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56 terms

Ch. 2

more important than ever and...
the bar is getting higher
Better quality, higher productivity, lower costs, and the ability to respond quickly to customer needs are what and what is getting higher
How effectively an organization meets the wants and needs of customers relative to others that offer similar goods or services
through some combination of their marketing and operations functions
Organizations compete how?
3 factors demonstrating marketing's influence
Identifying consumer wants and/or needs
Advertising and promotion
Product and service design
Quick response
Inventory management
Supply chain management
Managers and workers
businesses compete using what 10 key operations?
reasons why some organizations go splat...
Neglecting operations strategy
Failing to take advantage of strengths and opportunities
Failing to recognize competitive threats
Too much emphasis in product and service design and not enough on improvement
Neglecting investments in capital and human resources
Failing to establish good internal communications and cooperation
Failing to consider customer wants and needs
1. mission
2. goals
3. organizational strategies
4. functional strategies
5. tactics
list the 5 steps of hierarchical planning:
The reason for an organization's existence
Mission statement
States the purpose of the organization
"What business are we in?"
The mission statement should answer the question of what?
the basis for organizational goals
The mission statement serves as what?
Provide detail and the scope of the mission
Goals can be viewed as organizational what?
organizational strategies
Goals serve as the basis for what?
A plan for achieving organizational goals
what serves as a roadmap for reaching the organizational destinations?
Organizational strategies
Functional level strategies
Organizations have what 2 types of strategies?
Organizational strategies
-Overall strategies that relate to the entire organization
-Support the achievement of organizational goals and mission
Functional level strategies
Strategies that relate to each of the functional areas and that support achievement of the organizational strategy
The methods and actions taken to accomplish strategies
The "how to" part of the process
The actual "doing" part of the process
Core Competencies
The special attributes or abilities that give an
organization a competitive edge
To be effective core competencies and what need to be aligned?
Core competencies
Environmental scanning (SWOT)
"Effective" strategy formulation requires taking what into account: (2)
Order qualifiers
Order winners
"Successful" strategy formulation also requires taking what into account: (2)
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
Internal Factors
External Factors
Environmental Scanning is necessary to identify what 2 things?
Hint: think SWOT analysis.
Internal Factors
Strengths and Weaknesses
External Factors
Opportunities and Threats
are all key external factors
Economic conditions
Political conditions
Legal environment
are all key internal factors
Human Resources
Facilities and equipment
Financial resources
Products and services
Operations strategy
The approach, consistent with organization strategy, that is used to guide the operations function.
Quality-based strategy
Strategy that focuses on quality in all phases of an organization
Trying to overcome a poor quality reputation
Desire to maintain a quality image
A part of a cost reduction strategy
Pursuit of a quality-based strategy is rooted in a number of factors: list 3
Time-based strategies
Strategies that focus on the reduction of time needed to accomplish tasks
reducing time; Time-based strategies
It is believed that by what, costs are lower, quality is higher, productivity is higher, time-to-market is faster, and customer service is improved
--as stated by what strategy?
Areas where organizations have achieved time reductions:
Planning time
Product/service design time
Processing time
Changeover time
Delivery time
Response time for complaints
Agile operations
A strategic approach for competitive advantage that emphasizes the use of flexibility to adapt and prosper in an environment of change
agile operations involves the blending of several core competencies: list 4
The Balanced Scorecard Approach
A top-down management system that organizations can use to clarify their vision and strategy and transform them into action
Develop objectives
Develop metrics and targets for each objective
Develop initiatives to achieve objectives
Identify links among the various perspectives
Monitor results
according to the balanced scorecard approach, what 5 things must one do?
Internal business processes
Learning and growth
Identifying links among the various perspectives involves what 4 things?
A measure of the effective use of resources, usually expressed as the ratio of output to input
Tracking an operating unit's performance over time
Judging the performance of an entire industry or country
Productivity measures are useful for what?
higher standards of living

(As an economy replaces manufacturing jobs with lower productivity service jobs, it is more difficult to maintain high standards of living)
High productivity is linked to what
competitive advantage in the marketplace
Higher productivity relative to the competition leads to what?
high relative productivity
For an industry, what makes it less likely it will be supplanted by foreign industry?
output / input
how do you calculate productivity?
[(current productivity - previous productivity) / previous productivity] X 100%
how do you calculate productivity growth?
It involves intellectual activities
It has a high degree of variability
Service sector productivity is difficult to measure and manage why? (2 reasons)
process yield
A useful measure related to productivity is:
1. methods
2. quality
3. management
4. technology
5. capital
list the 5 factors affecting productivity:
Develop productivity measures for all operations
Determine critical (bottleneck) operations
Develop methods for productivity improvements
Establish reasonable goals
Make it clear that management supports and encourages productivity improvement
Measure and publicize improvements
(FYI--Don't confuse productivity with efficiency)
list the 6 steps for improving productivity
The operation with the least capacity
: Improving the efficiency of any other operation in the process, other than the bottleneck, will NOT improve the efficiency of the system
state the Rule of Bottlenecks: