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II. Operations Strategy and Process Choice . Operations Management and Competitive Advantages “An Efficiency Drive” “Case Study: Burger Time” Process Types and The Product-Process Matrix Case Discussion: Kristen’s Cookies Process Flow Diagram and Gantt Chart. An Efficiency Drive.

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ii operations strategy and process choice
II. Operations Strategy and Process Choice
  • Operations Management and Competitive Advantages
    • “An Efficiency Drive”
    • “Case Study: Burger Time”
  • Process Types and The Product-Process Matrix
  • Case Discussion: Kristen’s Cookies
  • Process Flow Diagram and Gantt Chart
an efficiency drive
An Efficiency Drive
  • How critical is time for drive-through?
  • Is drive-through a good deal for the restaurants?
  • What are the efforts to save time?
  • Implications
case discussion burger time
Case Discussion: Burger Time
  • What are the major operational differences between McDonald’s and Burger King?
  • How do these differences relate to each company’s competitive strategies?
  • What implications do these differences have for the management of operations?
competitive advantages and operations management
Competitive Advantages and Operations Management

Competitive Advantages

  • Price
    • Cost
  • Quality
    • Customer service
    • Consistent quality
  • Time
    • Rapid, reliable delivery
  • Variety
  • Operations Management
  • Match supply with demand
  • Quantitative methods and qualitative strategies to
    • ensure efficient use of resources
    • find the right balance between competing objectives
    • improve performance along multiple dimensions simultaneously
performance dimensions in retail banking
Performance Dimensions in Retail Banking
  • Quality: courteous services, consistency (reliability), accurate information (credibility), empathy, timely information (customer responsiveness), conformance, employee skill and knowledge
  • Time: delivery speed (waiting time), convenient services (access), on time delivery (account statements), handling customer complaints
  • Flexibility: a broad line of financial products, system responsiveness, new product introduction speed, rapid staff changes, customizations
  • Cost: cost effective back and front-office labor productivity, cost effective back-office technology innovations, transaction processing costs
the changing sources of competitive advantage
Low Cost & Scale Economies (< 1960s)

Focused Factories (mid 1960s)

Flexible Factories and Product variety (1970s)

Quality (1980s)

Time (late 1980s-1990s--> )

The changing sources of competitive advantage
process types match supply with demand
Process types: Match Supply with Demand
  • Economics
  • Two options
    • Make supply after demand: Make to order (MTO)
    • Make supply before demand: Make to stock (MTS)
    • Matching supply with demand means
process types resource types and layout
Process Types: Resource Types and Layout
  • Job Shop process
    • General purposed/flexible resources
    • Process focused layout: Jobs have flexible routing, go from one resource to another as needed
    • Wide variety of products, customized products
  • Batch process
    • Similar to JS, but with larger lot sizes, some EOS, more commonality in the resources required, still not cost effective to build a dedicated assembly line.
  • Discrete flow process
    • Product focused layout: Fixed (possibly automated) flow of products, tightly connected stages (WIP is automatically managed), specialized tasks
    • Heavily capitalized
    • High volume
  • Continuous flow process
    • Product focused layout
    • heavily capitalized
    • Product is a commodity – no discrete units, minimal variety, high volume
matching products and processes

Opportunity Costs

Out-of-pocket Costs

Matching Products and Processes

Product

Low volume

Low Standardization

One of a kind

Low volume

Many Products

Higher volume

Few Major Products

High volume

High Standardization

Commodity Products

Process

Scheduling,

Materials Handling,

Shifting Bottlenecks

JOB SHOP

Jumbled Flow.

Process segments

loosely linked.

(Commercial Printer,

Ph.D program)

Disconnected Line

Flow/Jumbled Flow

but a dominant flow

exists.

BATCH

Worker Motivation,

Balance,

Maintaining Flexibility

(Heavy Equipment,

MBA program)

DISCRETE FLOWS

Connected Line

Flow (assembly line)

(Auto Assembly)

CONTINUOUS FLOW

Continuous, automated,

rigid line flow.

Process segments tightly

linked.

Capital Investment for big

chunk capacity,

Technological Change,

Vertical Integration

(Oil Refinery)

Managerial

Challenges

Bidding, delivery,

product design flexibility

Quality & Product Differentiation,

output volume flexibility

Price

process flow diagram kristen s cookies

Set oven

Mix

Spoon

Bake

Cool

Pack

Pay

Process Flow Diagram: Kristen’s Cookies

Time 6 2 1 9 5 2 1

(minutes/dozen)

Capacity

(dozen/minute, for orders of 1 dozen)

Max batch 3d d d d

Resources K K R, Oven Oven R R

slide16

2nd Stage

FB Reactor

1st Stage

CFB Reactor

CFB

Preheater

Inclined

Bucket Elevator

~ 110 m

Briquetting

Plant

Process

Gas

Heat

Exchanger

Process Gas

Compressor

Electrical

Substation&

Control

Room

Iron

Ore

Fines

Fired Gas Heaters

HBI Product

~ 160 m

slide17

Dis-

charge

Lock

Hoppers

2nd

Reactor

1st

Reactor

Pre-Heater

Briquet-

ting

Flash

heater

Pile of Iron

ore fines

Finished

goods

process flow diagram and gantt chart
Process Flow Diagram and Gantt Chart
  • Process Flow Diagram: Illustrates the flow of product or service from input to final output (stages).
    • Software (Visio et al.)
  • Gantt Chart: Illustrates the interplay between resources at all time
    • Important for scheduling and coordinating production
    • Software (Microsoft Project)
today s takeaways
Today’s Takeaways
  • Operations management and competitive advantages
  • Process Types and The Product-Process Matrix
    • Process Types
      • Matching supply with demand: MTO vs. MTS
      • Resource types and layout: job shop, batch, discrete flow, continuous flow
    • The Product-Process Matrix: Diagonal
  • Case discussion: Kristen’s Cookies
  • Process Flow Diagram and Gantt Chart
    • Flow Diagram: stages products flow through
    • Gantt Chart: interplay of resources Operational Measures