Beruflich Dokumente
Kultur Dokumente
Operations Management
Canadian Edition
Slides adapted for Canada by Mats Gerschman
2-1
Outline
Global Company Profile: Boeing
A Global View of Operations
Developing Missions and
Strategies
Achieving Competitive Advantage
Through Operations
Ten Strategic OM Decisions
2-2
Outline Continued
Issues in Operations Strategy
Strategy Development and
Implementation
Global Operations Strategy
Options
2-3
Learning Objectives
When you complete this chapter you
should be able to:
1. Define mission and strategy
2. Identify and explain three strategic
approaches to competitive
advantage
3. Identify and define the 10 decisions
of operations management
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2-4
Learning Objectives
When you complete this chapter you
should be able to:
4. Understand the significance of key
success factors and core
competencies
5. Identify and explain four global
operations strategy options
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Country
France
France
France
Messier-Bugatti
Thales
France
France
Messier-Dowty
Diehl
France
Germany
Component
Passenger doors
Wiring
Design and
PLM software
Electric brakes
Electrical power
conversion system
and integrated
standby flight display
Landing gear structure
Interior lighting
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Country
Component
Rolls-Royce
UK
Engines
BAE SYSTEMS
Alenia Aeronautics
UK
Italy
Kawasaki Heavy
Industries
Japan
Toray Industries
Japan
Chengdu Aircraft
Group
China
Electronics
Upper centre
fuselage and
horizontal stabilizer
Forward fuselage,
fixed section of wing,
landing gear well
Carbon fibre for
wing and tail units
Rudder
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Global Strategies
Boeing sales and production are
worldwide
Benetton moves inventory to stores
around the world faster than its
competition by building flexibility into
design, production, and distribution
Sony purchases components from
suppliers in Thailand, Malaysia, and
around the world
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Global Strategies
Volvo a Swedish company, it was
controlled by an American company,
Ford, and is now owned by Geely of
China. The current Volvo S40 is built in
Belgium and shares its platform with the
Mazda 3 built in Japan and the Ford
Focus built in Europe
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Percent
25
Collapse of the
Berlin Wall
20
15
10
5
0
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1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 (est*)
Year
Figure 2.1
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Reasons to Globalize
Reasons to Globalize
Tangible 1. Reduce costs (labour, taxes, tariffs, etc.)
Reasons 2. Improve the supply chain
3. Provide better goods and services
4. Understand markets
Intangible 5. Learn to improve operations
Reasons 6. Attract and retain global talent
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Reduce Costs
Foreign locations with lower wage
rates can lower direct and indirect
costs
Maquiladoras
World Trade Organization (WTO)
North American Free Trade
Agreement (NAFTA)
APEC, SEATO, MERCOSUR, CAFTA
European Union (EU)
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Understand Markets
Interacting with foreign customers
and suppliers can lead to new
opportunities
Cell phone design from Europe
Cell phone fads from Japan
Extend the product life cycle
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Learn to Improve
Operations
Remain open to the free flow of
ideas
General Motors partnered with a
Japanese auto manufacturer to
learn new approaches to
production and inventory control
Equipment and layout have been
improved using Scandinavian
ergonomic competence
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Thievery
Bribery
Environment
Intellectual
property
Child labour
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Work ethic
Tax rates
Rate of technology
change
Number of skilled
workers
Political stability
Inflation
Availability of raw
materials
Interest rates
Population
Number of miles of
highway
Phone system
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Mission
Mission - where are
you going?
Organizations
purpose for being
Answers What do
we provide society?
Provides boundaries
and focus
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Telfer School of
Management Vision
The Telfer School of Management at the
University of Ottawa aims to be recognized
as a leading institution for management
education and innovative research. Through
its academic programs, offered in both
English and French, the Telfer School seeks
to prepare its students to assume leadership
positions in todays global economy and to
instill in them the highest standards of
integrity, ethics and social consciousness.
