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PRODUCTION AND OPERATIONS MANAGEMENT

PRODUCTION AND OPERATIONS MANAGEMENT. Ch. 2: Operations Strategy for Competitive Advantage. Alignment. Core Competencies. Decisions. Operations Strategy. Customer Needs. Corporate Strategy. Operations Strategy. Processes, Infrastructure, and Capabilities. Operations Priorities. Cost

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PRODUCTION AND OPERATIONS MANAGEMENT

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  1. PRODUCTION AND OPERATIONS MANAGEMENT Ch. 2: Operations Strategy for Competitive Advantage POM - J. Galván

  2. Alignment Core Competencies Decisions Operations Strategy Customer Needs Corporate Strategy Operations Strategy Processes, Infrastructure, and Capabilities POM - J. Galván

  3. Operations Priorities • Cost • Quality • Delivery Flexibility • Delivery Speed • Delivery Reliability • Coping with Changes in Demand • Flexibility and New Product Introduction Speed • Other Product-Specific Criteria POM - J. Galván

  4. Cost Flexibility Delivery Quality World Class Manufacturing FOCUS FOCUS Advanced Approaches FOCUS FOCUS Trade-offs Dealing with Trade-offs Traditional Approach Plant within a Plant (PWP) POM - J. Galván

  5. World-Class Manufacturing • World-class manufacturers no longer view cost, quality, speed of delivery, and even flexibility as tradeoffs. • They have become order qualifiers. • What are the order winners in today’s market? POM - J. Galván

  6. Service Breakthroughs • Service can be an “order winner” Travel Planning Warranty Leases Roadside Assistance Loaner Vehicles POM - J. Galván

  7. Customer Needs Strategic Vision New and Current Products Performance Priorities and Requirements Quality, Dependability, Speed, Flexibility, and Price Enterprise Capabilities Operations & Supplier Capabilities Technology Systems People R&D CIM JIT TQM Distribution Support Platforms Financial Management Human Resource Management Information Management A Framework for Manufacturing Strategy POM - J. Galván 8

  8. Differentiation Strategy Begins with Priorities Consider the case of a personal computer manufacturer. • How would we segment the market according to product group? • How would we identify product requirements, demand patterns, and profit margins for each group? • How do we identify order winner and order qualifiers for each group? • How do we convert order winners into specific performance requirements? Competition (Them) Us (Core competencies) POM - J. Galván

  9. Manufacturing’s Role in Corporate Strategy • Stage 1--Internally Neutral • Minimize manufacturing’s negative potential • Management control systems • Stage II--Externally Neutral • Achieve parity with competitors • Follow industry practice • Stage III--Internally Supportive • Support the business strategy • Stage IV-- Externally Supportive • Manufacturing-based competitive advantage POM - J. Galván

  10. Four Stages of Service Firm Competitiveness • Stage I. Available for Service • Reactive, non-performance-based survival • Stage II. Journeyman • Firm neither sought nor avoided • Reliable but uninspired operation • Stage III. Distinctive Competence Achieved • Reputation for meeting customers’ expectations • Customer-focused operations--management support • Stage IV. World Class Service Delivery • Firm name synonymous with service excellence--focus on delighting rather than satisfying customers • Continuous learning and improvement of operations POM - J. Galván

  11. MIT Commission on Industrial Productivity1985 Recommendations • Place less emphasis on short-term financial payoffs and invest more in R&D. • Revise corporate strategies to include responses to foreign competition. • greater investment in people and equipment • Knock down communication barriers within organizations and recognize mutuality of interests with other companies and suppliers. • Recognize that the labor force is a resource to be nurtured, not just a cost to be avoided. • Get back to basics in managing production operations. • Build in quality at the design stage. • Place more emphasis on process innovations rather than focusing sole attention on product innovations. POM - J. Galván

  12. U. S. Competitiveness Drivers • Product Development • Teams speed development and enhance manufacturability • Waste Reduction (JIT Philosophy) • WIP, space, tool costs, and human effort • Improved Customer-Supplier Relationships • Borrowed from Japanese Keiretsu • Improved Leadership • Strong, independent boards of directors POM - J. Galván

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