1. Chapter 2 Operations Strategy and Competitiveness
Competitive Dimensions
Order Qualifiers and Winners
A Framework for Manufacturing Strategy
Service Strategy Capacity Capabilities
Productivity Measures

2. Competitive Dimensions
Cost
Product Quality and Reliability
Delivery Speed
Delivery Reliability
Coping with Changes in Demand
Flexibility and New Product Introduction Speed
Other Product-Specific Criteria

3. Dealing with Trade-offs
Cost
Quality
Delivery
Flexibility

4. Order Qualifiers and Winners - Terry Hill
They are the basic criteria that permit the firms products to be considered as candidates for purchase by customers
Order winners?
They are the criteria that differentiates the products and services of one firm from another. 6

5. Service Breakthroughs
A brand name car can be an “order qualifier”
Repair services can be “order winners”

6. Operations Strategy Framework
Customer Needs
New : Old
product : product
Competitive
dimensions & reqs.
Quality, Dependability,
Speed, Flexibility, and Price
Operations & Supplier capabilities
Technology
People
Systems
R&D
CIM
JIT
TQM
Distribution
Support Platforms
Financial management
Human resource management
Information management
Enterprise capabilities
OM Competitive issues 8

7. Steps in Developing a Manufacturing Strategy
1. Segment the market according to the product group.
2. Identify product requirements, demand patterns, and profit margins of each group.
3. Determine order qualifiers and winners for each group.
4. Convert order winners into specific performance requirements.

8. Distinctive Competencies
Organizational strengths (SWOT) possessed by few competing firms
Exploiting can lead to competitive advantage

9. Service Strategy Capacity Capabilities
Process-based
Capacities that transforms material or information and provide advantages on dimensions of cost and quality.
Systems-based
Capacities that are broad-based involving the entire operating system and provide advantages of short lead times and customize on demand.
Organization-based
Capacities that are difficult to replicate and provide abilities to master new technologies.

10. Measures of Productivity in OM

11. Total Measure Productivity
Total measure Productivity = Outputs
Inputs or
= Goods and services produced
All resources used 17

12. Partial Measure Productivity
Partial measures of productivity =
Output or Output or Output or Output
Labor Capital Materials Energy 17

13. Multifactor Measure Productivity
Multifactor measures of productivity =
Output
Labor Capital Energy or
Labor Capital Materials 17

14. Example of Productivity Measurement
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.
Which productivity measure should be used?
Is productivity increasing or decreasing?
By what percent?

15. ANOTHER EXAMPLE: CALCULATE: OUPUT = $400,000 IN AUTO SALES
ASSUME TOTAL INPUTS TO BE:
LABOR + MATERIALS + ENERGY + CAPITAL
WHERE:
LABOR = $100,000
MATERIALS - $120,000
ENERGY = $50,000
CAPITAL = $ $75,000
CALCULATE:
PARTIAL MEASURE FOR LABOR
MULTIFACTOR MEASURE FOR MATERIALS AND ENERGY
TOTAL FACTOR