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2 - 1 © 2011 Pearson Education, Inc. publishing as Prentice Hall
2 Operations Strategy in aGlobal Environment
PowerPoint pr
esentation to accompanyPowerPoint presentation to accompanyHei er and !enderHei er and !ender"perations #anagement, 10e"perations #anagement, 10ePrinciples o$ "perations #anagement, %ePrinciples o$ "perations #anagement, %e
PowerPoint slides by &e$$ Heyl
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2 - (
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2 - )
Global Reachability
5
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2 - * © 2011 Pearson Education, Inc. publishing as Prentice Hall
GlobalGlobal StrategiesStrategies+oeing sales and production are worldwide
ony purchases components $romsuppliers in hailand, #alaysia, and aroundthe world
/ol o considered a wedish company butuntil recently was controlled by an mericancompany, ord. he current /ol o (0 isbuilt in +elgium and shares its plat$orm withthe #a da ' built in &apan and the ord
ocus built in Europe .
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Global Global StrategiesStrategies
/ol o considered a wedish companybut until recently was controlled by an
merican company, ord. he current
/ol o (0 is built in +elgium and sharesits plat$orm with the #a da ' built in&apan and the ord ocus built in Europe .
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2 - % © 2011 Pearson Education, Inc. publishing as Prentice Hall
Six ReasonsSix Reasons toto GlobalizeGlobalize
!easons to 4lobali e!easons to 4lobali e1. !educe costs 5labor, ta6es, tari$$s, etc.7
2. Impro e supply chain'. Pro ide better goods and ser ices(. 8nderstand mar9ets). :earn to impro e operations
*. ttract and retain global talent
angible !easons
Intangible
!easons
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2 - ; © 2011 Pearson Education, Inc. publishing as Prentice Hall
1. Reduce Costs1. Reduce Costsoreign locations with lower wage
rates can lower direct and indirectcosts
#aorth merican ree rade
greement 5> 7PE?, E ", #E!?" 8!, ?
European 8nion 5E87
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2 - 10 © 2011 Pearson Education, Inc. publishing as Prentice Hall
2. Improve the Supply Chain2. Improve the Supply Chain
:ocating $acilities closer touni
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2 - 11 © 2011 Pearson Education, Inc. publishing as Prentice Hall
3. rovide !etter Goods3. rovide !etter Goodsand Servicesand Services
"b@ecti e and sub@ecti echaracteristics o$ goods andser ices
"n-time deli eries
?ultural ariables
Impro ed customer ser ice
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2 - 12 © 2011 Pearson Education, Inc. publishing as Prentice Hall
". #nderstand $ar%ets". #nderstand $ar%ets
Interacting with $oreign customersand suppliers can lead to newopportunities
E6tend the product li$e cycle
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2 - 1' © 2011 Pearson Education, Inc. publishing as Prentice Hall
&. 'earn to Improve&. 'earn to Improve
(perations(perations!emain open to the $ree $low o$ideas
4eneral #otors partnered with a&apanese auto manu$acturer tolearn new approaches toproduction and in entory control
E
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2 - 1( © 2011 Pearson Education, Inc. publishing as Prentice Hall
). *ttract and Retain Global). *ttract and Retain Global
+alent +alent "$$er better employmentopportunities
+etter growth opportunities andinsulation against unemployment
!elocate unneeded personnel to
more prosperous locations
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2 - 1) © 2011 Pearson Education, Inc. publishing as Prentice Hall
Cultural and ,thical IssuesCultural and ,thical Issues
?ultures can be
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2 - 1* © 2011 Pearson Education, Inc. publishing as Prentice Hall
CompaniesCompanies -ant +o Consider -ant +o Consider
>ational literacy rate
!ate o$ inno ation
!ate o$ technologychange
>umber o$ s9illedwor9ers
Political stability
Product liability lawsE6port restrictions
/ariations in language
=or9 ethic
a6 rates
In$lation
ailability o$ rawmaterials
Interest rates
Population
>umber o$ miles o$highway
Phone system
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2 - 13 © 2011 Pearson Education, Inc. publishing as Prentice Hall
evelopingeveloping $issions$issions andandStrategiesStrategies
#ission#ission statements tell anorgani ation where it is going
he trategytrategy tells theorgani ation how to get there
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2 - 1% © 2011 Pearson Education, Inc. publishing as Prentice Hall
$ission$ission
#ission - where areyou goingA
"rgani ationBspurpose $or being
nswers C=hat dowe pro ide society AB
Pro ides boundariesand $ocus
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2 - 1; © 2011 Pearson Education, Inc. publishing as Prentice Hall
+ene$it toociety
#ission
/actors *00ecting/actors *00ecting $ission$ission
Philosophyand /alues
Pro$itabilityand 4rowthEn ironment
?ustomers Public Image
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2 - 20 © 2011 Pearson Education, Inc. publishing as Prentice Hall
SampleSample $issions$issions
Sample Company Mission
To manufacture and service an innovative, growing, and profitableworldwide microwave communications business that exceeds ourcustomers’ expectations.
