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Operations Strategy & Competitiveness By: 杜腾飞腾飞 齐晓飞齐晓飞 Chapter outline 2 3 1 Operations strategy defined Operations competitive dimensions Productivity defined 4 The notion of trade-offs Operations strategy defined What is strategy ? l What is strategy by: Michael Porter lAt general managerments core is strategy: defining a companys position, making trade-offs, and forging fit among activities. Strategy renders choices about what not to do as important as choices about what to do. Indeed, setting limits is another function of leadership. Deciding which target group of customers, varieties, and needs the company should serve is fundamental to developing a strategy. Operations strategy defined What is operations strategy ? l Operations strategy is concerned with setting broad policies and plans for using the resources of the firm to best support the firms long-term competitive strategy. Operations strategy defined Differences between strategy and operations strategy Customer demandstrategy operations strategy Alignment Decisions Process, basic structure, production capacity Operations strategy defined Keys in operations strategy l Keys to success in operation strategy lie in identifying what priority choices are, in understanding the consequences of each choice, and in the trades- offs involved. Operations competitive dimensions uCost“make it Cheap” uProduct Quality and Reliability“make it Good” uDelivery Speed“make it Fast” uDelivery Reliability“make it cheap” uCoping with Changes in Demand“change its volume” uFlexibility and New Product Introduction Speed“change it” uOther product-specific criteria“Support it” Operations competitive dimensions Other product-specific criteria“Support it” uTechnical liaison and support u Meeting a launch date u Supplier after-sale support u Other priorities The notion of trade-offs During the late 1960s and 1970s, central to the concept of operations strategy was the notion of operations focus and trade-offs. An operation could not excel simultaneously on all performance measures. (cant do every thing well) Operations focus and trade-offs The notion of trade-offs Plant-within-a-plant (PWP) C. Wickham Skinner. “The Focused Factory.” For those firms with large existing manufacturing facilities, Skinner even suggested the creation of a PWP concept, in which different locations within the facilities would be allocated to different products lines, each with their own operations strategy.The workers also would be separated. The notion of trade-offs Dealing with Trade-offs Cost Quality DeliveryFlexibility Advanced Approaches World Clss Manufacturing Trade-offs FOCUS1FOCUS2 FOCUS4FOCUS3 Plant within a Plant (PWP) Productivity defined What is productivity ? u Productivity is a common measure of how well a country , industry, or business unit is using its resources (or factors of production). u Productivity=Outputs/Inputs Productivity defined Productivity comparisons can be made in two ways: u First, compare itself with similar operations within its industry, or it can use industry data when such data are available. u Another , measure productivity over time within the same operation. Productivity defined u Productivity comparisons can be expressed in

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