Terry Hill Strategy

Framework
Customer evaluations of goods and services
• Search attributes are those that a customer can determine
prior to purchasing the goods and/or services.
• Experience attributes are those that can only be discerned
after purchase or during consumption or use.
• Credence attributes are any aspects of a good or service
that the customer must believe in, but cannot personally
evaluate even after purchase and consumption.
• Professor Terry Hill’s Strategy Development Framework

• Operations design choices are the decisions management must

make as to what type of process structure is best suited to produce
goods or create services.
 Types of processes and alternative designs
 Supply chain integration and outsourcing
 Technology
 Capacity and Facilities (size, timing, location)
 Inventory
 Trade-off Analysis
• Professor Terry Hill’s Strategy Development Framework

• Infrastructure focuses on the non-process features and capabilities

of the organization and includes the
 workforce,
 operating plans and control systems,
 quality control,
 organizational structure,
 compensation systems,
 learning and innovation systems, and
 support services.
A QUICK RECAP OF PROCESS ANALYSIS
• An inspection station for assembling toys inspects 40 toys/hour. There
are two inspectors who can inspect 30 toys per hour. (a.) What is the
utilization of the inspectors? (b.) To have a target utilization of 85%,
what should be the service rate (SR) of inspectors?
a. Utilization = 40/(2x30)=66.66%
b. 0.85=40/(2xSR) Therefore, SR = 40/(2x0.85) = 23.5 toys/hr
• A restaurant makes 400 pizzas/week, each of which uses half pound
of dough. An inventory of 70 pounds of dough is typically maintained
at the restaurant. What is the average flow time?
R = 400 pizzas/hr = 200 pounds of dough/week
T = I/R = 70/200 = 0.35 weeks (Applying Little’s Law)