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Define Competitiveness
How effectively an organization meets the wants and needs of customers relative to others (other competitors) that offer similar goods or services
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Define distinctive Competencies
The special attributes or abilities that give an organization a competitive edge.
If you are not careful in combining two or more approaches, you may lose focus and do not achieve advantage in any category
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Define Operations strategy
The approach, consistent with organization strategy, that is used to guide the operations function.
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What different Strategies an organization can choose from?
Low cost - Outsource to 3rd world countries with low labor costs
Scale-based strategies - Use capital-intensive methods to achieve high output volume and low unit costs.
Specialization - Focus on narrow product lines --> higher quality
Flexible operations - Focus on quick response and/or customization
High quality - Focus on achieving higher quality than competitors
Service - Focus on aspects of service (helpful, courteous, reliable)
Sustainability - Focus on environmental-friendly and energy-efficient operations
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Org’s Strategy Formulation
- Distinctive competencies
- Environmental scanning – considering events and trends that present threats or opportunities for a company
- SWOT analysis – Strengths & weaknesses (internal focus), Opportunities and Threats (external focus)
- Order qualifiers/Order winners
- - Order qualifiers: Characteristics that customers perceive as minimum standards of acceptability to be considered as a potential purchase
- - Order winners: Characteristics of an organization’s goods or services that cause it to be perceived as better than the competition
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Define Operations Strategy
The approach, consistent with organization strategy, that is used to guide the operations function
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Operations Strategy
- Quality-based strategies
- Focuses on maintaining or improving the quality of an organization’s products or services
- Quality at the source
- Time-based strategies
- Focuses on reduction of time needed to accomplish tasks
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Define Productivity
A measure of the effective use of resources, usually expressed as the ratio of output to input
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Productivity ratios are used for?....
- Planning workforce requirements
- Scheduling equipment
- Financial analysis
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Productivity Equation
Productivity = Output/Input
**Important to organizations that use a strategy of low cost cuz the higher the productivity, the lower the cost of the output.**
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Partial Productivity
Partial Productivity = output / Single input
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Multi-factor Productivity
Multi-factor Productivity = Output / Multiple Inputs
**Convert input to same units as output. Ex: Labor hr --> Cost. Machine hr --> Cost**
- Ex: sq. yards 720 sq. yards = 22.5 sq. yards per hr.
- Labor hr 4 workers x 8 hr per worker
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Compare current based on history equation
- Current Period Productivity - Previous Period Productivity Previous Period Productivity
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hw example pg. 210 # 1 & 2
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