Ops Chapter 1: Using Operations to compete

How are manufacturing and services processes different?
Manufacturing processes: change materials in one or more of the following dimensions
-Physical properties, shape, fixed dimensions, surface finish, joining parts and materials
If a process isn’t doing at least one of these, then it is a service process
-Locational (transportation/ logistics), exchange (retailing), storage (warehousing), physiological (health care), and informational (exchange of data/ info)
4 Core Processes
1. Customer relationship processes
2. New service/ product development processes
3. Order fulfillment processes
4. Supplier relationship processes
What “decisions” do operations managers typically make?
Structural Decisions: long term, high capital, less frequent
-Capacity, facilities, vertical integration & sourcing, information & process technology
Infrastructural Decisions: Shorter term, more frequent, less capital
-workforce, organization, quality systems, planning & controlling
Operation’s Strategy
Means by which operations implements the firm’s corporate strategy and helps to build a customer- driven firm, links long and short term operations decisions to corporate strategy and develops the capabilities the firm needs to be competitive.
What is a strategy?
Direction (What should we do?)
-What markets should we be in? What do we offer that is desirable? How should we serve our target markets?
Implementation (How do we do it?)
– What are our capabilities? How do we exploit them?
What are the 4 competitive priorities and capabilities?
1. Cost
-Low cost (price)
-High cost (price)
2. Quality
-Consistent quality
-Superior quality
3. Time
-On time/ reliable delivery
-Delivery speed
-Development speed of new products/ services
4. Flexibility
-Customization, postponement, mass customization
-Variety/ mix
-Volume flexibility
How are competitive priorities and capabilities different?
Competitive priorities: what the company would like to achieve.
Competitive capabilities: the unique and valued skills, processes, and knowledge the firm is able to actually achieve and use to satisfy customers
Order Winner
Characteristics causing a customer to prefer you over your competitors
What are core competencies and what do they include?
Core competencies: the unique resources and strengths an organization develops and possesses.
They include…
-A trained, productive and flexible workforce
-Appropriately designed and located facilities
-Market and financial know- how
-Expertise in systems and technology
Order Qualifiers
Characteristics you need to have to be considered by potential customers
Are competitive capabilities order winners or order qualifiers?
order winners
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