Operation management 10e heizer render chapter 02

Operations Management Chapter – Operations Strategy in a Global Environment PowerPoint presentation to accompany Heizer/Render Principles of Operations Management, 7e Operations Management, 9e © 2008 Prentice Hall, Inc 2–1 Outline  Global Company Profile: Boeing  A Global View of Operations  Cultural and Ethical Issues  Developing Missions And Strategies  Mission  Strategy © 2008 Prentice Hall, Inc 2–2 Outline – Continued  Achieving Competitive Advantage Through Operations  Competing On Differentiation  Competing On Cost  Competing On Response  Ten Strategic OM Decisions © 2008 Prentice Hall, Inc 2–3 Outline – Continued  Issues In Operations Strategy  Research  Preconditions  Dynamics © 2008 Prentice Hall, Inc 2–4 Outline – Continued  Strategy Development and Implementation  Critical Success Factors and Core Competencies  Build and Staff the Organization  Integrate OM with Other Activities © 2008 Prentice Hall, Inc 2–5 Outline – Continued  Global Operations Strategy Options  International Strategy  Multidomestic Strategy  Global Strategy  Transnational Strategy © 2008 Prentice Hall, Inc 2–6 Learning Objectives When you complete this chapter you should be able to: Define mission and strategy Identify and explain three strategic approaches to competitive advantage Identify and define the 10 decisions of operations management © 2008 Prentice Hall, Inc 2–7 Learning Objectives When you complete this chapter you should be able to: Identify five OM strategy insights provided by PIMS research Identify and explain four global operations strategy options © 2008 Prentice Hall, Inc 2–8 Global Strategies  Boeing – sales and production are worldwide  Benetton – moves inventory to stores around the world faster than its competition by building flexibility into design, production, and distribution  Sony – purchases components from suppliers in Thailand, Malaysia, and around the world © 2008 Prentice Hall, Inc 2–9 Global Strategies  Volvo – considered a Swedish company but it is controlled by an American company, Ford The current Volvo S40 is built in Belgium and shares its platform with the Mazda built in Japan and the Ford Focus built in Europe  Haier – A Chinese company, produces compact refrigerators (it has one-third of the US market) and wine cabinets (it has half of the US market) in South Carolina © 2008 Prentice Hall, Inc – 10 Activity Mapping Courteous, but Limited Passenger Service Lean, Productive Employees Short Haul, Point-toPoint Routes, Often to Secondary Airports Automated ticketing machines Competitive Advantage: No seat assignments Low Cost No baggage transfers High Aircraft Utilization No meals (peanuts) Standardized Fleet of Boeing 737 Aircraft Frequent, Reliable Schedules Figure 2.8 © 2008 Prentice Hall, Inc – 73 Activity Mapping Courteous, but Limited Passenger Service No meals (peanuts) Lean, Lower gate costs at Productive secondary airports Employees Short Haul, Point-toPoint Routes, Often to Secondary Airports High number of flights Competitive Advantage: reduces employee idleCost time Low between flights High Aircraft Utilization Standardized Fleet of Boeing 737 Aircraft Frequent, Reliable Schedules Figure 2.8 © 2008 Prentice Hall, Inc – 74 Activity Mapping Courteous, but High number of flights Limited Passenger reduces employee idle time Service between flights Lean, Saturate a city with flights, Productive lowering administrative Employees Short Haul, Point-toPoint Routes, Often to Secondary Airports costs (advertising, HR, etc.) Competitive Advantage: per passenger for that city Low Cost Pilot training required on Highonly one type of aircraft Aircraft Reduced Utilization maintenance Standardized inventory required because Fleet of Boeing of only one type ofAircraft aircraft 737 Frequent, Reliable Schedules Figure 2.8 © 2008 Prentice Hall, Inc – 75 Activity Mapping Pilot training required on Courteous, butaircraft onlyLimited one type of Passenger Service Reduced maintenance inventory required because Lean, Short Haul, Point-toof only one type of aircraft Productive Point Routes, Often to Employees Secondary Airports Excellent supplier relations with Boeing has aided Competitive Advantage: financing Low Cost High Aircraft Utilization Standardized Fleet of Boeing 737 Aircraft Frequent, Reliable Schedules Figure 2.8 © 2008 Prentice Hall, Inc – 76 Activity Mapping Courteous, but Limited Passenger Reduced maintenance Service Lean, Productive Employees Flexible union inventory required because of only one type of aircraft Short Haul, Point-to- Point Routes, Often to Flexible employeesSecondary and Airports standard planes aid contracts Competitive Advantage: scheduling Low Cost Maintenance personnel trained only one type of High Frequent, Aircraft Reliable aircraft Utilization Standardized 20-minute gate Fleet of Boeing 737 Aircraft Schedules turnarounds Figure 2.8 © 2008 Prentice Hall, Inc – 77 Activity Mapping Automated ticketing Courteous, but machines Limited Passenger Service Empowered employees Lean, Productive Employees High Aircraft Utilization High employee Short Haul, Point-toPoint Routes, Often to compensation Secondary Airports Hire for attitude, then train Competitive Advantage: High level of stock Low Cost ownership High number of flightsFrequent, Reliable reduces employee idle time Schedules Standardized Fleetbetween of Boeing flights 737 Aircraft Figure 2.8 © 2008 Prentice Hall, Inc – 78 High Four International Operations Strategies International Strategy Cost Reduction Considerations  Import/export or license existing product Examples U.S Steel Harley Davidson Low Low High Local Responsiveness Considerations © 2008 Prentice Hall, Inc (Quick Response and/or Differentiation) – 79 Four International Operations Strategies Cost Reduction Considerations High International Strategy  Import/export or license existing product Examples U.S Steel Harley Davidson Low Low High Local Responsiveness Considerations © 2008 Prentice Hall, Inc (Quick Response and/or Differentiation) – 80 Four International Global Operations Strategies Strategy High Cost Reduction Considerations  Standardized product  Economies of scale  Cross-cultural learning Examples Texas Instruments Examples Caterpillar U.S Steel Otis Elevator Harley Davidson International Strategy  Import/export or license existing product Low Low High Local Responsiveness Considerations © 2008 Prentice Hall, Inc (Quick Response and/or Differentiation) – 81 Four International Operations Strategies High Global Strategy Cost Reduction Considerations  Standardized product  Economies of scale  Cross-cultural learning Examples Texas Instruments Caterpillar Otis Elevator International Strategy  Import/export or license existing product Examples U.S Steel Harley Davidson Low Low High Local Responsiveness Considerations © 2008 Prentice Hall, Inc (Quick Response and/or Differentiation) – 82 Four International Multidomestic Operations Strategies Strategy High  Use existing  Standardizeddomestic product model  Economies of scale  Cross-cultural learning globally Examples Texas  Instruments Franchise, joint Caterpillar Otis Elevatorventures, subsidiaries Cost Reduction Considerations Global Strategy International Strategy Examples Heinz Examples McDonald’s U.S Steel Harley Davidson The Body Shop Hard Rock Cafe  Import/export or license existing product Low Low High Local Responsiveness Considerations © 2008 Prentice Hall, Inc (Quick Response and/or Differentiation) – 83 Four International Operations Strategies High Global Strategy Cost Reduction Considerations  Standardized product  Economies of scale  Cross-cultural learning Examples Texas Instruments Caterpillar Otis Elevator International Strategy  Import/export or license existing product Multidomestic Strategy  Use existing domestic model globally  Franchise, joint ventures, subsidiaries Examples U.S Steel Harley Davidson Examples Heinz The Body Shop McDonald’s Hard Rock Cafe Low Low High Local Responsiveness Considerations © 2008 Prentice Hall, Inc (Quick Response and/or Differentiation) – 84 Four International Transnational Operations Strategies Strategy High  Move material, people, ideas Examples across national Texas Instruments Caterpillar boundaries Otis Elevator  Economies of scale  Cross-cultural International Strategy Multidomestic Strategy  Use existing learning  Import/export or domestic model globally Global Strategy Cost Reduction Considerations  Standardized product  Economies of scale  Cross-cultural learning license existing product Examples Coca-Cola Nestlé Examples U.S Steel Harley Davidson Low  Franchise, joint ventures, subsidiaries Examples Heinz The Body Shop McDonald’s Hard Rock Cafe Low High Local Responsiveness Considerations © 2008 Prentice Hall, Inc (Quick Response and/or Differentiation) – 85 Four International Operations Strategies Cost Reduction Considerations High Global Strategy Transnational Strategy  Standardized product  Economies of scale  Cross-cultural learning  Move material, people, ideas across national boundaries  Economies of scale  Cross-cultural learning Examples Texas Instruments Caterpillar Otis Elevator International Strategy Examples Coca-Cola Nestlé  Import/export or license existing product Multidomestic Strategy  Use existing domestic model globally  Franchise, joint ventures, subsidiaries Examples U.S Steel Harley Davidson Examples Heinz The Body Shop McDonald’s Hard Rock Cafe Low Low High Local Responsiveness Considerations © 2008 Prentice Hall, Inc (Quick Response and/or Differentiation) – 86 Ranking Corruption Rank 1 11 14 15 16 17 20 34 70 121 Country 2006 CPI Score (out of 10) Finland 9.6 Least Corrupt Iceland 9.6 New Zealand 9.6 Singapore 9.4 Switzerland 9.1 UK 8.6 Canada 8.5 Hong Kong 8.3 Germany 8.0 Japan 7.6 USA, Belgium 7.3 Israel, Taiwan 5.9 Most Brazil, China, Mexico 3.3 Corrupt Russia 2.5 Table 8.2 © 2008 Prentice Hall, Inc – 87 ... this chapter you should be able to: Define mission and strategy Identify and explain three strategic approaches to competitive advantage Identify and define the 10 decisions of operations management. .. Through Operations  Competing On Differentiation  Competing On Cost  Competing On Response  Ten Strategic OM Decisions © 2008 Prentice Hall, Inc 2–3 Outline – Continued  Issues In Operations... Objectives When you complete this chapter you should be able to: Identify five OM strategy insights provided by PIMS research Identify and explain four global operations strategy options © 2008