Presentation on theme: "Competitiveness, Strategy, and Productivity. Competitiveness: How effectively an organization meets the wants and needs of customers relative to others."— Presentation transcript:
1 Competitiveness, Strategy, and Productivity
2 Competitiveness: How effectively an organization meets the wants and needs of customers relative to others that offer similar goods or services
3 Businesses Compete Using Marketing Identifying consumer wants and needs Pricing Advertising and promotion
4 Businesses Compete Using Operations Product and service design Cost Location Quality Quick response
5 Businesses Compete Using Operations Flexibility Inventory management Supply chain management Service
6 Why Some Organizations Fail Too much emphasis on short-term financial performance Failing to take advantage of strengths and opportunities Failing to recognize
competitive threats Neglecting operations strategy
7 Why Some Organizations Fail Too much emphasis in
product and service design and not enough on improvement Neglecting investments in capital and human resources Failing to establish good internal communications Failing to consider customer wants and needs
8 Mission/Strategy/Tactics How does
mission, strategies and tactics relate to decision making and distinctive competencies? StrategyTacticsMission
9 Strategy Strategies Plans for achieving organizational goals Mission The reason
for existence for an organization Mission Statement Answers the question “What business are we in?” Goals Provide detail and scope of mission Tactics The methods and actions taken to accomplish strategies
10 Planning and Decision Making
11 Strategy Example Rita is a high school student. She would like to have a career in business, have a good job, and earn enough income to live comfortably Mission: Live a good life Goal: Successful career, good income Strategy: Obtain a college education Tactics: Select a college and a major Operations: Register, buy books, take
courses, study, graduate, get job Example 1
12 Examples of Strategies Low cost Scale-based strategies Specialization Flexible operations High quality Service
13 Strategy and Tactics Distinctive Competencies The special attributes or abilities that give an organization a competitive edge. Price Quality Time Flexibility Service Location
14 Banks, ATMsConvenienceLocation Disneyland Nordstroms
Superior customer serviceService Burger King Supermarkets Variety VolumeFlexibility Express Mail, Fedex, One-hour photo, UPS Rapid delivery On-time delivery Time Sony TV Lexus, Cadillac Pepsi, Kodak, Motorola High-performance design or high quality Consistent qualityQuality U.S. first-class postage Motel-6, Red Roof Inns Low CostPrice Examples of Distinctive Competencies
15 Operations Strategy Operations strategy – The approach, consistent with organization strategy, that is used to guide the operations function.
16 Quality and Time Strategies Quality-based strategies Focuses on maintaining or improving the quality of an organization’s products
or services Quality at the source Time-based strategies Focuses on reduction of time needed to accomplish tasks
17 Time-based Strategies JANFEBMARAPRMAYJUN Planning Processing Changeover On time! Designing Delivery
18 Productivity Productivity A measure of the effective use of resources, usually expressed as the ratio of output to input Productivity ratios are
used for Planning workforce requirements Scheduling equipment Financial analysis
19 Productivity Partial measures output/(single input) Multi-factor measures output/(multiple inputs)
Total measure output/(total inputs) Productivity= Outputs Inputs
20 Productivity Growth Current Period Productivity – Previous Period Productivity Previous Period Productivity Productivity Growth =
21 Measures of Productivity Table 2.4 Partial Output Output Output Output measures Labor Machine Capital Energy Multifactor Output
Output measures Labor + Machine Labor + Capital + Energy Total Goods or Services Produced measure All inputs used to produce them
22 Units of output per kilowatt-hour Dollar value of output per kilowatt-hour Energy Productivity Units of output per dollar input Dollar value of output per dollar input Capital Productivity Units of output per machine hour machine hour Machine Productivity Units of output per labor hour Units of output per shift Value-added per
labor hour Labor Productivity Examples of Partial Productivity Measures Table 2.5
23 Example 3 7040 Units Produced Sold for $1.10/unit Cost of labor of $1,000 Cost of materials: $520 Cost of overhead: $2000 What is the
multifactor productivity? Ans. 2.20
24 Example 3 Solution MFP =Output Labor + Materials + Overhead MFP =(7040 units)*($1.10) $1000 + $520 + $2000 MFP =2.20
25 Figure 2-2
26 Factors Affecting Productivity CapitalQuality TechnologyManagement
27 Standardization Quality Use of Internet Computer viruses Searching for lost or misplaced items Scrap rates New workers Other Factors Affecting Productivity
28 Safety Shortage of IT workers Layoffs Labor turnover Design of the workspace Incentive plans that reward productivity Other Factors Affecting Productivity
29 Bottleneck Operation Figure 2.3