1. Operations Strategy Based on slides for Chase Acquilano and Jacobs, Operations Management, McGraw-Hill

2. Strategy Overview - Four phases: Environmental analysis  Strengths, Weaknesses, Opportunities, Threats Determining the mission  On line sample statement for Wal-Mart "To give ordinary folk the chance to buy the same thing as rich people."  Go to http://www.muhlenberg.edu/committees/stratplanning/  View the current mission statement -- Comments?? Forming a Strategy Implementing Main Strategy and Forming Functional Area Strategies

3. Form a strategy - Examples Strategy often flows from competitive dimensions. Examples: Low price Flexibility Speed Service Dependability Broad product lines Question: How does a firm’s strategy impact operations? Example: Nordstrom? Wal-Mart? Muhlenberg College?

4. Forming a strategy What are some alternate strategies for an automobile manufacturer such as GM or Ford? What are some strategies for a Fast food chain like McDonald’s? What are some alternate strategies for a software manufacturer like Microsoft? What are implications for operations?

5. Strategic Operations Decisions DecisionGoodsServices Goods and service designProduct usually tangibleProduct not tangible -- new range of attributes QualityMany standardsSubjective standards Process and capacity designCustomer not involved in process Customer directly involved in process; capacity must match demand Location selection May need to be near raw materials or labor forceMay be near customer Layout designLayout can enhance efficiency Layout can enhance product as well as production Human resources and job design Focus on tech skills; labor standards consistentDirect workforce needs people skills Supply chain managementSupply chain relationships critical Supply chain relations important but not as critical InventoryGoods may be inventoriedCannot be inventoried SchedulingInventory may allow leveling of productionMust meet customers immediate schedule MaintenanceMaintenance often preventiveMaintenance often repair at customer's site

6. Productivity Total measure Productivity = Outputs/ Inputs Partial measures of productivity =  Output/Labor or Output/ Capital or  Output/ Materials or Output/ Energy Multifactor measures of productivity =  Output/[Labor + Capital + Energy]  Output / [Labor + Capital + Materials]

7. Example You have just determined that your service employees have used a total of 2400 hours of labor this week to process 560 insurance forms. Last week the same crew used only 2000 hours of labor to process 480 forms. Is productivity increasing or decreasing? Answer: Last week’s productivity = 480/2000 = 0.24, and this week’s productivity is = 560/2400 = 0.23. So, productivity is decreasing slightly.