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Telfer School of
Management Mission
The Telfer School of Management seeks
to provide its students with:
Strong analytical, communication and
leadership skills;
The ability to perform in a culturally diverse
workplace;
The capability to apply and integrate
knowledge from the core disciplines of
management.
2011 Pearson Education, Inc. publishing as Prentice Hall
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Telfer School of
Management Mission
The Telfer School of Management seeks to add
value to external stakeholders by:
Leveraging the unique resources of the National
Capital Region to undertake and disseminate basic
and applied research in distinctive areas of
management of relevance to national and
international organizations.
Engaging in activities that build and strengthen
partnerships with its many constituents in the
technology, health, non-profit and governmental
sectors across Canada and internationally.
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Figure 2.2
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Figure 2.2
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Figure 2.2
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Environment
Mission
Customers
Public Image
Benefit to
Society
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Sample Missions
Sample Company Mission
To manufacture and service an innovative, growing, and
profitable worldwide microwave communications business
that exceeds our customers expectations.
Figure 2.3
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Sample Missions
Sample OM Department Missions
Product design
Quality management
Process design
Figure 2.3
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Sample Missions
Sample OM Department Missions
Location
Layout design
Human resources
Figure 2.3
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Sample Missions
Sample OM Department Missions
Supply-chain
management
Inventory
Scheduling
Maintenance
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Strategy
Action plan to
achieve mission
Functional areas have
strategies
Strategies exploit
opportunities and
strengths, neutralize
threats, and avoid
weaknesses
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STRATEGY PROCESS
Environmental
Analysis
Company
Mission
Busi
n
ess
Strategy
Functi
o
nal
Area
Strategies
Marketing
Operati
o
ns
Operations
Decisions Decisions
SWOT
Analysis
FiDecin./sAicct.
ons
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Competing on
Differentiation
Uniqueness can go beyond both the
physical characteristics and service
attributes to encompass everything
that impacts customers perception
of value
Safeskin gloves leading edge products
Walt Disney Magic Kingdom
experience differentiation
Hard Rock Caf dining experience
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Competing on Cost
Provide the maximum value as
perceived by customer. Does not
imply low quality.
Porter Airlines secondary airports,
few fare options, smaller crews, no
expensive ticket offices
Walmart small overhead, shrinkage,
distribution costs
Franz Colruyt no bags, low light, no
music, doors on freezers
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Competing on Response
Flexibility is matching market changes in
design innovation and volumes
A way of life at Hewlett-Packard
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Figure 2.4
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6. Human resources
and job design
7. Supply-chain
management
8. Inventory
9. Scheduling
10. Maintenance
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Goods
Services
Product is usually Product is not
tangible
tangible
Quality
Many objective
standards
Many subjective
standards
Process
and
capacity
design
Customer not
involved
Customer may be
directly involved
Capacity must
match demand
Table 2.1
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Goods
Near raw
materials and
labour
Services
Near customers
Layout
design
Production
efficiency
Enhances product
and production
Human
resources
and job
design
Technical skills,
Interact with
consistent labour customers, labour
standards, output standards vary
based wages
Table 2.1
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Goods
Relationship
critical to final
product
Services
Important, but
may not be
critical
Inventory
Raw materials,
work-in-process,
and finished
goods may be
held
Cannot be stored
Scheduling
Level schedules
possible
Meet immediate
customer demand
Table 2.1
