Operations management heizer 6e ch02

Operations Management Chapter – Operations Strategy in a Global Environment PowerPoint presentation to accompany Heizer/Render Principles of Operations Management, 6e Operations Management, 8e © 2006 Prentice Hall, Inc Hall, Inc © 2006 Prentice 2–1 Outline  Global Company Profile: Boeing  A Global View of Operations  Cultural and Ethical Issues  Developing Missions And Strategies  Mission  Strategy © 2006 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 © 2006 Prentice Hall, Inc 2–3 Outline – Continued  Issues In Operations Strategy  Research  Preconditions  Dynamics  Strategy Development And Implementation  Identify Critical Success Factors  Build and Staff the Organization  Integrate OM with Other Activities © 2006 Prentice Hall, Inc 2–4 Outline – Continued  Global Operations Strategy Options  International Strategy  Multidomestic Strategy  Global Strategy  Transnational Strategy © 2006 Prentice Hall, Inc 2–5 Learning Objectives When you complete this chapter, you should be able to: Identify or Define:  Mission  Strategy  Ten decisions of OM  Multinational corporation © 2006 Prentice Hall, Inc 2–6 Learning Objectives When you complete this chapter, you should be able to: Describe or Explain:  Specific approaches used by OM to achieve strategies  Differentiation  Low cost  Response © 2006 Prentice Hall, Inc 2–7 Learning Objectives When you complete this chapter, you should be able to: Describe or Explain:  Four global operations strategies  Why global issues are important © 2006 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 © 2006 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 © 2006 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 © 2006 Prentice Hall, Inc No meals (peanuts) Standardized Fleet of Boeing 737 Aircraft Frequent, Reliable Schedules Figure 2.8 – 67 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 © 2006 Prentice Hall, Inc Standardized Fleet of Boeing 737 Aircraft Frequent, Reliable Schedules Figure 2.8 – 68 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 © 2006 Prentice Hall, Inc Frequent, Reliable Schedules Figure 2.8 – 69 Activity Mapping Pilot training required on Courteous, butaircraft onlyLimited one type of Passenger Service Reduced maintenance inventory required because Lean, Short Haul, Point-toProductive of only one type of aircraft Point Routes, Often to Employees Secondary Airports Excellent supplier relations with Boeing has aided Competitive Advantage: financing Low Cost High Aircraft Utilization © 2006 Prentice Hall, Inc Standardized Fleet of Boeing 737 Aircraft Frequent, Reliable Schedules Figure 2.8 – 70 Activity Mapping Courteous, but Limited Passenger Reduced maintenance Service Lean, Productive Flexible union Employees 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 Frequent, High Aircraft Reliable aircraft Utilization © 2006 Prentice Hall, Inc Standardized 20-minute gate Fleet of Boeing 737 Aircraft Schedules turnarounds Figure 2.8 – 71 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 © 2006 Prentice Hall, Inc Figure 2.8 – 72 Strategy Cost Reduction Considerations High Four International Operations Strategies International  Import/export or license existing product Examples U.S Steel Harley Davidson Low Low High Local Responsiveness Considerations © 2006 Prentice Hall, Inc (Quick Response and/or Differentiation) – 73 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 © 2006 Prentice Hall, Inc (Quick Response and/or Differentiation) – 74 Four International Global Operations Strategies Strategy High Cost Reduction Considerations  Standardized product  Economies of scale  Cross-cultural learning International Strategy Examples Texas Instruments Examples Caterpillar U.S Steel Harley Davidson Otis Elevator  Import/export or license existing product Low Low High Local Responsiveness Considerations © 2006 Prentice Hall, Inc (Quick Response and/or Differentiation) – 75 Four International Operations Strategies High Cost Reduction Considerations Global Strategy  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 © 2006 Prentice Hall, Inc (Quick Response and/or Differentiation) – 76 High FourMultidomestic International Operations Strategies Strategy  Use existing  Standardized product domestic model  Economies of scale  Cross-cultural learning globally Examples Texas Instruments  Franchise, joint Caterpillar Otis Elevator ventures, subsidiaries Cost Reduction Considerations Global Strategy International Strategy Examples Heinz Examples U.S SteelMcDonald’s Harley Davidson The Body Shop Hard Rock Cafe  Import/export or license existing product Low Low High Local Responsiveness Considerations © 2006 Prentice Hall, Inc (Quick Response and/or Differentiation) – 77 Four International Operations Strategies High Cost Reduction Considerations Global Strategy  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 © 2006 Prentice Hall, Inc (Quick Response and/or Differentiation) – 78 Four International Transnational Operations Strategies Strategy High Global Strategy Cost Reduction Considerations  Move material, people, ideas Examples across national Texas Instruments Caterpillar boundaries Otis Elevator  Economies of scale  Cross-cultural International Strategy Multidomestic Strategy  Use existing  Import/export learning or domestic model globally license existing  Standardized product  Economies of scale  Cross-cultural learning 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 © 2006 Prentice Hall, Inc (Quick Response and/or Differentiation) – 79 Four International Operations Strategies High Cost Reduction Considerations Global Strategy  Standardized product  Economies of scale  Cross-cultural learning Examples Texas Instruments Caterpillar Otis Elevator International Strategy Transnational Strategy  Move material, people, ideas across national boundaries  Economies of scale  Cross-cultural learning 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 © 2006 Prentice Hall, Inc (Quick Response and/or Differentiation) – 80 Ranking Corruption Rank 11 12 15 16 17 17 24 35 64 71 © 2006 Prentice Hall, Inc Country Finland New Zealand Singapore Switzerland Australia United Kingdom Canada Germany Hong Kong Ireland USA Japan Taiwan Mexico China 2004 CPI Score (out of 10) 9.7 Good 9.6 9.3 9.1 8.8 8.6 8.5 8.2 8.0 7.5 7.5 6.9 5.6 3.6 Not So 3.4 Good – 81 ... Through Operations  Competing On Differentiation  Competing On Cost  Competing On Response  Ten Strategic OM Decisions © 2006 Prentice Hall, Inc 2–3 Outline – Continued  Issues In Operations. ..  Human resource and job design  Supply-chain management  Inventory  Scheduling  Maintenance – 43 Goods and Services and the 10 OM Decisions Operations Decisions Goods and service design Goods...  Integrate OM with Other Activities © 2006 Prentice Hall, Inc 2–4 Outline – Continued  Global Operations Strategy Options  International Strategy  Multidomestic Strategy  Global Strategy