Sample perations Management Mission
To produce products consistent with the company’s mission as the
worldwide low!cost manufacturer.
igure 2.'
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2 - 21 © 2011 Pearson Education, Inc. publishing as Prentice Hall
Strategic rocessStrategic rocess
#ar9eting "perations inanceDccounting
unctional rea #issions
"rgani ationBs#ission
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2 - 22 © 2011 Pearson Education, Inc. publishing as Prentice Hall
Strategy Strategy
ction plan toachie e mission
unctional areasha e strategies
trategies e6ploitopportunities and
strengths , neutrali ethreats, and a oidwea9nesses
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Strategies 0orStrategies 0or
Competitive *dvantageCompetitive *dvantage. i$$erentiation better, or at
least di$$erent
+. ?ost leadership cheaper
?. !esponse rapid response
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2 - 2( © 2011 Pearson Education, Inc. publishing as Prentice Hall
*. Competing on *. Competing on
i00erentiationi00erentiation8ni
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2 - 2) © 2011 Pearson Education, Inc. publishing as Prentice Hall
!. Competing on!. Competing on Cost Cost
Pro ide the ma6imum alue aspercei ed by customer.
oes not imply low
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2 - 2* © 2011 Pearson Education, Inc. publishing as Prentice Hall
C. Competing onC. Competing on ResponseResponse
le6ibility is matching mar9et changes indesign inno ation and olumes
way o$ li$e at Hewlett-Pac9ard
!eliability is meeting schedules4erman machine industry
imeliness is
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2 - 23 © 2011 Pearson Education, Inc. publishing as Prentice Hall
($ s($ s Contribution toContribution to Strategy Strategy
Product
Guality
Process
:ocation
:ayout
Human resource
upply chain
In entory
cheduling
#aintenance
I E!E> I I">Inno ati e design a$es9inBs inno ati e glo es +road product line idelity ecurityBs mutual
$unds $ter-sales ser ice ?aterpillarBs hea y e E le6ibility Hewlett-Pac9ardBs response to
olatile world mar9et !eliability edE6Bs Jabsolutely, positi ely,
on timeK Guic9ness Pi a HutBs )-minute guarantee
at lunchtime
igure 2.(
10 "perations ?ompetiti eecisions pproach E6ample d antage
!esponse5$aster7
?ost
leadership5cheaper7
i$$erentiation5better7
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2 - 2% © 2011 Pearson Education, Inc. publishing as Prentice Hall
$anaging$anaging
Global Global Service (perationsService (perations
?apacity planning
:ocation planning
acilities design and layoutcheduling
!e
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2 - 2; © 2011 Pearson Education, Inc. publishing as Prentice Hall
rocessrocess esignesign
:ow #oderate High/olume
High
#oderate
:ow
/ a r
i e t y o
$ P r o
d u c
t s
Process-$ocused&"+ H"P
5Print shop, emergencyroom, machine shop,
$ine-dining
restaurant7!epetiti e 5modular7
$ocusE#+:M :I>E
5?ars, appliances,/s, $ast-$oodrestaurants7 Product $ocused
?"> I>8"85 teel, beer, paper,bread, institutional
9itchen7
#ass ?ustomi ation?ustomi ation at high
/olume5 ell ?omputerBs P?,
ca$eteria7
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2 - '0 © 2011 Pearson Education, Inc. publishing as Prentice Hall
