1 / 17

Lecture 2

Service Operations Management Operations Strategy. Lecture 2. Team Members. Arzina Ackbar Beryl Laure Erica Rath Karen Sham- Laye Valentina Barra. Lecture Outline. Definition of business policy and the role of business strategy

odina
Download Presentation

Lecture 2

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Service Operations Management Operations Strategy Lecture 2

  2. Team Members • ArzinaAckbar • Beryl Laure • Erica Rath • Karen Sham-Laye • ValentinaBarra

  3. Lecture Outline • Definition of business policy and the role of business strategy • Definition of operations strategy • The development of an Operations Strategy • Operations Strategy Model • Characteristics of an effective operations strategy

  4. Business Policy; Operations Strategy • Business Policy • Business Strategy • Operations Strategy

  5. Developing a Business Strategy • MISSION; “To build a globally recognized brand which, by inspiring exceptional experiences among our guests, instilling pride and integrity in our associates and enhancing both the physical and human environment in which we operate, will deliver attractive returns to our shareholders.” • ENVIRONMENTAL SCANING • CORE COMPETENCIES

  6. Developing an Operations Strategy 1. Developing a Business Strategy Environmental Scanning: Monitoring the business environment for market trends, threats, and opportunities Mission: Statement that defines what our business is; who our clients are; and how our values define our business Core Competencies: Our unique strengths that help us win in the marketplace Business Strategy: Defined long-range plan for the company

  7. Identifying Competitive Priorities Common priorities include: • Cost: Low production costs enables the company to price its product below competitors - Eg: Lincoln Electric • reduced costs by $10 million a year for 10 years • Quality: Higher performance or a more consistent product can support a price premium - Eg: Ritz-Carlton • Every employee is empowered to satisfy a guest’s wish • Teams at all levels set objectives and devise quality action plans

  8. Common priorities include: cont… • Time: Faster delivery or consistent on-time delivery can support a price premium - Eg: Wal-Mart • replenishes its stock twice a week • Flexibility: Highly customized products or volume flexibility can support a price premium - Eg: Andersen Windows • number of products offered grew from 28,000 to 86,000 • number of errors are down to 1 per 200 truckloads

  9. Examples 1. Custom Foot Shoe Store: • customer’s feet are scanned electronically to capture measurements • custom shoes are mailed to the customer’s home in weeks 2. Ritz-Carlton – Quality reports tracks: • guest room preventive maintenance cycles • percentage of check-ins with no waiting • time spent to achieve industry-best clean room appearance

  10. Examples 3. L.L. Bean • ships orders the day they are received 4. Southwest Airlines • direct flights mean no baggage transfers • $30 million annual savings in travel agent commissions by requiring customers to contact the airline directly 5. Hewlett-Packard • produces electronic testing equipment in five days

  11. Translate Priorities into Design

  12. Factors that Influence Strategy Internal External • Human resources • Economic conditions • Facilities and equip • Political conditions • Financial resources • Legal environment • Customers • Technology • Products and services • Competition • Technology • Markets • Suppliers

  13. Example: British Airways • Corporate Mission: To be the undisputed leader in world travel • Operations Mission: Deliver overall superior service and good value to the customer • Distinctive Competence: Friendly, professional service • Objectives: Well-trained, motivated employees • Policies: Fast turnaround at counter, quick complaint responses, etc.

  14. Characteristics of aneffective operations strategy: • Internally and externally consistent with... – corporate/business strategy – other functional strategies (marketing, finance) – pattern of structural/infrastructure investment – competitive environment (customers, competitors) • Builds core operations capabilities – competitive advantages – new opportunities • Timeless and enduring • Explicit recognition of trade-offs – targets key performance dimensions – sets clear priorities/ promotes clarity

  15. Understand TradeoffsExample: Made-to-Order Pizza QUALITY & DESIGN FLEXIBILITY QUALITY Fresh, Natural Ingredients Toppings Choice Expensive Ingredients Slow to cook Low Volume Ovens VOLUME FLEXIBILITY COST TIME

More Related