1. Recap Productivity definition Factors effecting productivity
Single factor productivity
Multifactor productivity
Productivity Measurement
Productivity analysis in enterprises
Problems

2. COMPETITIVENESS and STRATEGY
Lecture 3
COMPETITIVENESS and STRATEGY

3. Lecture Outline Competitiveness Dimension of Competitiveness
Important Concepts
Strategy
Elements of Strategy
Competitive advantage
OM contribution to strategy
Operations Strategy

4. Competitiveness
Competitiveness is process by which one entity strives to outperform another.
The allocation of resources to obtain the organization's long term objectives in the most efficient and effective way.
Competitiveness depends on productivity

5. Dimensions of Competitiveness
How Organization Compete against each other
Price
Flexibility
Managers
and
Workers
Quality
Differentiation
Time

6. Indicators of Competitiveness
Productivity: Productivity is efficiency and effectiveness with which goods & services are produced & provided.
Innovation involves the creation of product, service or process that is new to an organization
Product Innovation
Process Innovation
Incremental
Radical
Technological Innovation

7. New Competitiveness Paradigm
Change in competitiveness focus all over world from:
Product competitiveness to process competitiveness
From process competitiveness to structure/society competitiveness

8. Competitive Advantage
Types of competitive advantages a nation's companies enjoy must shift from comparative advantage (low cost labor or natural resources) to competitive advantages due to unique products or processes.

9. Low Competitiveness -Drawbacks
Lack of competitiveness is leading to:
reducing sales
Stagnation in business
Underutilization of Capacities & low productivity ..

10. Important Concepts Policy-Guideline for decision making
Rule-Dos and Donts
Strategy-Comprehension plan to achieve mission
Procedure-Steps in chronological order to achieve
Mission
The reason for existence for an organization
A clear statement of purpose
Vision-Where you want to see your organization in future

11. Elements of Strategy Scope Goals/Objectives Resource Deployment
Synergy
Sustainable Competitive Advantage

12. Strategy, Tactics and Operations
Strategy (To do)
Plan for achieving organizational goals
Long term focus (road map)
Organizational vs. functional (Hierarchical)
Tactics (How to)
Actions and methods to accomplish strategies
Short term focus
Operations (Doing)
Day-to-day execution

13. Strategy Example Mission: Live a good life
You are a business student at COMSATS Institute of Information Technology . You 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 Business Degree from COMSATS
Tactics: Select a business field of your interest and high market value.
Operations: Register
Buy books
Take courses
Study
Graduate
Apply & get job

14. Quality and Time Strategies
Quality-based strategies
Focuses on quality in all phases of an organization
Quality at the source
Time-based strategies
Focuses on reduction of time needed to accomplish tasks

15. OM Strategic Fit for synergy
Organization’s Strategy
Functional Area Strategies
Marketing
Strategy
Operations Strategy
Finance

16. SWOT Analysis to Strategy Formulation
Mission
Internal
External
This slide frames the individual elements of the SWOT analysis process.
The notion that SWOT must look at both internal and external issues can be raised here.
It may also be worthwhile stressing that the Internal analysis must be:
1. A critical analysis with an honest, open-minded assessment, not politically driven
2. An assessment of strengths and weaknesses in light of the specific corporate mission. S
trengths O
pportunities
Strategy
Internal
External W
eaknesses T
hreats
Competitive
Advantage
PowerPoint presentation to accompany Operations Management, 6E (Heizer & Render)
© 2001 by Prentice Hall, Inc., Upper Saddle River, N.J

17. 10 Strategic OM Decisions
Goods and service design
Quality
Process and capacity design
Location selection
Layout design
Human resources and job design
Supply chain management
Inventory
Scheduling
Maintenance

18. Achieving Competitive Advantage through Operations
Differentiation – better, or at least different (uniqueness in physical characteristics or service attributes
Cost leadership – cheaper (doesn’t imply low quality)
Response – (Flexibility, Reliability, rapid response)

19. OM’s Contribution to Strategy
Operations Decisions
Examples
Specific Strategy Used
Competitive Advantage
Quality
Product
Process
Location
Layout
Human Resource
Supply Chain
Inventory
Scheduling
Maintenance
FLEXIBILITY
Sony’s constant innovation of new products
Design
Compaq Computer’s ability to follow the PC market
Volume
Southwest Airlines No-frills service
LOW COST
DELIVERY
Pizza Hut’s five-minute guarantee at lunchtime
Speed
Federal Express’s “absolutely, positively on time”
Dependability
Differentiation
(Better)
QUALITY
Response
(Faster)
Motorola’s automotive products ignition systems
Conformance
Cost leadership
(Cheaper)
Motorola’s pagers
Performance
IBM’s after-sale service on mainframe computers
AFTER-SALE SERVICE
Fidelity Security’s broad line of mutual funds
BROAD PRODUCT LINE
PowerPoint presentation to accompany Operations Management, 6E (Heizer & Render)
© 2001 by Prentice Hall, Inc., Upper Saddle River, N.J

20. Preconditions - To Implement a Strategy
One must understand:
Competitors and new entrants
Environmental, legal, and economic issues
The notion of product life cycle
Available resources plus distinctive competencies
Integration of OM strategy with company strategy and other functions
Make the point here that this is a minimum set of “necessary” issues which must be understood. Understanding these alone does not guarantee success.
If you have not done it before, here is where you can begin to prod students into looking at the true complexity faced by the operations manager.,
PowerPoint presentation to accompany Operations Management, 6E (Heizer & Render)
© 2001 by Prentice Hall, Inc., Upper Saddle River, N.J

21. Impetus for OM Strategy Change
Changes in the organization
Stages in the product life cycle
Changes in the environment
You might begin here to raise the notion that change in strategy is not optional - but must occur when any other factor(s) change(s). The Japanese have come to view strategy as being continually adaptive.
The next slide lists the stages in the product life cycle. The several slides following that elaborate on strategic issues over the product life cycle.
PowerPoint presentation to accompany Operations Management, 6E (Heizer & Render)
© 2001 by Prentice Hall, Inc., Upper Saddle River, N.J

22. Strategy Development and Implementation
Environmental (SWOT) analysis
Distinctive competencies
Special attributes or abilities
Give organization competitive edge
Critical success factors
Build and staff the organization
Deployment - Integration/linkage/alignment
PowerPoint presentation to accompany Operations Management, 6E (Heizer & Render)
© 2001 by Prentice Hall, Inc., Upper Saddle River, N.J

23. Operations Strategy
Functional Focus
Linkage and Alignment

24. Forthcoming lecture- Managing Quality