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Operations Strategy

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  1. Operations Strategy Based on slides for Chase Acquilano and Jacobs, Operations Management, McGraw-Hill

  2. Strategy Overview - Four phases: • Environmental analysis • Strengths, Weaknesses, Opportunities, Threats • Determining the mission • On line sample statement for Wal-Mart "To give ordinary folk the chance to buy the same thing as rich people." • Go to http://www.muhlenberg.edu/committees/stratplanning/ • View the current mission statement -- Comments?? • Forming a Strategy • Implementing Main Strategy and Forming Functional Area Strategies

  3. Form a strategy - Examples Strategy often flows from competitive dimensions. Examples: • Low price • Flexibility • Speed • Service • Dependability • Broad product lines Question: How does a firm’s strategy impact operations? Example: Nordstrom? Wal-Mart? Muhlenberg College?

  4. Forming a strategy • What are some alternate strategies for an automobile manufacturer such as GM or Ford? • What are some strategies for a Fast food chain like McDonald’s? • What are some alternate strategies for a software manufacturer like Microsoft? • What are implications for operations?

  5. Strategic Operations Decisions

  6. Productivity • Total measure Productivity = Outputs/ Inputs • Partial measures of productivity = • Output/Labor or Output/ Capital or • Output/ Materials or Output/ Energy • Multifactor measures of productivity = • Output/[Labor + Capital + Energy] • Output / [Labor + Capital + Materials]

  7. Example • You have just determined that your service employees have used a total of 2400 hours of labor this week to process 560 insurance forms. Last week the same crew used only 2000 hours of labor to process 480 forms. • Is productivity increasing or decreasing? • Answer: Last week’s productivity = 480/2000 = 0.24, and this week’s productivity is = 560/2400 = 0.23. So, productivity is decreasing slightly.