Operations and supply chain management: the design, operation, and improvement of the systems that create and deliver the firm’s primary products and services * Functional field of business
* Clear line management responsibilities
Concerned with the management of the entire system that produces a good or delivers a service Differences between services and goods:
1. Services are intangible
2. Services requires some interaction with the customer
3. Services are inherently heterogeneous
4. Services are perishable and time dependent
5. Services are defined and evaluated as a package of features Servitization: Servitization refers to a company building service activities into its product offerings for its current users * Maintenance, spare parts, training, and so on
Success starts by drawing together the service aspects of the business under one roof Servitization may not be the best approach for all companies Efficiency: Doing something at the lowest possible cost
Effectiveness: Doing the right things to create the most value for the company Value: quality divided by price
Triple bottom line: considers evaluating the firm against social, economic, and environmental criteria. * Social: pertains to fair and beneficial business practices toward labor, the community, and the region in which a firm conducts is business * Economic: the firm’s obligation to compensate shareholders who provide capital via competitive returns on investment * Environmental: the firm’s impact on the environment
Cost or price: One of the competitive dimensions used to attract customers. Make the product or deliver the service cheap. Every industry has a segment of the market that buys solely on the basis of low price. To be successful, a firm must be a low-cost producer; not a guarantee of profitability and success. Products and services are commodity like; cannot distinguish one from the other. Segment of this market is large and failure rate is high. Quality: Another competitive dimension. Make a great product or deliver a great service. Two characteristics that define quality: * Design quality: The set of features the product or service contains. Higher quality demands higher price. The goal in establishing the proper level of design quality is to focus on the requirements of the customer. Overdesigned products with inappropriate features will be viewed as prohibitively expensive. Under designed products and services will lose customers to products or services that cost a little more but, perceived by customers as offering greater value.
* Process quality: Relates directly to the reliability of the product or service. The goal is to produce defect-free products or services.
Straddling: Occurs when a company seeks to match the benefits of a successful position while maintain its existing position. It adds new features, services, or technologies onto the activities it already performs. Core capabilities (competencies): Skills that differentiate the service or manufacturing firm from its competitors.
3. Plan Operations and Supply (Monthly)
* Develop sales and operations plan
* Plan resource capacity
* Evaluate budgets
1. Develop/Refine the strategy (Yearly)
* Define vision, mission, and objectives
* Conduct strategic analysis
* Define strategic initiatives
2. Translate the Strategy (Quarterly)
* Define/revise initiatives
* Define/revise budgets
* Define/revise measures and targets
Closed-Loop Strategy Process
* All the activities that make up a firm’s operation relate to one another * To be efficient, must minimize total cost without compromising on customer needs * Activity-system maps show how a company’s strategy is delivered through a set of tailored activities
* Productivity is a common measure of...