USING OPERATIONS TO COMPETE Why is operations and supply chain management important to business survival o It translates materials and services into outputs o In your own words what is operations and supply chain management about The systematic design direction and control of processes that transform inputs into services and products for internal as well as external customers What are key inputs into any process that produces a product or service o Workers managers equipment facilities materials land energy o What is a product A tangible saleable good o What is a service Something that can be offered intangible not able to be owned o Can there by services without products manufacturing gives rise to service opportunities How are manufacturing and service processes different o Manufacturing process physical durable output can be inventoried low customer contact long response time capital intensive quality easily measured o Service process intangible perishable output output cannot be inventoried high customer contact short response time labor intensive quality not easily measured What 4 core processes do operations supply chain mangers obsess over o Supplier relationship process new service product development process order fulfillment process customer relationship process o What decisions do operations supply chin manager typically make Involved in the development of new capabilities and maintenance of existing capabilities to best serve external customers Design new processes w strategic implications deeply involved in development and organization of supply chain links w external suppliers Should reflect corporate strategy Tactical decisions process improvement performance measurement project management planning o The means my which operations implement the firm s corporate strategy and helps to What is an operations strategy build a customer driven firm What is strategy o A plan of action or policy designed to achieve a major or overall aim What are core competencies and what do they include o The unique resources and strengths that an organization s management considers when formulating strategy o Workforce facilities market and financial know how systems and technology What are the four competitive priorities and competitive capabilities o Competitive Priorities critical dimensions that a process or supply chain must possess to satisfy its internal or external customer both now and in the future o Competitive Capabilities cost quality time and flexibility dimensions that a process or supply chain actually possess and is able to deliver o How are competitive priorities and competitive capabilities different Competitive capabilities work to become competitive priorities What is an order winner What is an order qualifier o Order winner criterion customers use to differentiate the services or product of one firm o Order qualifier minimal level required from a set of criteria for a firm to do business in a from those of another particular market segment Both o Are competitive capabilities order winners or order qualifiers PROCESS STRATEGY What are the four basic process strategy decisions o Process structure including layout customer involvement resource flexibility capital intensity o How are the four basic process strategy decisions defined Inter related Process structure how resources are partitioned between processes key characteristics process types relative and physical arrangement of operations layout Customer involvement ways in which customers become part of the process and extent to which they do so Resource flexibility ease with which employees and equipment can handle a wide variety of products output levels duties functions Capital intensity mix of equipment and human skills greater relative cost of equipment great capital intensity o How is a layout related to these process strategy decisions A layout is the physical arrangement of operations created by the various processes and can determine the four basic process strategies What are the key attributes of the Product Process Matrix o Volume product customization process characteristics o How do process structures in manufacturing differ along these attributes Volume Inventory availability to satisfy orders Low Job Low Moderate Batch High Line Highest Continuous flow Product Customization Low Moderate line None continuous flow Multiple Products Batch Made to Order Job Process Characteristics Job customized process flexibility and unique sequence of tasks Batch disconnected line flows moderately repetitive work Line connected line highly repetitive work Continuous flow continuous flows o How do process structures in manufacturing related to competitive priorities Competitive priorities dictate process structure What are the key attributes of the Customer Contact Matrix o Degree of customer contact customization process characteristics o How do process structures in service differ along these attributes Customer contact Front office high interaction Hybrid office some interaction Back office low interaction Customization Front office highly customized service Hybrid office standard services with some options Back office standardized services Process Characteristics process divergence and flexible flow Front office flexible flows with individualized processes Hybrid office flexible flows with some dominant paths with some expectations as to how work performed Back office line flows routine work performed the same with all customers o How does high customer contact differ from low customer contact in service processes High customer is more likely to be present and active process is more likely to be visible to customer who receives more personal attention Low passive involvement less personalized attention process out of sight o How does the degree of customer contact related to sales opportunity and efficiency in designing services Direct correlated o How do process structures in services relate to the moment of truth Choice of structure will determine frequency and quality of moments of truth What are the advantages and disadvantages of involving customers o Advantages better quality faster delivery greater flexibility low cost o Disadvantages disruptive managing timing and volume of demand is more challenging exposing factories and employees can have quality implications CAPACITY PLANNING What is capacity How is capacity typically measured o Maximum rate of output of a process or system o Typically measured by