Yokogawa Indonesia ＜ Document Number> Copyright © 2004, Yokogawa Indonesia Competitiveness, Strategy & Productivity

Copyright © 2004, Yokogawa Indonesia YIN-CMK Competitiveness: “How effectively an organization meets the needs of customers relative to others that offer similar goods or services”

Copyright © 2004, Yokogawa Indonesia YIN-CMK Competitiveness Quality Price Time Flexibility Differentiation Service

Copyright © 2004, Yokogawa Indonesia YIN-CMK Mission/ Strategy/ Tactics How do mission, strategies and tactics relate to decision making and distinctive competencies? StrategyTacticsMission

Copyright © 2004, Yokogawa Indonesia YIN-CMK Strategy Mission Mission Statement Strategy Tactics

Copyright © 2004, Yokogawa Indonesia YIN-CMK 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

Copyright © 2004, Yokogawa Indonesia YIN-CMK Planning and Decision Making Mission Goals Organizational strategy Functional strategies FinanceMarketingOperations Tactics Finance operations Marketing operations Operations operations Figure 2-1

Copyright © 2004, Yokogawa Indonesia YIN-CMK Six elements of Operations Strategy 1. Positioning the production system 2. Focus of factories and service facilities 3. Product/Service Design and Development

Copyright © 2004, Yokogawa Indonesia YIN-CMK Six elements of Operations Strategy 4. Technology Selection and Process Development 5. Allocation of resources to strategic alternatives 6. Facility planning: Capacity, Location, Layout

Copyright © 2004, Yokogawa Indonesia YIN-CMK Strategy Formulation Distinctive Competencies Environmental Scanning

Copyright © 2004, Yokogawa Indonesia YIN-CMK Banks, ATMsConvenience Location Disneyland Nordstroms Superior customer service Service Burger King Supermarkets Variety Volume Flexibility Express Mail One-hour photo Rapid delivery On-time delivery Time Sony TV Lexus, Cadillac Pepsi, Kodak, Motorola High-performance design or high quality Consistent quality Quality U.S. first-class postage Motel-6, Red Roof Inns Low Cost Price Examples of Distinctive Competencies

Copyright © 2004, Yokogawa Indonesia YIN-CMK ARSENAL OF OPERATIONS FUNCTION’S COMPETITIVE WEAPONS WEAPONWAYS to CREATE THE WEAPON Low production costsRedesign outputs, new production technology, increase in output levels, reduction of scrap, reduction of inventories Fast delivery Larger finished goods inventories, faster production rates, quicker shipping methods, location close to customers On-time deliveriesMore realistic promises, better control of production of orders, better information systems High quality products/servicesImprove product/service: design, appearance, reliability, performance and function, endurance, after-sales service

Copyright © 2004, Yokogawa Indonesia YIN-CMK ARSENAL OF OPERATIONS FUNCTION’S COMPETITIVE WEAPONS WEAPONWAYS to CREATE THE WEAPON FlexibilityChange type of production process, use CAD/CAM, reduction of amount of work in process, increase production capacity Product differentiationDesign and produce unique features LocationClose to customer, find unique locations Time for new product developmentImprove design efficiency, use CAD/CAM, use standardization or modular designs

Copyright © 2004, Yokogawa Indonesia YIN-CMK Order Qualifiers and Order Winners Order Qualifiers - Minimum Thresholds for Consideration Order Winners - Competitive Advantage in Marketplace Shift over Time - Winners to Qualifiers 2-7

Copyright © 2004, Yokogawa Indonesia YIN-CMK Economic conditions Political conditions Legal environment Technology Competition Markets Key External Factors

Copyright © 2004, Yokogawa Indonesia YIN-CMK Human Resources Facilities and equipment Financial resources Customers Products and services Technology Suppliers Key Internal Factors

Copyright © 2004, Yokogawa Indonesia YIN-CMK New Strategies Quality-based strategies Time-based strategies

Copyright © 2004, Yokogawa Indonesia YIN-CMK Time-based Strategies JANFEBMARAPRMAYJUN Planning Processing Changeover On time! Designing Delivery

Copyright © 2004, Yokogawa Indonesia YIN-CMK Productivity Partial measures Multi-factor measures Total measure

Copyright © 2004, Yokogawa Indonesia YIN-CMK 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

Copyright © 2004, Yokogawa Indonesia YIN-CMK 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

Copyright © 2004, Yokogawa Indonesia YIN-CMK Example 10,000 Units Produced Sold for $10/unit 500 labor hours Labor rate: $9/hr Cost of raw material: $5,000 Cost of purchased material: $25,000 What is the labor productivity?

Copyright © 2004, Yokogawa Indonesia YIN-CMK Factors Affecting Productivity CapitalQuality TechnologyManagement

Copyright © 2004, Yokogawa Indonesia YIN-CMK Standardization Use of Internet Computer viruses Searching for lost or misplaced items Scrap rates New workers Cuts in health benefits Factors Affecting Productivity

Copyright © 2004, Yokogawa Indonesia YIN-CMK Safety Shortage of IT workers Layoffs Labor turnover Design of the workspace Incentive plans that reward productivity Factors Affecting Productivity

Copyright © 2004, Yokogawa Indonesia YIN-CMK Improving Productivity Develop productivity measures Determine critical (bottleneck) operations Develop methods for productivity improvements Establish reasonable goals Get management support Measure and publicize improvements Don’t confuse productivity with efficiency

Copyright © 2004, Yokogawa Indonesia YIN-CMK Bottleneck Operation Operation Bottleneck Operation Bottleneck Operation Figure 2-3