competitive priorities
DESCRIPTION
Competitive Priorities. Cost 1. Low-cost operations Quality 2. Top quality 3. Consistent quality Time 4. Delivery speed 5. On-time delivery 6. Development speed Flexibility 7. Customization 8. Variety 9. Volume flexibility. Strategic Gaps. PRIORITIESGAPS - PowerPoint PPT PresentationTRANSCRIPT
Competitive PrioritiesCost 1. Low-cost operations
Quality 2. Top quality
3. Consistent quality
Time 4. Delivery speed
5. On-time delivery
6. Development speed
Flexibility 7. Customization
8. Variety
9. Volume flexibility
Strategic GapsPRIORITIES GAPS
1.
2.
3.
4.
Recommendations
Key Concepts in Operations Management
A Systematic Approach to Process Analysis
Identify Opportunity
1
DefineScope
2
DocumentProcess
3
Evaluate Performance
4
RedesignProcess
5
ImplementChanges
6
Figure 3.3Figure 3.3
Customer-Contact Model for Processes
Front office
Hybrid office
Back office
(1)(1) (2)(2) (3)(3)High interaction withHigh interaction with Some interaction withSome interaction with Low interaction withLow interaction withcustomers, highlycustomers, highly customers, standardcustomers, standard customers, standardizedcustomers, standardizedcustomized servicecustomized service services with some optionsservices with some options servicesservices
ProcessProcessCharacteristicsCharacteristics
(1)(1)Jumbled flows,Jumbled flows,complex work withcomplex work withmany exceptionsmany exceptions
(2)(2)Flexible flows withFlexible flows withsome dominantsome dominantpaths, moderate jobpaths, moderate jobcomplexity withcomplexity withsome exceptionssome exceptions
(3)(3)Line flows, routineLine flows, routinework easilywork easilyunderstood byunderstood byemployeesemployees
Less
Com
plex
ity, L
ess
Div
erge
nce,
Mor
e Li
ne F
low
sLe
ss C
ompl
exity
, Les
s D
iver
genc
e, M
ore
Line
Flo
ws
Less Customer Contact and CustomizationLess Customer Contact and Customization
Service PackageService Package
Figure 3.6Figure 3.6
Product-Process Matrix for Processes
(1)(1) (2)(2) (3)(3) (4)(4) (5)(5)One of a kindOne of a kind Low volume,Low volume, MultipleMultiple Few majorFew major High volumeHigh volumeproducts, madeproducts, made lowlow productsproducts products,products, highhighto customer to customer standardizationstandardization moderate moderate higherhigher standardization,standardization,orderorder volumevolume volumevolume commoditycommodity
productsproductsProcessProcess
CharacteristicsCharacteristics
(1)(1)Complex and Complex and highly customized highly customized process, unique process, unique sequence of taskssequence of tasks
(2)(2)Jumbled flows, Jumbled flows, complex work with complex work with many exceptionsmany exceptions
(3)(3)Disconnected line Disconnected line flows, moderately flows, moderately complex workcomplex work
(4)(4)Connected line, Connected line, routine workroutine work
(5)(5)Continuous Continuous flows, highly flows, highly repetitive workrepetitive workLe
ss C
ompl
exity
, Les
s D
iver
genc
e, M
ore
Line
Flo
ws
Less
Com
plex
ity, L
ess
Div
erge
nce,
Mor
e Li
ne F
low
s
Less Customization and Higher VolumeLess Customization and Higher Volume
Product DesignProduct Design
Continuousprocess
Projectprocess
Lineprocess
Batchprocess
Jobprocess
Waiting Line ModelsWaiting Line ModelsCustomer population
Service system
Served customers
Waiting line
Priority rule
Service facilities
Figure C.1
Operating CharacteristicsOperating Characteristics
Line lengthLine length
Number of customers in systemNumber of customers in system
Waiting time in lineWaiting time in line
Total time in systemTotal time in system
Service facility utilizationService facility utilization
Decision AreasDecision Areas Arrival rates Number of service
facilities Number of phases Number of servers
per facility Server efficiency Priority rule Service facility
arrangement
Applying the TheoryApplying the Theory of Constraints of Constraints
1. Identify the bottlenecks.
2. Optimize the schedule of the bottleneck.
3. Schedule all other resources to support the bottleneck.
4. If the bottleneck is still restrictive, increase its capacity.
5. Once the bottleneck has been relieved, check for other bottlenecks.
A15
B120
B230
B315
C20
D10
How Can I Tell Which Markets Will How Can I Tell Which Markets Will Be Most Profitable?Be Most Profitable?
Contribution per hour
c = contribution to profits and overhead per unit
s = changeover time (hrs.)
p = productivity rate (units per hour)
T = total resource hours required for customer order
= contribution per hourHC
cp( s)H
TCT
E
X
T
E
R
N
A
L
S
U
P
P
L
I
E
R
S
E
X
T
E
R
N
A
L
C
U
S
T
O
M
E
R
S
Support Processes Support Processes
Business- to- Business (B2B)
Customer Relationship
Process
Supplier Relationship
Process
Order -Fulfillment
Process
Supplier Relationship
Process
Order -Fulfillment
Process
Business-to-Customer
(B2C)
Customer Relationship
Process
First-Tier Supplier Service/Product Provider
New Service/Product
Development Process
New Service/Product
Development Process
External Value-Chain LinkagesExternal Value-Chain Linkages
0
2,000
4,000
6,000
8,000
10,000
SU/W
eek
Consumer
CustomerK-C
Package Supplier
VariabilityVariabilityFacial TissueFacial Tissue
Inventory Inventory MeasuresMeasures
Average inventory = $2 millionAverage inventory = $2 millionCost of goods sold = $10 millionCost of goods sold = $10 million52 business weeks per year52 business weeks per year
Weeks of supply = = 10.4 weeksWeeks of supply = = 10.4 weeks$2 million$2 million($10 million)/(52 weeks)($10 million)/(52 weeks)
Inventory turns = = 5 turns/yearInventory turns = = 5 turns/year$10 million$10 million$2 million$2 million
Example 9.1Example 9.1
Environments & Design Features
Design Factors Efficient Supply Chains Responsive Supply Chains
Environment Factors Efficient Supply Chains Responsive Supply Chains
The Shaping of Modern Value Chains
Ten Forces that Flattened the World
6. Offshoring
7. Supply Chaining
8. In-Sourcing
9. In-Forming
10. The Steroids
1. Berlin Wall and Windows Operating System
2. Web Browsers
3. Work Flow Software
4. Open Sourcing
5. Outsourcing