1. Competitiveness,
and Strategy

2. Competitiveness
Price
Flexibility
Quality
Time

3. Four Dimensions of Competitiveness
Price
Low Labor
Low Material
Low Overhead
Quality
Characteristics that satisfy customer expectations above what competitors offer
Consistent quality over time (Reliability)

4. Four Dimensions of Competitiveness
Time
Lead Time
Reliability in Lead Time (on time)
Flexibility
Variety
Volume

5. Formulation of Operational Strategy (SWOT)
Competing edges of the system (Strengths and Weaknesses)
The special attributes or capabilities that give an organization a competitive edge.
Environmental Scanning (Opportunities and Threats)
The considering of events and trends that present threats or opportunities for a company.

6. Technology, Facilities and Equipment Financial Resources Customers
Competitive Edges
Human Resources
Technology, Facilities and Equipment
Financial Resources
Customers
Product and Services
Suppliers

7. Threats and Opportunities
Main Threats and Opportunities
Competitor’s activities
Changes in consumer needs and preferences
Technological changes
Economic trends (GNP, unemployment, inflation, interests, taxes, tariffs)
Legal, political, and environmental issues

8. Traditional and Recent Strategies
Traditional Strategies
Cost Reduction
Reduce cost in all activities
Product Differentiation Differentiate all parts and products
New Strategies
Quality-based
Time-based

9. Quality Based Strategy
Focuses on quality in all aspects of an organization.
High quality not only in product but also in design, production, service and organization.
Quality at the source, zero defect, any defect stops the whole production system.
Order qualifiers: Characteristics that customers perceive as minimum standards of acceptance in the product.
Order winners: Characteristics that cause the product to be perceived better than that of competitors.

10. Time based strategies
Focuses on reduction of time needed to accomplish tasks.
Cycle time reduction results in: Higher Productivity, and therefore Lower Costs (both direct cost and overhead).
The less time a product stays in a factory the less time it has to absorb overhead costs.

11. Japanese Strategies Over Time
Low Price / Cheap Labor
Economy of Scale Strategy:
Inject capital to increase labor productivity
Focused Factory Strategy:
Quality, avoid diseconomy of scale
Flexible Factories Strategy:
Cope with changes in consumer preferences
Continuous Improvement Strategy
Zero Defect, Perfect Reliability (Car Industry)

12. Questions What are the factors that affect productivity?
List the four key ways that organizations compete.
What is “Reliability”?
What two key aspects are studied to formulate the Operations Strategy?
List the five main groups of aspects studied under threats and opportunities.
What are two classes of traditional strategies.
What are two classes of new strategies.
Briefly define “order qualifiers” and “order winners”.
Why time based strategy results in a lower cost.
What were the main concepts in each of the 5 development strategies of Japanese Industries.