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Services
Often repair and
takes place at
customers site
Table 2.1
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Operations Strategies of
Two Drug Companies
Competitive
Advantage
Product Differentiation
Low Cost
Product
Heavy R&D investment; Low R&D investment;
Selection and extensive labs; focus on focus on development
Design
development in a broad of generic drugs
range of drug
categories
Quality
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Operations Strategies of
Two Drug Companies
Competitive
Advantage
Product Differentiation
Low Cost
Process
Process focused;
general processes; job
shop approach, shortrun production; focus
on high utilization
Location
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Operations Strategies of
Two Drug Companies
Competitive
Advantage
Product Differentiation
Low Cost
Scheduling
Centralized production
planning
Many short-run
products complicate
scheduling
Layout
Layout supports
automated productfocused production
Layout supports
process-focused job
shop practices
Table 2.2
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Operations Strategies of
Two Drug Companies
Competitive
Advantage
Product Differentiation
Low Cost
Human
Resources
Supply Chain
Long-term supplier
relationships
Tends to purchase
competitively to find
bargains
Table 2.2
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Operations Strategies of
Two Drug Companies
Competitive
Advantage
Product Differentiation
Low Cost
Inventory
Maintenance
Table 2.2
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Introduction
Growth
Maturity
Best period to
increase market
share
Practical to change
price or quality
image
Poor time to
change image,
price, or quality
R&D engineering is
critical
Strengthen niche
Competitive costs
become critical
Defend market
position
Decline
Cost control
critical
Drive-thru
restaurants
CD-ROMs
LCD and
plasma TVs
Avatars
Boeing 787
Twitter
Analogue
TVs
Figure 2.5
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Introduction
Product design
and development
critical
Frequent
product and
process design
changes
Short production
runs
High production
costs
Limited models
Attention to
quality
Growth
Forecasting
critical
Product and
process
reliability
Competitive
product
improvements
and options
Maturity
Standardization
Fewer product
changes, more
minor changes
Optimum
capacity
Increasing
stability of
process
Decline
Little product
differentiation
Cost
minimization
Overcapacity
in the
industry
Prune line to
eliminate
items not
returning
good margin
Figure 2.5
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SWOT Analysis
Mission
Internal
Strengths
External
Opportunities
Analysis
Internal
Weaknesses
External
Threats
Strategy
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Form a Strategy
Build a competitive advantage, such as low price, design, or
volume flexibility, quality, quick delivery, dependability, aftersale service, broad product lines.
Figure 2.6
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Marketing
Service
Distribution
Promotion
Channels of distribution
Product positioning
(image, functions)
Decisions
Product
Quality
Process
Location
Layout
Human resource
Supply chain
Inventory
Schedule
Maintenance
Finance/Accounting
Production/Operations
Leverage
Cost of capital
Working capital
Receivables
Payables
Financial control
Lines of credit
Sample Options
Customized or standardized
Define customer expectations and how to achieve them
Facility size, technology, capacity
Near supplier or near customer
Work cells or assembly line
Specialized or enriched jobs
Single or multiple suppliers
When to reorder, how much to keep on hand
Stable or fluctuating production rate
Repair as required or preventive maintenance
Chapter
5
6, S6
7, S7
8
9
10
11, S11
12, 14, 16
13, 15
17
Figure 2.7
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ADM 3301 ~ Rim Jaber
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Activity Mapping at
Southwest Airlines
Courteous, but
Limited Passenger
Service
Lean,
Productive
Employees
Competitive Advantage:
Low Cost
High
Aircraft
Utilization
Standardized
Fleet of Boeing
737 Aircraft
Frequent,
Reliable
Schedules
Figure 2.8
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Activity Mapping at
Southwest Airlines
Courteous, but
Limited Passenger
Service
Lean,
Productive
Employees
High
Aircraft
Utilization
No meals (peanuts)
Standardized
Fleet of Boeing
737 Aircraft
Frequent,
Reliable
Schedules
Figure 2.8
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Activity Mapping at
