OPERATIONS MANAGEMENT

COMPETITIVENESS,
STRATEGY AND
PRODUCTIVITY
Prepared by: Najmah O. H. Nor
COMPETITI
VENESS
COMPETITIVENES
How effectively an organization meets the wants
and needs of customers relative to others that
offer similar goods or services.

Companies must be competitive to sell their

goods and services In the market place .
Marketing influences competition in several ways:

Identifying consumer wants and/ or needs

Pricing
Advertising
 Operation influences competition in several ways:

☺ Product and service design

☺ Cost
☺ Location
☺ Quality
☺ Quick response
☺ Flexibility
☺ Inventory management
☺ Supply chain management
☺ Service
 Product and service design

Should reflect joint efforts of many areas of the firm to

achieve a match between financial resources , operation,
capabalities, supply chain capabalities, and consumer
needs and wants.
 Cost

Is a key variable that affects pricing decisions and

profits. Productivity is an important determinant of cost.
Organizations with higher productivity rates that their
competitors have a competitive advantage.
 Location

Can be important in terms of cost and convenience for

customers. Location near inputs result in lower input
costs. Locations near markets can result in lower
transporation costs and quicker delivery times.
 Quality

Refers to materials, workmanship, design and service.

Consumers judge quality of how well they think a
product or service will satisfy its intended purpose.
 Quick response
Can be a source of competitive advantage by quickly
bringing new improved products or services to the
market or delivering existing products or services to the
customer after they are ordered.
 Flexibility

Is the ability to respond to changes. Changes might

relate to alteration in design features of a product or a
services or to the volume demanded by customers or the
mix of products or services offered by an organization.
 Inventory management

Can be a competitive advantage by effectively matching

supplies of goods with demand.
 Supply chain management

Involves coordinating internal and external operations

to achieve timely and cost effective delivery of goods
throughtout the system.
 Service

Might involve after-sales activities that customers may

perceive as value added such as delivery, set-up,
warranty and technical support.
STRATE
GY
 Strategies are plans for achieving
organizational goals. They can be long term,
intermediate term or short term.

 Strategies must be designed to support the

organization’s mission and organizational goals
.
Mission and Goals

Mission: the reason for the existence of an

organization.
Mission Statement: states the purpose of an
organization.
Goals: provide detail and scope of the
mission.
Strategies: Plans for achieving organizational
golas.
Example:

Hafsah is High school student in MSU ILS. She

would like to have a career in business, have a good
job, and earn enough income to live comfortably. A
possible scenario for achieving her goals might look
like this
 Strategy formulation must take into account the
distinctive competencies of the organization and
scan of the environment.

In formulation a successful strategy

organizations must take into account into order
qualifiers and order winners.
 Environmental scanning

External factors: Internal factors:

Economic  Human resources
Political  Facilities and equipment
 Financial resources
Legal  Customers
Technology  Products and services
Competition  Technology
 Suppliers
Markets
 Quality and time strategies

Quality based strategies focus on maintaining or

improving quality in all phases of an organizations.

Time based strategies focus on reducing the time

required to accomplish tasks.
PRODUCTI
VITY
 Productivity a measure of the effectiveness use of
resources, usually expressed as the ratio of output to input.
It is usually expressed as the ratio of output to input.

Outputs
Productivity =
Inputs
Factors that affect productivity

Capital Quality

Technology Management
 Factors that affect productivity

Standardization
Quality difference
Use of internet
Computer viruses
Searching for lost and
misplaced items
New workers
Safety
Shortage of IT workers
layoffs
Labor turn over
Design of the workspace
Incentive plans that
reward productivity
 Improving productivity

Develop productivity measures

Determine critical (bottleneck) operations
Develop methods for productivity improvements
Establish reasonable goals
Get management support
Measure and publicize improvements
Don’t confuse productivity with efficiency
Thank
you!