IssuesIssues InIn (perations Strategy (perations Strategy
!esources iew
/alue ?hain analysis
PorterBs i e orces model
"perating in a system with manye6ternal $actors
?onstant change
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2 - '1 © 2011 Pearson Education, Inc. publishing as Prentice Hall
roductroduct '' i0ei0e C C ycleycle
+est period toincrease mar9etshare
!N engineering iscritical
Practical to changeprice or
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2 - '2 © 2011 Pearson Education, Inc. publishing as Prentice Hall
roductroduct '' i0ei0e C C ycleycle
Product designand de elopmentcritical
re
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2 - '' © 2011 Pearson Education, Inc. publishing as Prentice Hall
trategy
nalysis
S-(+ S-(+ *nalysis *nalysis
Internaltrengths
Internal= ea9nesses
E6ternal" pportunities
E6ternalhreats
#ission
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2 - '( © 2011 Pearson Education, Inc. publishing as Prentice Hall
Strategy evelopmentStrategy evelopment rocessrocess
etermine the ?orporate #ission
tate the reason $or the $irmBs e6istence and identi$y thealue it wishes to create.
orm a trategy
+uild a competiti e ad antage, such as low price, design, orolume $le6ibility,
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2 - ') © 2011 Pearson Education, Inc. publishing as Prentice Hall
Strategy evelopmentStrategy evelopment andand
ImplementationImplementationIdenti$y 9ey success $actors
+uild and sta$$ the organi ationIntegrate "# with other acti ities
+he operations manager s ob is to implementan ($ strategy provide competitiveadvantage and increase productivity
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2 - '* © 2011 Pearson Education, Inc. publishing as Prentice Hall
4 4 eyey S S uccessuccess / / actorsactors
ProductionD"perations
igure 2.3
Mar"eting
Service#istribution$romotionChannels of distribution$roduct positioning %image, functions&
'inance()ccounting
*everageCost of capital+or"ing capital
eceivables$ayables'inancial control*ines of credit
#ecisions Sample ptions Chapter
$roduct-uality$rocess*ocation*ayout
uman resourceSupply chain/nventoryScheduleMaintenance
Customi0ed, or standardi0ed#efine customer expectations and how to achieve them'acility si0e, technology, capacity1ear supplier or near customer +or" cells or assembly lineSpeciali0ed or enriched 2obsSingle or multiple suppliers+hen to reorder, how much to "eep on handStable or fluctuating production rate
epair as re3uired or preventive maintenance
54, S4
, S67
8988, S88
8:, 8;, 848
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/our/our InternationalInternational(perations Strategies(perations Strategies
? o s
t ! e
d u c
t i o n
? o n s
i d e r a
t i o n s
High
:ow
High:ow:ocal !esponsi eness ?onsiderations
5G i 9 ! dD i$$ ti ti 7
tandardi ed productEconomies o$ scale?ross-cultural learning
E6amplesLe6as Instruments
?aterpillar
"tis Ele ator
4lobal trategy ransnational trategy
#o e material, people, ideasacross national boundariesEconomies o$ scale?ross-cultural learning
E6amples?oca-?ola
>estl
International trategy
ImportDe6port orlicense e6istingproduct
E6amples8. . teelHarley a idson
#ultidomestic trategy8se e6istingdomestic model globally
ranchise, @oint entures,subsidiaries
E6amplesHein he +ody hop#c onaldBs Hard !oc9 ?a$e
igure 2.;