1. Competitiveness, Strategy, and Productivity2
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
Flexibility
Inventory management
Supply chain management
Service and service quality
Managers and workers

5. Why Some Organizations Fail
Too much emphasis on short-term financial performance
Failing to take advantage of strengths and opportunities
Neglecting operations strategy
Failing to recognize competitive threats

6. 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

7. Mission/Strategy/Tactics

8. Strategy Mission Explains the existence for an organization
Mission Statement
States the purpose of an organization
Goals
Provide detail and scope of mission
Strategies
Plans for achieving organizational goals
Tactics
The methods and actions taken to accomplish strategies

9. Mission Mission Mission statement
The reason for an organization’s existence
Mission statement
States the purpose of the organization
The mission statement should answer the question of “What business are we in?”

10. Mission Statement
McDonald's brand mission is to "be our customers' favorite place and way to eat." Our worldwide operations have been aligned around a global strategy called the Plan to Win centering on the five basics of an exceptional customer experience -- People, Products, Place, Price and Promotion. We are committed to improving our operations and enhancing our customers' experience.
JOHNSON & JOHNSON PACIFIC CONSUMER SERVICE CENTRE
We will delight our consumers, treating each person who contacts us as if they are our only consumer, providing them with a response which is evidence of our interest and that leaves them with the clear understanding that they are important to us.
UNIVERSITY OF MALAYA
Mission   To advance knowledge and learning through quality research and education for the nation and for humanity.    

11. Goals
The mission statement serves as the basis for organizational goals
Goals
Provide detail and the scope of the mission
Goals can be viewed as organizational destinations
Goals serve as the basis for organizational strategies

12. Strategies Strategy A plan for achieving organizational goals
Serves as a roadmap for reaching the organizational destinations
Organizations have
Organizational strategies
Overall strategies that relate to the entire organization
Support the achievement of organizational goals and mission
Functional level strategies
Strategies that relate to each of the functional areas and that support achievement of the organizational strategy

13. Tactics and Operations
The methods and actions taken to accomplish strategies
The “how to” part of the process
Provide guidance and directions for carrying out actual operations
Operations
The actual “doing” part of the process

14. Planning and Decision Making
Figure 2.1
Mission
Organizational
Goals
Organizational Strategies
Functional Goals
Finance Strategies
Marketing Strategies
Operations Strategies
Tactics
Operating Procedures

15. Strategy Example Example 1 Mission: Live a good life
Jun Hee 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

16. Strategy and Tactics Strategy Factors Distinctive Competencies
The special attributes or abilities that give an
organization a competitive edge.
Strategy Factors
Price
Quality
Time
Flexibility
Service
Location

17. Examples of Operations Strategies
Table 2.2
Price
Low Cost
National first-class postage, Carrefour, Jetstar
Quality
High-performance design and/or high quality
Consistent quality
Sony TV, Lexus, Disneyland
Time
Coca-Cola, PepsiCo, Kodak, McDonald’s restaurants, UPS
Pizza Hut, FedEx
Rapid delivery On-time delivery
Flexibility
Variety
Volume
Burger King
McDonald’s
Service
Superior customer service
Disneyland, Hewlett-Packard, IBM
Location
Convenience
Supermarkets, dry cleaners

18. Global Strategy
Strategic decisions must be made with respect to globalization
What works in one country may not work in another
Strategies must be changed to account for these differences
Other issues
Political, social, cultural, and economic differences

19. Strategy Formulation Distinctive competencies Environmental scanning
SWOT
Order qualifiers
Order winners

20. Strategy Formulation Order qualifiers
Characteristics that customers perceive as minimum standards of acceptability to be considered as a potential purchase
Order winners
Characteristics of an organization’s goods or services that cause it to be perceived as better than the competition
Characteristics such as price, delivery reliability,
delivery speed and quality can be order qualifiers or
order winners.

21. Internal Factors & External Factors
Key External Factors
Key Internal Factors
Human Resources
Facilities and equipment
Financial resources
Customers
Products and services
Technology
Suppliers
Economic conditions
Political conditions
Legal environment
Technology
Competition
Markets

22. Operations Strategy
Operations strategy: The approach consistent with organization strategy, that is used to guide the operations function.

23. Strategic OM Decisions
Table 2.4
Decision Area
Affects
Product and service design
Costs, quality liability and environmental
Capacity
Cost structure, flexibility
Process selection and layout
Costs, flexibility, skill level, capacity
Work design
Quality of work life, employee safety, productivity
Location
Costs, visibility
Quality
Ability to meet or exceed customer expectations
Inventory
Costs, shortages
Maintenance
Costs, equipment reliability, productivity
Scheduling
Flexibility, efficiency
Supply chains
Costs, quality, agility, shortages, vendor relations
Projects
Costs, new products, services, or operating systems

24. 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

25. Time-Based Strategies
JAN
FEB
MAR
APR
MAY
JUN
Planning
Processing
Changeover
On time!
Designing
Delivery

26. 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

27. Productivity Productiv ity = Output Input Partial measures
output/(single input)
Multi-factor measures
output/(multiple inputs)
Total measure
output/(total inputs)
Productiv
ity =
Output
Input

28. Productivity Growth Productivity Growth =
Current Period Productivity – Previous Period Productivity
Previous Period Productivity

29. Measures of Productivity
Table 2.5
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

30. Examples of Partial Productivity Measures
Table 2.6
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
Dollar value of output per machine hour
Machine Productivity
Units of output per labor hour
Units of output per shift
Value-added per labor hour
Labor Productivity

31. Example 3 7040 Units Produced Cost of labor: $1,000
Cost of materials: $520
Cost of overhead: $2000
What is the multifactor productivity?
Ans. 2.0 units per dollar of input

32. Example 3: Solution MFP = Output Labor + Materials + Overhead
MFP = (7040 units)
$ $520 + $2000
MFP = 2.0 units per dollar of input

33. Process Yield
Process yield is the ratio of output of good product to input
Defective product is not included in the output
Service example:
Ratio of cars rented to cars available to rent

34. Factors Affecting Productivity
Capital
Quality
Technology
Management

35. Improving Productivity
Develop productivity measures for all operations
Determine critical (bottleneck) operations
Develop methods for productivity improvements (ideas from team of workers, engineers, managers)
Establish reasonable goals for improvement
Make it clear that management supports and encourages productivity improvement. Consider rewards for contributions.
Measure and publicize improvements
Don’t confuse productivity with efficiency . Efficiency is a narrower concept that pertains to getting the most out of a fixed set of resources; Productivity is a broader concept that pertains to effective use of overall resources.