Chapter 2 – Competitiveness

1. Chapter 2 – Competitiveness Competitiveness, Strategy, and Productivity SJSU Bus 140 - David Bentley

2. Productivity - Macro • Macro vs. micro (U.S. vs. Joe Smith) • U.S. productivity – high or low? – Why? - Growing? • Q102: +8.6%; Q202: +1.1% • Value-added/hour (source: ILO 2001) • France $33.71 • Belgium $32.98 • United States $32.84 SJSU Bus 140 - David Bentley

3. Business Productivity - Quarterly Change (Source: data.bls.gov) SJSU Bus 140 - David Bentley

4. Manufacturing Productivity - Quarterly Change (Source: data.bls.gov) SJSU Bus 140 - David Bentley

5. Nonfarm Productivity - Quarterly Change (Source: data.bls.gov) SJSU Bus 140 - David Bentley

6. Productivity - TFP • Total Factor Productivity (TFP) • Incorporates technological progress, management techniques, smart work • Developed by Robert Solow (MIT) • Won Nobel Prize for Economics in 1987 • TFP observations • McKesson productivity gain (2000-2001) • 3.9% - (0.4 x 2.0%) = 3.1% • Top 8 companies in energy industry • Source USATODAY.com 7/29/02 SJSU Bus 140 - David Bentley

7. Who Works the Most? • Comparative figures (source: ILO 2001) hours/year • Germany 1478 • United Kingdom 1728 • Japan 1878 • United States 1978 SJSU Bus 140 - David Bentley

8. Productivity - Micro • Productivity = Output / Input • Single factor productivity • Usually labor productivityinput • See Ex. 2 • Multi-factor productivity • Usually labor, material and overhead productivityinputs • See Ex. 3 SJSU Bus 140 - David Bentley

9. What is a customer? • Richard Schonberger: “The customer is the next process” • Final Customer vs. next customer • The Big “C” vs. the little “c” • Who is/are my customer(s)? • Who is/are your customer(s)? SJSU Bus 140 - David Bentley

10. Total Customer Experience • “I believe that HP owes our customers a superior Total Customer Experience (TCE) when dealing with us, and I am personally committed to improving TCE and making it a competitive differentiator for HP.” • Carly Fiorina • Former President and CEO, Hewlett-Packard SJSU Bus 140 - David Bentley

11. Total Customer Experience • Customers are our most important assets • Customers always define their own desired experience • Need to be close enough to anticipate their needs and flexible enough to meet them • Important to develop deeper relationships with end users • Carly Fiorina SJSU Bus 140 - David Bentley

12. Making a TCE SJSU Bus 140 - David Bentley

13. What Do Customers Want? • _________ ____________ • _________ ____________ • _________ ____________ • _________ ____________ • _________ ____________ • _________ ____________ SJSU Bus 140 - David Bentley

14. Principles of Operations Mgmt. • Richard Schonberger • 15 principles grouped into 7 categories • Customers • Company • Competitors • Design and organization • Capacity • Processing • Problem solving and control • See Word document on the website SJSU Bus 140 - David Bentley

15. Principles of OM (Schonberger) • Customers • Know and team up with next and final customer • Continual, rapid improvement in customers “wants” SJSU Bus 140 - David Bentley

16. Principles of OM (Schonberger) • Company • Unify purpose through shared information and team involvement SJSU Bus 140 - David Bentley

17. Principles of OM (Schonberger) • Competitors • Know the competition and world-class leaders. SJSU Bus 140 - David Bentley

18. Principles of OM (Schonberger) • Design and Organization • Cut the number of components, operations, and suppliers • Organize resources into multiple, focused “chains of customers” SJSU Bus 140 - David Bentley

19. Principles of OM (Schonberger) • Capacity • Invest in cross-training, education, job rotation, and improved health, safety and security • Improve present equipment and human work before buying new equipment or automating • Use simple, flexible, low-cost equipment SJSU Bus 140 - David Bentley