Southwest Airlines
Courteous, but
Limited Passenger
Service
No meals (peanuts)
Lean,
Lower gate costs at
Productive
secondary airports
Employees
Standardized
Fleet of Boeing
737 Aircraft
Frequent,
Reliable
Schedules
Figure 2.8
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Activity Mapping at
Southwest Airlines
Courteous,
but
High number
of flights
Limited Passenger
reduces employee
idle time
Service
between flights
Lean,
Saturate a city with flights,
Productive
lowering administrative
Employees
Aircraft
Reduced
Utilization
maintenance
Standardized
inventory required
because
Fleet of
Boeing
of only one type737
ofAircraft
aircraft
Frequent,
Reliable
Schedules
Figure 2.8
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Activity Mapping at
Southwest Airlines
Pilot training required on
Courteous,
butaircraft
onlyLimited
one
type
of
Passenger
Service
Reduced
maintenance
inventory required because
Lean,
Short Haul, Point-toProductive of only one type of aircraft
Point Routes, Often to
Employees
Secondary Airports
Excellent supplier relations
with Boeing
has aided
Competitive
Advantage:
financing
Low
Cost
High
Aircraft
Utilization
Standardized
Fleet of Boeing
737 Aircraft
Frequent,
Reliable
Schedules
Figure 2.8
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Activity Mapping at
Southwest Airlines
Courteous, but
Limited
Passenger
Reduced
maintenance
Service
Lean,
Productive
Flexible
union
Employees
Flexible employeesSecondary
and
Airports
standard planes aid
contracts
Competitive Advantage:
scheduling
Low Cost
Maintenance personnel
trained only one type of
Frequent,
High
Aircraft
Reliable
aircraft
Utilization
Standardized
20-minute
gate
Fleet of Boeing
737 Aircraft
Schedules
turnarounds
Figure 2.8
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Activity Mapping at
Southwest Airlines
Automated ticketing
Courteous,
but
machines
Limited Passenger
Service
Empowered
employees
Lean,
Productive
Employees
High
Aircraft
Utilization
High employee
Short Haul, Point-toPoint Routes, Often to
compensation
Secondary Airports
Figure 2.8
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High
Four International
Operations Strategies
Figure 2.9
International Strategy
Import/export or
license existing
product
Examples
U.S. Steel
Harley Davidson
Low
Low
High
Local Responsiveness Considerations
(Quick Response and/or Differentiation)
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High
Four International
Operations Strategies
Figure 2.9
Global Strategy
Standardized product
Economies of scale
Cross-cultural learning
Examples:
Texas Instruments
Caterpillar
Otis Elevator
International Strategy
Import/export or
license existing
product
Examples
U.S. Steel
Harley Davidson
Low
Low
High
Local Responsiveness Considerations
(Quick Response and/or Differentiation)
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High
Four International
Operations Strategies
Figure 2.9
Global Strategy
Standardized product
Economies of scale
Cross-cultural learning
Examples:
Texas Instruments
Caterpillar
Otis Elevator
Import/export or
license existing
product
Multidomestic Strategy
Use existing
domestic model globally
Franchise, joint ventures,
subsidiaries
Examples
U.S. Steel
Harley Davidson
Examples
Heinz
The Body Shop
McDonalds Hard Rock Caf
International Strategy
Low
Low
High
Local Responsiveness Considerations
(Quick Response and/or Differentiation)
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High
Four International
Operations Strategies
Global Strategy
Standardized product
Economies of scale
Cross-cultural learning
Examples:
Texas Instruments
Caterpillar
Otis Elevator
Transnational Strategy
Movement of material, people,
ideas across national
boundaries
Economies of scale
Cross-cultural learning
Examples
Coca-Cola
Nestl
Import/export or
license existing
product
Multidomestic Strategy
Use existing
domestic model globally
Franchise, joint ventures,
subsidiaries
Examples
U.S. Steel
Harley Davidson
Examples
Heinz
The Body Shop
McDonalds Hard Rock Cafe
International Strategy
Figure 2.9
Low
Low
High
Local Responsiveness Considerations
(Quick Response and/or Differentiation)
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Summary
Global operations provide challenges and
opportunities
Organizations identify their strengths and
weaknesses
Missions and strategies are then developed
Competitive advantages can be achieved from
global operations
OM managers have huge impact on the decision
making
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