Operations Management Chapter 2 (Strategy and Sustainability)

Triple Bottom Line (3P’S)
-evaluating the firm against economic, social and environmental criteria
-People, Profit, Planet
Shorter range implementation of tactics
day to day planning of what
Competitive Dimensions (Priorities) Deff
What the company would like to achieve, how they’d like to compete, and beat their competitors
-no firm excels simultaneously in all Competitive Dimensions
Competitive Capabilities Deff
unique and valued skills, processes and knowledge the firm is able to actually achieve and use to satisfy customers
Competitive Dimensions
Cost
-Low cost
-High cost
Quality
-Consistent quality
-Superior Quality
Time
-Delivery speed
-On-time/reliable delivery
Flexibility
-Volume
-Customization, postponement, mass customization
-Variety/mix
Others
-Service and Support (before/after sale)
-Social and environmental concerns
-returns/reverse supply chains
-Certifications/registrations
Trade-offs
-Focus on one priority (Dimension)
-Try to do well in more than one priority, which accepts a lesser performance versus the single focus
Order Winners
Characteristics causing customers to prefer you over your competitors
Order Qualifiers
Characteristics you need to have to reconsidered by potential customers
Risk
Any source of unplanned disruption like severe weather, labor strikes, recalls, facility disaster, terrorism
Risk Management
1. Identify sources of potential disruption
2. Asses the probabilities of consequences of these events 3. Develop plants to minimize impact
Productivity (total equation)
value of outputs (goods or services) produced / value of all input resources

outputs / all inputs

How to increase Productivity
1. Reduce inputs
2. Increasing outputs
3. Combination of both
Productivity Measurement
-Must be compared to be meaningful
-Comparisons to other firms (Competitive Benchmarking)
Operations compared to each other
Productivity (Partial equation)
value of outputs (goods or services) produced / value of a specific input

outputs / specific input

Productivity (Multi-factor equation)
value of outputs (goods or services) produced / value of some inputs

outputs / some inputs