This document provides an outline for a chapter on operations management strategies and competitiveness. It discusses developing missions and strategies, achieving competitive advantage through operations, 10 strategic operations management decisions, issues in operations strategy, strategy development and implementation, and global operations strategy options. Key learning objectives are to identify approaches used by operations management to achieve strategies like differentiation, low cost, and quick response.

1. OPM 533 2- Operations Management Operations Strategy & Competitiveness Chapter 2

5. Developing Missions and Strategies OPM 533 2-

8. Factors Affecting Mission OPM 533 2- Mission Philosophy & Values Profitability & Growth Environment Customers Public Image Benefit to Society

11. Strategy Process OPM 533 2- Marketing Decisions Operations Decisions Fin./Acct. Decisions Company Mission Business Strategy Functional Area Functional Area Strategies

17. OM’s Contribution to Strategy OPM 533 2- Response (Faster) Quality Product Process Location Layout Human Resource Supply Chain Inventory Scheduling Maintenance HP’s ability to follow the printer market Differentiation (Better) Cost leadership (Cheaper) Southwest Airlines No-frills service Sony’s constant innovation of new products Pizza Hut’s five-minute guarantee at lunchtime Federal Express’s “absolutely, positively on time” Motorola’s automotive products ignition systems Motorola’s pagers IBM’s after-sale service on mainframe computers Fidelity Security’s broad line of mutual funds FLEXIBILITY Design Volume LOW COST DELIVERY Speed Dependability QUALITY Conformance Performance AFTER-SALE SERVICE BROAD PRODUCT LINE Operations Decisions Examples Specific Strategy Used Competitive Advantage

19. Goods & Services and the 10 OM Decisions OPM 533 2-

20. Goods & Services and the 10 OM Decisions – Continued OPM 533 2-

21. Goods & Services and the 10 OM Decisions – Continued OPM 533 2-

22. Goods & Services and the 10 OM Decisions – Continued OPM 533 2-

23. Process Design OPM 533 2- Low Moderate High Volume High Moderate Low Variety of Products Process-focused Job Shops (Print shop, emergency room , machine shop, fine dining Repetitive (modular) focus Assembly line (Cars, appliances, TVs, fast-food restaurants) Product-focused Continuous (steel, beer, paper, bread, institutional kitchen) Mass Customization Customization at high Volume (Dell Computer’s PC)

29. Stages in the Product Life Cycle OPM 533 2- Introduction Growth Maturity Decline Growth rate

34. Strategy and Issues During a Product’s Life OPM 533 2-

37. SWOT Analysis to Strategy Formulation OPM 533 2- Strategy Mission External O pportunities Internal S trengths Internal W eaknesses External T hreats Competitive Advantage

38. Identifying Critical Success Factors OPM 533 2- Decisions Sample Option Chapter Product Customized, or standardized 5 Quality Define customer expectations and how to achieve them 6, S6 Process Facility size, technology, capacity 7, S7 Location Near supplier or customer 8 Layout Work cells or assembly line 9 Human resource Specialized or enriched jobs 10, S10 Supply chain Single or multiple source suppliers 11, S11 Inventory When to reorder, how much to keep on hand 12, 14,16 Schedule Stable or fluctuating productions rate 13, 15 Maintenance Repair as required or preventive maintenance 17 Marketing Service Distribution Promotion Channels of distribution Product positioning (image, functions) Finance/Accounting Leverage Cost of capital Working capital Receivables Payables Financial control Lines of credit Production/Operations

39. Activity Mapping: Southwest Airline’s Low Cost Competitive Advantage OPM 533 2- Courteous, but limited passenger service Lean, productive employees Short haul, point-to-point routes, often to secondary airports High aircraft utilization Standardized fleet of Boeing 737 aircraft Frequent, reliable schedules Competitive Advantage: Low Cost

40. Activity Mapping: Southwest Airline’s Low Cost Competitive Advantage OPM 533 2- Courteous, but limited passenger service No seat assignments No baggage transfers Automated ticketing machines No meals

41. Activity Mapping: Southwest Airline’s Low Cost Competitive Advantage OPM 533 2- Short haul, point-to-point routes, often to secondary airports Lower gate costs at secondary airports High number of flights, reduces employee idle time between flights

42. Activity Mapping: Southwest Airline’s Low Cost Competitive Advantage OPM 533 2- Frequent, reliable schedules High number of flights reduces employee idle time between flights Saturate a city with flights lowering administrative costs per passenger for that city

43. Activity Mapping: Southwest Airline’s Low Cost Competitive Advantage OPM 533 2- Standardized fleet of Boeing 737 aircraft Pilot training on only one type of aircraft Reduced maintenance inventory required because of only one type of aircraft Excellent supplier relations with Boeing has aided financing

44. Activity Mapping: Southwest Airline’s Low Cost Competitive Advantage OPM 533 2- High aircraft utilization Flexible employees and standard planes aids scheduling Flexible union contracts Maintenance personnel trained on only one type of aircraft 20 minute gate turnarounds

45. Activity Mapping: Southwest Airline’s Low Cost Competitive Advantage OPM 533 2- Lean, productive employees High level of stock ownership Hire for attitude, then train High employee compensation Empowered employees Automated ticket machines

46. Activity Mapping: Southwest Airline’s Low Cost Competitive Advantage OPM 533 2- Courteous, but limited passenger service Lean, productive employees Short haul, point-to-point routes, often to secondary airports High aircraft utilization Standardized fleet of Boeing 737 aircraft Frequent, reliable schedules Competitive Advantage: Low Cost

66. Four International Operations Strategies OPM 533 2-