MGMT 339 Ch. 2
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How effectively an organization meets the wants and needs of customers relative to others (other competitors) that offer similar goods or services
Define distinctive Competencies
The special attributes or abilities that give an organization a competitive edge.
If you are not careful in combining two or more approaches, you may lose focus and do not achieve advantage in any category
Define Operations strategy
The approach, consistent with organization strategy, that is used to guide the operations function.
What different Strategies an organization can choose from?
Low cost - Outsource to 3rd world countries with low labor costs
Scale-based strategies - Use capital-intensive methods to achieve high output volume and low unit costs.
Specialization - Focus on narrow product lines --> higher quality
Flexible operations - Focus on quick response and/or customization
High quality - Focus on achieving higher quality than competitors
Service - Focus on aspects of service (helpful, courteous, reliable)
Sustainability - Focus on environmental-friendly and energy-efficient operations
Org’s Strategy Formulation
- Distinctive competencies
- Environmental scanning – considering events and trends that present threats or opportunities for a company
- SWOT analysis – Strengths & weaknesses (internal focus), Opportunities and Threats (external focus)
- Order qualifiers/Order winners
- - 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
Define Operations Strategy
The approach, consistent with organization strategy, that is used to guide the operations function
- 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
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
Productivity = Output/Input
**Important to organizations that use a strategy of low cost cuz the higher the productivity, the lower the cost of the output.**
Partial Productivity = output / Single input
Multi-factor Productivity = Output / Multiple Inputs
**Convert input to same units as output. Ex: Labor hr --> Cost. Machine hr --> Cost**
- Ex: sq. yards 720 sq. yards = 22.5 sq. yards per hr.
- Labor hr 4 workers x 8 hr per worker
Compare current based on history equation
- Current Period Productivity - Previous Period Productivity Previous Period Productivity
hw example pg. 210 # 1 & 2
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