Chapter 2

1. Chapter 2 Environments and Strategies

2. Language and social customs Transportation Exchange rates Inflation Regulations and laws Tariffs Political and economic stability Location of potential suppliers Location of current and potential customers Availability of suitable workforce Cost of labor and materials Weather climate Improvements in technology have led to more companies operating globallyIssues that affect global operations:

3. Joint ventures and strategic alliances Production sharing Maquiladora plants Automobile plants: • Nissan pickup truck made in Smyrna, TN • Is it American or Japanese? • Japanese vs. Chinese production system design • Nissan sedan in Tokyo vs. Beijing Jeep

4. Environmental Issues in Business How are functional areas affected by environmental issues? • Accounting/Finance • Information Systems (MIS) • Human Resources (HR) • Marketing/Sales/Distribution • Engineering • Operations/Manufacturing

5. Negative Impacts of Environmental Issues(from company’s perspective) • Government regulations • Cost of paperwork • Cost of monitoring • Cost of complying • Consumer/public perceptions • Negative publicity • Cost of cleanup and disposal • Hazardous/toxic waste • Liability costs

6. Positive Opportunities • Recycling can save money • Conserving energy saves money • Redesign products to use environmentally safer materials • Redesign processes to be environmentally safer • Public awareness campaign

7. ISO 14000 • ISO 14000 is a management standard, it is not a performance or product standard • The underlying purpose of ISO 14000 is that companies will improve their environmental performance • Companies can become ISO 14000 certified by demonstrating that environmental management processes are in place • Certification is done by sanctioned third-party consultants

8. ISO 14000 A group of environmental management standards covering these areas: • Environmental Management Systems • Environmental Auditing • Evaluation of Environmental Performance • Environmental Labeling • Life-Cycle Assessment

9. RECYCLING NOTES Every year we try to produce a Far Side Off-The-Wall Calendar that you can enjoy each day with the knowledge that it will be as harmless as possible to the earth for years to come. Every calendar component is wholly or partially made from recycled products with the exception of the adhesives. All materials are recyclable. We’ve replaced last year’s cardboard backer with one that is now manufactured from 100% postconsumer plastic waste. It displays the PETE #1 symbol and can be recycled right along with other household plastic waste, such as two-liter soft drink bottles. The box is made from 100% postconsumer content fiber. The box and the board that backs the calendar pages can be recycled as is with other cardboard waste. All the inks used on the carton and calendar contain various amounts of soya oil – a renewable resource – replacing some of the petroleum products normally used. The inks exclude the use of heavy metals in their formulation. The black ink used on the calendar pages is a fully recycled ink.

10. A Note About Our Packing Material Dear Customer: Based on our commitment to the environment and you, our valued customer, we are now using packing peanuts made of cornstarch based materials that break down in water. No plastic or polluting gases are used to make these peanuts. Please reuse them in your own packaging or dissolve them on your lawn by spraying them with cold water. They’ll dissolve in a couple of minutes and because they are made from natural products, they are entirely safe. We hope our environmentally-safe packaging meets with your enthusiastic approval. Your comments are always appreciated. Please write to: Crate and Barrel, 725 Landwehr Road, Northbrook, Illinois 60062 Attn: Purchasing Department. Thank you for shopping with Crate and Barrel. Printed on recycled paper

11. Business Strategy Plan for how business will compete to be profitable Competitive priorities • cost (low cost, good value) • time (fast response, short lead times) • quality • flexibility (wide range of products, custom orders, fast product changeovers)

12. Operations Strategy Plans for how operations will provide goods and services to support the business strategy What type of products and services? • standardized • customized • product mix diversity What type processes? • streamlined for one product (assembly line) • designed for product flexibility (job shop)

13. Operations Strategy What technologies and degree of automation? How much to outsource? What type facilities? (capacity, location, layout) How to allocate operations resources?

14. Operations Strategy Guides Many Decisions You’ve decided you’re going to open a restaurant and now have many decisions to make. Where should it be? (location) Layout of floor plan? (layout) How much storage areas are needed? (layout) How large of a building? (capacity) How much parking? (capacity) How many tables/booths? (capacity) Days and hours of operation? (capacity) How many employees? (capacity) What food items to offer on the menu? (product design) Have a drive through window? (process/capacity)

15. How much and what foods can be prepared ahead of time? (process/forecasting/capacity) What type equipment? (process) Order at counter or use waiters? (process) Self service drinks? (process) Take out service? (process) Delivery service? (process) Pay before or after eating? (process) Customer pays waiter or pays at cash register? (process) Full time or part time employees? (production planning) Should overtime be allowed? (production planning)

16. Should some foods be purchased already prepared? (production planning) How much food and supplies to order and how often? (inventory) How to schedule employees? (scheduling/forecasting) Accept reservations? (scheduling) Food handling and preparation policies? (quality control) How can quality of food and service be monitored? (quality control) Which suppliers to use? (purchasing) Who cleans up? (maintenance)