electricity is a commodity available continuously to customers.

Mass Service
A retail store provides a standard array of products from which customers may choose.

Service Shop
Although a lecture may be prepared in advance, its delivery is affected by students in each class.

Professional Service
A doctor provides personal service to each patient based on extensive training in medicine.
Copyright 2006 John Wiley & Sons, Inc. 2-27