20. Principles of OM (Schonberger) • Processing • Make it easy to make products without error or variation • Cut flow time, distance, inventory • Cut setup and changeover times • Operate at the customer’s rate of use. SJSU Bus 140 - David Bentley

21. Principles of OM (Schonberger) • Problem solving and control • Record and own data at the workplace; give front-line workers first chance to solve problems • Cut transactions and reporting; control causes, not symptoms SJSU Bus 140 - David Bentley

22. Strategy Foundation • Mission: What are we in business for? • Vision: Where do we see ourselves n years from now? • Objectives: broad statements about fields of interest, customers, employees, community, R&D, profit, etc. • Goals: quantitative measures for a time period SJSU Bus 140 - David Bentley

23. Strategy • Strategy: plans for achieving goals • Organizational vs. functional strategies • Creating a strategy • SWOT analysis • Distinctive competencies • Quality and time based strategies SJSU Bus 140 - David Bentley

24. Tactics and Operations • Tactics: methods and actions for implementing strategy • Operations: specific tasks or activities based on strategy and tactics SJSU Bus 140 - David Bentley

25. Mission Examples • College of Business • “The SJSU College of Business is the institution of opportunity providing innovative business education and applied research for the Silicon Valley • Alzheimer’s Association • “Creating a world without Alzheimer’s disease and enhancing quality of life for those who live with it.” SJSU Bus 140 - David Bentley

26. Example Planning a trip to Paris SJSU Bus 140 - David Bentley

27. Mission Statement The mission is to make travel arrangements, learn a sufficient amount of information about Paris, and gain sufficient knowledge of French grammar, vocabulary, and pronunciation in order to comfortably travel in and about Paris on a brief visit. SJSU Bus 140 - David Bentley

28. Vision Statement I am confident in guiding my family in and around Paris. We have made all necessary travel arrangements in advance. I know the sites and events that we want to see and lead my family effortlessly. I am familiar with transportation modes and easily make any reservations and buy tickets. I communicate adequately with French people with whom we come in contact, including hotels and restaurant personnel, transportation personnel, police, ticket sellers, and average French citizens. SJSU Bus 140 - David Bentley

29. Objectives • Make travel reservations in advance • Determine sites to see and any events to attend • Learn conversational French • Document plans and schedules SJSU Bus 140 - David Bentley

30. Goals • Make reservations by March 1 • Lay out sightseeing itinerary by May 1 • Complete French conversational training by May 15 • Review all plans, schedules and arrangements by 5/20 SJSU Bus 140 - David Bentley

31. Strategy • Select a tour • Study guidebook(s) on Paris and environs • Study basic French language vocabulary • Take conversational French course at local school • Prepare file to document plans SJSU Bus 140 - David Bentley

32. Tactics - 1 • Tour • Contact a travel agency (Westmoor) • Review various tours available • Select tour based on dates and itinerary • Fill out paperwork and pay deposit • Make air reservations and pay for tickets SJSU Bus 140 - David Bentley

33. Tactics - 2 • Guidebooks • Select guidebook (Fodor’s @ Crown Books) • Skim book • Read selected sections carefully • Make notes on: • places to see, things to do, customs • transportation • restaurants • maps and currency SJSU Bus 140 - David Bentley

34. Tactics - 3 • French vocabulary • Seek available Conversational French course (FUHSD) • Book time in personal schedule • Enroll in course • Buy text (Just Listen ‘n Learn French) • Attend class • Perform all assignments SJSU Bus 140 - David Bentley

35. Tactics - 4 • Documentation • Prepare file folder for material and find space in file cabinet • Create Word document for information • Copy and file material to be referenced • Maintain Word file SJSU Bus 140 - David Bentley

36. Operations • All the activities and tasks supporting the tactics, strategy, goals, objective, vision and mission involving the visit to Paris SJSU Bus 140 - David Bentley