Increasing Competitive Advantage & Sustainability through Processes Professor Mellie Pullman Week 1 1
Transcript
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Professor Mellie Pullman Week 1 1
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2 How are we going to _________ the product or service? Other
functional areas: Marketing Accounting Finance Human Resources
Information Systems
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A sequence of activities that is intended to achieve some
result. A process perspective: Links together all necessary
activities and increase ones understanding of the entire system,
rather than focusing on only one small part. 3
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CEOVice President Department Manager Vice President Department
Manager Process A Process B Process D Process E Process C 4
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Sales places order Marketing enters order into system Finance
does credit check Pick, Pack and Ship by distribution Invoiced by
Finance Installation by Field Engineer 5
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6 Transformation (Conversion) Process InputOutput
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Physical: manufacturing Location: transportation Exchange:
retailing Storage: warehousing or disk Physiological: health care
Informational: insurance, telecommunications, etc. 7
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8 Transformation (Conversion) Process Energy Materials Labor
Capital Information Goods or Services Feedback information for
control of process inputs and process technology
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How many liters of water does it take to make 1 Liter bottle of
Coke? 9
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In bottle itself: Roughly 1 liter of water Add Bottling plant
operations, cleaning, cooling, and other needs Roughly 2.7 liters
of water for 1 liter of Coke Add raw materials: the growing of
Sugar Cane, one of the thirstiest crops in the world Roughly 250
liters of water to make 1 liter of Coke. 10
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Water is to Coca-Cola as clean energy is to BP We need to mange
this issue (fresh water availability and use) or it will manage us.
Jeff Seabright, VP of Environment and Water Resources, Coca-Cola
Corporation Actions: influence the process Local targets
established to improve water efficiency and energy use Commitment
to rainwater harvesting 11
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12 Lid = 2.5 L Cup = 5.5 L Coffee = 143 L Milk = 49 L Sugar =
7.5 L Water =.5 L Energy 208 L Water per Cup A Caf Latt
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13 Buildings or Facilities People Processes Planning &
Scheduling Parts, Data & Equipment
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14 Think of a company that you believe has a sustainability
focus: What activities have they done any of the 5 Ps to improve
their sustainability? People Parts & Equipment Processes Plants
or Facilities (Buildings) Planning & Scheduling
(Measuring/Monitoring) Is there an area where they are particularly
weak? Why?
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Strategy without tactics is the slowest route to victory;
Tactics without strategy is the noise before defeat. Sun Tzu (2001)
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16 The firms long-range plan based on an understanding of the
marketplace Defines how a company intends to differentiate itself
from competitors Individual employees & functional units use
the strategy to align their efforts with each other to accomplish
the overall game plan
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17 Consistent pattern of decisions Internal analysis External
analysis Mission Distinctive Competence Objectives (cost, quality,
flexibility, delivery, etc) Policies (process, quality systems,
capacity, and inventory) Operations Strategy Business strategy
Functional strategies in marketing, finance, engineering, human
resources, and information systems Results Corporate strategy
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How is the business strategy different from the mission
statement? Southwest airlines? 18
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19 Southwest Airlines Co. ("Southwest") is a major domestic
airline that provides primarily short haul, high-frequency,
point-to-point, low-fare service.
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20 The mission of Southwest Airlines is dedication to the
highest quality of Customer Service delivered with a sense of
warmth, friendliness, individual pride, and Company Spirit.
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21 What does Southwest do better than most (if not all) of
their competitors? Southwest has the lowest operating cost
structure in the domestic airline industry, consistently offers the
lowest and simplest fares, has one of the best overall Customer
Service records.
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These dimensions of value enable firms to win customers: Cost
(Price) low production costs enables the company to price its
product below competitors Quality higher performance or a more
consistent product can support a price premium Delivery Time faster
delivery or consistent on-time delivery can support a price premium
Flexibility (variety) highly customized products or choice
flexibility can support a price premium Innovation or
Sustainability: products that connect with consumers on social,
environmental, and other values. 22
24 The long-range plan for the design & use of the
operations function to support the overall business strategy: The
location, size, & type of facilities The worker skills &
talents required The technology & processes to be used How
product & service quality will be controlled
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26 Policies about Process How to produce & deliver Quality
Criteria, measurement & process for achieving Capacity Physical
facilities (where, size, activities) & labor (what kind, how
many, when) Inventory What, when & how much?
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27 Policy TypePolicy AreaStrategy ChoiceNetflix
ProcessAutomationHand-made or machine-made Span of ProcessMake or
Buy Quality Systems ApproachPrevention or Inspection
SuppliersSelected on quality or cost CapacityFacility SizeOne large
or several small LocationNear markets, labor, or materials
InventoryAmountHigh or low levels Control SystemsControl in great
or limited detail
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Process Mindset Operations fit with the strategy of an
organization as a competitive advantage as the key to addressing
sustainability 28