operations midterm 2
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Operations management is about:
PEOPLE, PROCESSES & TECHNOLOGY with CUSTOMERS IN MIND!
postpone final production of product until order comes in
i.e. Tomato soup could be "Cambell's brand" or Giant Eagle brand. Soup is the same just with different label depending on need.
Ability to both CAPTURE AND ACCESS technology
Volume of goods that flow through a warehouse (measure of productivity). (i.e. # of units/# of hours).
i.e. how many products can be scanned/# of scanner people
This is dif. for each company, but should be consisten within the company
Cash flow extremely improtant for organization. How much the firm really has to spend.
Example of Job Shop
Orange County Choppers
Alignment betwen business processes and strategic position - focused on customer service (story of flight attendant)
Plan to achieve objective
Competitive Product Space
Measures where firm sits based on 4 product attributes of cost, response time, variety and quality
Position a firm wants to occupy within the competitive product space
Company's ability to best utilize its inputs (control product space/strategic position)
Corporate Strategy - Business Strategy - Function Strategy
Corporate Strategy - Businesses firm will compete in and how resources will be allocated to each business
Business Strategy - Defines scope of each division in terms of product attributes and market segments it will serve (competitive analysis of industry)
Function Strategy - Define marketing, operations, finance.
Putting together he plan thats in alignment w/ the business/corporate strategies (resources, marketing, etc. to fulfill goals)
Alignment of strategic position and the competencies of its proces architecture and managerial policies (day to day mgmt)
i.e. low cost operation can be both efficient and effective - i.e.e Walmart.
Effectiveness must "Strategically fit" with
- Strategic Position
- Process Architecture
- Mgmt policies (day to day mgmt)
Misalignment of strategic fit occurs when (3)
- 1. Senior mgmt out of touch with csutomers
- 2. senior mgmt out of touch with floor operations
- 3. Marketing group not wokring with ops
Strategic Fit requires both of these things:
- 1. Market Driven Strategy
- 2. Process Driven Strategy
Market Driven Strategy
Firm starts with competitive advantage priorities then develops processes to suppor them
Process Driven Strategy
Firm starts with a given set of process competencies then identifies a position that is best supported by the processes
Strategy should define both what to do and what not to do
Strategy/processes should be focused (Southwest vs Jet Blue)
Divide organization/plant floor into focused units
Plant within a Plan (PWP)
Shows how firms operate in the competive product space (responsiveness vs cost efficiency)
Firms that operate on the operations frontier are most effective and best in class
Operations Frontier Trade Offs
Firms on frontier line must trade off between responsiveness and cost efficiency. Firms not on this frontier do not have to trade off to increase their dimensions
Factory System - Resulted from 3 innovations
- 1. Division of labor - individuals dedicated to a specific task
- 2. Steam engine invention - transportation speed up 20x
- 3. Centralized work - assembly line + mass production
Standardization began with
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