Operations Management Chapter 2

how effectively an organization meets the wants and needs of customers relative to others
relates to the effective use of resources and it has a direct impact on competitiveness
how does the market influence competitiveness
identifying consumer wants and needs, price and quality, advertising and promotion
operations has a major influence on competitiveness through
product and service design, cost, location, quality, quick response, flexibility, inventory management, supply chain management, service, managers
why some organizations fail
neglecting operations strategy, failing to take advantage of strengths and apperations and or failing to recognize competitive threats, putting to much emphasis on short term financial performance at the expense of research and development, placing to much emphasis on product and service design and not enough on process design and improvement, neglecting investments in capital and human resources, failing to establish good internal communications and cooperation among different functional areas,
the key to successfully competing is to
determine what customers want and then directing efforts toward meeting or exceeding customer expectations
reason for existence of an organization
mission statement
states the purpose of an organization
provide detail and scope of mission
goals and missions normally _______ to how they want to be perceived by the general public
plans for achieving goals
3 basic business strategies
low cost, responsiveness, differentiation from competition
strategies provide _____ for decision making
operations need the most __________ and _________plans and decision making in an organization
specific, detailed
tacits are the _________ part of the process
how to
misson to operations is a _________ relationship
strategies an organization might choose form
low cost, scale, specialization, newness, flexible operations, high quality, service, sustainability
core competencies
special attributes or abilities that give an organization a competitive edge
the most effective organizations use an approach that
develops core competencies based on customer needs as well as on what the competition is doing
matching a competitor is usually ____________ to gain market share
not sufficient
to be effective, strategies and core competencies need to be ______
to formulate effective strategies mangers must take into account the core competencies of the organization and they must ______________
scan the environment
strengths, weaknesses, opportunities and threats
order qualifiers
minimum standards of acceptability for a product to be considered for purchase
order winners
characterizations of an organizations goods and services that cause it to be percieved as better than the competition
environmental scanning
monitoring of events and trends that present either threats or opportunities for the organization
competitive disadvantage
economic condition, political condition, legal environment, technology, competition, markets
internal factors
human resources, facilities and equipment, financial resources, customers, products and services, technology, suppliers, other
primamry role of PIMS
help managers understand and react to their business enviroment
supply chain strategy
aligned with business strategy, specifies how the supply chain should function to supply chain goals
sustainability strategy
society increasing emphasis on corporate sustainability in the form of government regulations and interest groups, sustainability goals should be important
global strategy
strategic decisions with respect to globalization must be made. what works in one country might not work in another. you dont have to go abroad to experience international competition
organization strategy provides the over all ____________ for the organization and covers the entire organization
operations strategy
used to guide the operations fiction- narrower in scope
most traditional strategies of business organization emphasize ____________ or ___________
cost minimization, product differentiation
quality based strategy
focuses on improving the quality of an organizations product or service
time based strategy
focuses on reducing time required to accomplish various activities
achieve reduced time
planning time, product service design time, processing time, change over time, delivery time, response time for complaints
low cost/ high volume
= minimal variation
wide variety/ customization
= difficulty with flow
balance score card
top down management system that an organization can use to clarify their vision and strategy & transform them into action
pros to balance score card
helps managers focus attention on strategic issues and the implementation of strategy.
cons to balance score card
little attention to suppliers and government regulations, and community, environmental and sustainability issues are missing
an index that measures output relative to input
goods or services/ labor, materials, energy, other resources)
productivity growth
current prod-previous prod/ previous productivity
productivity growth rate is a key factor in a countries _________and ____________ of its people
rate of inflation, standard of living
productivity in service sector
more problematic than manufacturing productivity, more difficult to measure because it involves intelectual action
process yield
ratio of outputs of good/ raw materials
factors that affect productivity
methods, capital, quality, technology, management
workers are _____ the main determinant of productivity