Ch 2 Operations Strategy in a Global Environment

2
Operations Strategy in a Global Environment
PowerPoint presentation to accompany Heizer and Render Operations Management, 10e Principles of Operations Management, 8e PowerPoint slides by Jeff Heyl

Reasons to Globalize

Reasons to Globalize
Reduce costs (labor, taxes, tariffs, etc.) Improve supply chain Provide better goods and services Understand markets Learn to improve operations Attract and retain global talent
Tangible Reasons
Intangible Reasons

Reduce Costs

Foreign locations with lower wage rates can lower direct and indirect costs
Improve the Supply Chain
Locating facilities closer to unique resources Auto design to California Athletic shoe production to China Perfume manufacturing in France

Provide Better Goods and Services

Objective and subjective characteristics of goods and services On-time deliveries Cultural variables Improved customer service


Understand Markets
Interacting with foreign customers and suppliers can lead to new opportunities
Learn to Improve Operations
Remain open to the free flow of ideas General Motors partnered with a Japanese auto manufacturer to learn new approaches to production and inventory control

Attract and Retain Global Talent

Offer better employment opportunities Better growth opportunities and insulation against unemployment Relocate unneeded personnel to more prosperous locations
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Cultural and Ethical Issues

Cultures can be quite different Attitudes can be quite different towards
Punctuality Lunch breaks Environment Intellectual property
Thievery Bribery Child labor

Developing Missions and Strategies

Mission statements tell an organization where it is going
The Strategy tells the organization how to get there

Mission

Mission - where are you going?Organization’s purpose for beingAnswers ‘What do we provide society?’Provides boundaries and focus


Benefit to Society
Mission
Factors Affecting Mission
Philosophy and Values
Profitability and Growth
Environment
Customers
Public Image

Strategic Process

Marketing
Operations
Finance/ Accounting
Functional Area Missions
Organization’s Mission

Strategy

Action plan to achieve mission Functional areas have strategies Strategies exploit opportunities and strengths, neutralize threats, and avoid weaknesses(SWOT analysis)
Strategies for Competitive Advantage
Differentiation – better, or at least differentCost leadership – cheaperResponse – rapid response


Competing on Differentiation
Individuality can go beyond both the physical characteristics and service attributes to encompass everything that impacts customer’s perception of value Competing on Cost
Provide the maximum value as perceived by customer. Does not mean low quality.

Competing on Response

Flexibility is matching market changes in design innovation and volumes Reliability is meeting schedules Timeliness is quickness in design, production, and delivery

Managing Global Service Operations

Capacity planning Location planning Facilities design and layout Scheduling
Requires a different perspective on: