operations management operations strategy in a global environment 全球環境下的作業策略...

Operations Operations ManagementManagement

Operations Strategy in a Global Operations Strategy in a Global EnvironmentEnvironment

全球全球環境下的環境下的作業作業策略策略 Chapter 2Chapter 2

OutlineOutline(( 大綱大綱 )) GLOBAL COMPANY PROFILE( 全球性公社槪述 ):

BOEING DEVELOPING MISSIONS AND STRATEGIES

Mission( 使命 ) Strategy( 策略 )

ACHIEVING COMPETITIVE ADVANTAGE THROUGH OPERATIONS( 透過作業建構競爭優勢 ) Competing on Differentiation Competing on Cost Competing on Response

TEN STRATEGIC OM DECISIONS( 策略性作業管理的決策 )

Outline - ContinuedOutline - Continued ISSUES IN OPERATIONSSTRATEGY ( 作業策略的

決策 ) Research Preconditions Dynamics

STRATEGY DEVELOPMENT AND IMPLEMENTATION( 策略發展與執行 ) Identify Critical Success Factors A Global view of Operations Cultural and Ethical Issues Build and Staff the Organization Integrate OM with Other Activities

Outline - ContinuedOutline - Continued GLOBAL OPERATIONS STRATEGY OPTIONS (

作業策略的全球佈局 ) International Strategy Multi-domestic Strategy Global Strategy Transnational Strategy

Management Issues inManagement Issues in Global Operations Global Operations(( 作業的全球觀作業的全球觀

點點 ))

Global Strategic Context Differentiation Cost leadership Response

Logistics Management

Location DecisionsSupply Chain Management

Supply-Chain ManagementSupply-Chain Management(( 供應鏈子管理供應鏈子管理 ))

Sourcing Vertical integration Make-or-buy decisions Partnering

Location DecisionsLocation Decisions(( 地點地點 ,, 位置位置 .. 決定決定 ))

Country-related issues Product-related issues Government policy/political risk Organizational issues

Materials ManagementMaterials Management(( 材料管理材料管理 ))

Flow of materials Transportation options and speed Inventory levels Packaging Storage

Defining Global OperationsDefining Global Operations(( 定義全球性操作定義全球性操作 ))

International business ( 國際化企業 )- engages in cross-border transactions

Multinational Corporation( 多國籍企業 ) - has extensive involvement in international business, owning or controlling facilities in more than one country

Global company( 全球化企業 ) - integrates operations from different countries, and views world as a single marketplace

Transnational company( 超越國際企業 )- seeks to combine the benefits of global-scale efficiencies with the benefits of local responsiveness

Reasons to Globalize OperationsReasons to Globalize Operations((全球化操作的理由全球化操作的理由 ))

Reduce costs (labor, taxes, tariffs, etc.) Improve the supply chain Provide better goods and services Attract new markets Learn to improve operations Attract and retain global talent

Tangible

Intangible

Achieving Global OperationsAchieving Global Operations- Four Considerations –- Four Considerations –獲得全球化操作獲得全球化操作

--要考慮的四個因素要考慮的四個因素 -- Global product design Global process design and technology Global factory location analysis Impact of Culture and Ethics

GlobalGlobalPProduct Designroduct Design全球產品設計全球產品設計

Remember social and cultural differences packaging and marketing can help make product seem

“domestic” but - “liter” versus “quart” “sweetness” and “taste”

GlobalGlobal Process Design and Technology Process Design and Technology全球產品設計及技術全球產品設計及技術

Information technology enables management of integrated, globally dispersed operation

Texas Instruments: 50 plants in 19 countries Hewlett-Packard - product development teams in

U.S., Japan, Great Britain, and Germany Reduces time-to-market

GlobalGlobal全球全球 Facility Location AnalysisFacility Location Analysis

便利位置分析便利位置分析

Select CSFs based on parent organization;’s strategic or operations objectives

Obtain country-specific information on the CSFs Evaluate each country’s CSFs using a 1 (bad) to

5 (good) rating scale Sum the ratings * CSF: Critical Success Factors

Using CSFs for Country Selection

You May Wish To ConsiderYou May Wish To Consider你可以想作是你可以想作是

national literacy rate rate of innovation rate of technology change number of skilled workers stability of government product liability laws export restrictions similarity in language

work ethic tax rates inflation availability of raw materials interest rates population number of miles of highway

GlobalGlobal全球全球Impact of Culture and EthicsImpact of Culture and Ethics文化與道德的衝突文化與道德的衝突

Cultures differ! Some accept/expect: variations in punctuality long lunch hours expectation of thievery bribery little protection of intellectual property

To Establish Global ServicesTo Establish Global Services建立全球的服務建立全球的服務

Determine if sufficient people or facilities exist to support the service

Identify foreign markets that are open - not controlled by governments

Determine what services are of most interest to foreign customers

Determine how to reach global customers

Managing Global Service Managing Global Service OperationsOperations

管理全球服務操作管理全球服務操作Must take a different perspective on Capacity planning Location Planning Facilities design and layout Scheduling

Some DefinitionsSome Definitions

International business( 國際企業 ) A firm that engages in cross-border transactions.

Multinational Corporation (MNC)( 多國籍企業 ) A firm that has extensive involvement in international

business, owning or controlling facilities in more than one country

Some Global StrategiesSome Global Strategies(( 全球策略全球策略 ))

International Strategy( 國際化策略 ): uses exports and licenses to penetrate the global area

Multidomestic Strategy( 在地化策略 ): uses decentralized authority with substantial autonomy at each business

Global Strategy( 全球策略 ): Uses a high degree of centralization, with headquarters coordinating to seek standardization and learning between plants

Transnational Strategy( 超越國界的策略 ): Exploits economies of scale and learning, as well as pressure for responsiveness, by recognizing that core competencies reside everywhere in the organization

Developing Missions and Developing Missions and StrategiesStrategies

任務和決策的發展任務和決策的發展

MissionMission(( 使命、任務使命、任務 ))

Mission - where are you going? Organization’s purpose for being Provides boundaries & focus Answers ‘What do we provide

society?’

© 1995 Corel Corp.

Mission of FedExMission of FedExFedEx is committed to our People-Service-Profit philosophy.

We will produce outstanding financial returns by providing total reliable, competitively superior, global air-ground

transportation of high priority goods and documents that require rapid, time-certain delivery. Equally important,

positive control of each package will be maintained using real time electronic tracking and tracing systems. A

complete record of each shipment and delivery will be presented with our request for payment. We will be helpful, courteous, and professional to each other and the public.

We will strive to have a completely satisfied customer at the end of each transaction.

Sample Mission - MerckSample Mission - Merck

The mission of Merck is to provide society with superior products and services - innovations and solutions that

improve the quality of life and satisfy customer needs - to provide employees with meaningful work and

advancement opportunities and investors with a superior rate of return

Mission of the Hard Rock CaféMission of the Hard Rock Café

To spread the spirit of Rock ‘n’ Roll by delivering an exceptional entertainment and dining experience. We are committed to being an important, contributing member of our community and offering the Hard Rock family a fun, healthy, and nurturing work environment while ensuring

our long-term success.

Factors Affecting MissionFactors Affecting Mission使命的影響因素使命的影響因素

Mission 使命

Philosophy 哲學 &Values 價值

Profitability 利益& Growth 成長Environment 環境

Customers 顧客Public Image大眾的想法

Benefit toSociety

Mission/StrategyMission/Strategy 使命使命 //決策決策

Mission - where you are going 哪裡你要去

Strategy - how you are going to get there; an action plan 如何到那裡，ㄧ個行動的計畫

StrategyStrategy 決策決策

Action plan to achieve mission

Shows how mission will be achieved

Company has a business strategy

Functional areas have strategies © 1995 Corel Corp.

Strategy ProcessStrategy Process 決策過程決策過程

MarketingDecisions市場決定

OperationsDecisions操作者決定

Fin./Acct.Decisions財會決定

CompanyMission 公司使命

BusinessStrategy 企業決策

Functional AreaFunctional AreaStrategies 決策發展的區域

Strategies for Competitive Strategies for Competitive AdvantageAdvantage

決策對競爭的好處決策對競爭的好處 Differentiation 差異化

Cost leadership 價格領導

Quick response 反應快

Competing on DifferentiationCompeting on Differentiation差異化的競爭差異化的競爭

Uniqueness can go beyond both the physical characteristics and service attributes to

encompass everything that impacts customer’s perception of value

Competing on CostCompeting on Cost價格的競爭價格的競爭

Provide the maximum value as perceived by customer

Does not imply low value or low quality

Competing on ResponseCompeting on Response反應者的競爭反應者的競爭

Flexibility Reliability Timeliness

Requires institutionalization within the firm of the ability to respond

Competing, Regardless of the Basis,Competing, Regardless of the Basis,競爭，不顧基礎競爭，不顧基礎

Requires the institutionalization within the firm of the ability to change, and to adapt

OM’s Contribution to StrategyOM’s Contribution to Strategy操作管理對決策的貢獻操作管理對決策的貢獻

Response(Faster)

Quality

Product

Process

Location

Layout

Human Resource

Supply Chain

Inventory

Scheduling

Maintenance

HP’s ability to follow the printer market

Differentiation(Better)

Cost leadership(Cheaper)

Southwest Airlines No-frills service

Sony’s constant innovation of new products

Pizza Hut’s five-minute guarantee at lunchtimeFederal Express’s “absolutely, positively on time”

Motorola’s automotive products ignition systemsMotorola’s pagers

IBM’s after-sale service on mainframe computers

Fidelity Security’s broad line of mutual funds

FLEXIBILITY

DesignVolume

LOW COST

DELIVERY

SpeedDependability

QUALITY

ConformancePerformance

AFTER-SALE SERVICE

BROAD PRODUCT LINE

Operations Decisions Examples Specific

Strategy UsedCompetitive Advantage

10 Strategic OM Decisions10 Strategic OM Decisions(( 策略性作業管理的決策策略性作業管理的決策 ))

Goods & service design ( 商品與服務設計 ) Quality ( 品質 ) Process & capacity design( 製程與産能設計 ) Location selection( 廠 / 店址選擇 ) Layout design( 佈置設計 ) Human resource and job design ( 人力資源與工作設計 ) Supply-chain management ( 供應鏈管理 ) Inventory ( 存貨 ) Scheduling ( 批程 ) Maintenance ( 保養維護 )

Operations Decisions

(作業決策)

Goods(商品) Services(복務)

Goods & services decisions

Product is usually tangible

Product is usually intangible

Quality Objective quality standards

Subjective quality standards

Process and capacity design

Customer not involved in most of process

Customer may be directly involved in process. Capacity must match demand to avoid lost sales

Goods & Services and the 10 OM Goods & Services and the 10 OM Decisions(Decisions( 商品與服務間的差商品與服務間的差 ))


Goods Services

Location Selection

May need to be near raw materials or labor force

Product is usually intangible

Layout Design

Layout can enhance production efficiency

Subjective quality standards

Human Resources and Job Design

Workforce focused on technical skills. Labor standards consistent. Output-based wage system.

Customer may be directly involved in process. Capacity matches demand to avoid lost sales

Goods & Services and the 10 OM Goods & Services and the 10 OM Decisions – ContinuedDecisions – Continued


Goods Services

Supply chain management

Supply-chain relationships critical to final product

Supply-chain relationships important, not necessarily critical

Inventory Raw materials, work-in-process, and finished goods

Most services cannot be stored

Scheduling Ability to convert inventory may allow leveling of production rates

Primarily concerned with meeting the customer's immediate schedule




Goods Services

Maintenance Maintenance is often preventive and takes place at the production site

Maintenance is often "repair" and takes place at the customer's site

Process Design(Process Design( 製程設計製程設計 ))

Low Moderate HighVolume( 産量 )

High

Moderate

Low

Varie

ty o

f Pro

duct

s

Process-focusedJob Shops

(Print shop, emergencyroom , machine shop,

fine diningRepetitive (modular)

focusAssembly line

(Cars, appliances, TVs, fast-food restaurants) Product-focused

Continuous(steel, beer, paper, bread, institutional

kitchen)

Mass Customization

Customization at high Volume

(Dell Computer’s PC)

Operations Strategies for Two Operations Strategies for Two Drug CompaniesDrug Companies

((作業決策對二藥品公司的影響作業決策對二藥品公司的影響 ))

Brand Name Drugs, Inc.

Generic Drug Corp.

Product Selection and Design

Heavy R & D; Extensive labs; focus on development in broad range of \drug categories

Low R & D investment; focus on development of generic drugs

Quality Quality is a major priority; Standards exceed regulatory requirements

Meets regulatory requirements on a country-by-country basis as necessary

Operations Strategies for Two Operations Strategies for Two Drug Companies - ContinuedDrug Companies - Continued


Generic Drug Corp.

Process Product & modular production processes Long product runs in specialized facilities Build capacity ahead of demand

Process focused General production processes; “Job Shop” approach, short run; Focus on high utilization

Location Still located in city in which it was founded

Recently moved to low tax, low labor cost environment

Scheduling Central production planning

Many short run products complicate scheduling



Generic Drug Corp.

Human Resources

Hires the best; nation-wide searches

Very experienced top executives provide direction; other personnel paid below average

Supply Chain

Long term supplier relationship

Tends to purchase competitively to find bargains

Inventory Maintains high finished goods inventory, primarily to ensure all demands are met

Process focus drives up WIP inventory. Finished goods inventory tends to be low



Generic Drug Corp.

Maintenance Highly trained staff; Extensive parts inventory

Highly trained staff to meet challenging demands

Characteristics of High ROI FirmsCharacteristics of High ROI Firms高高 ROIROI堅硬結構的特色堅硬結構的特色

High quality product High capacity utilization High operating effectiveness Low investment intensity Low direct cost per unit

From the PIMS study of the Strategic Planning Institute

Strategic Options Managers Use to Strategic Options Managers Use to Gain Competitive AdvantageGain Competitive Advantage

決策操作管理者的使用決策操作管理者的使用以增加競爭力以增加競爭力

28% - Operations Management 18% - Marketing/distribution 17% - Momentum/name recognition 16% - Quality/service 14% - Good management 4% - Financial resources 3% - Other

Strategic Options Managers Use Strategic Options Managers Use to Gain Competitive Advantageto Gain Competitive Advantage

28% Operations Management 操作管理 Low- cost product Product-line breadth Technical superiority Product characteristics/differentiation Continuing product innovation Low-price/high-value offerings Efficient, flexible operations adaptable to consumers Engineering research development Location Scheduling

Preconditions Preconditions 之前狀況之前狀況 --

To Implement a StrategyTo Implement a Strategy 決策工具決策工具One must understand:

Strengths & weaknesses of competitors and new entrants into the market

Current and prospective environmental, legal, and economic issues

The notion of product life cycle Resources available with the firm and within the OM

function Integration of OM strategy with company strategy and

with other functions.

Impetus for Strategy ChangeImpetus for Strategy Change決策改變的原動力決策改變的原動力

Changes in the organization 組織改變 Stages in the product life cycle 產品生命週期改變 Changes in the environment 環境改變

Stages in the Product Life CycleStages in the Product Life Cycle

Introduction 引導期

Growth 成長期

Maturity 成熟期 Decline

死亡期

Gro

wth

rate

Best period to increase market shareR&D engineering are critical

Product design and development are criticalFrequent product and process design changesOver-capacityShort production runsHigh skilled-labor contentHigh production costsLimited number of modelsUtmost attentions to qualityQuick elimination of market-revealed design defects

Introduction

Strategy & Issues During Product LifeStrategy & Issues During Product Life

Company Strategy & Issues

OM Strategy & Issues


Practical to change prices or quality imageMarketing is criticalStrengthen niche

Forecasting is criticalProduct and process reliabilityCompetitive product improvements and optionsShift toward product orientedEnhance distribution

Company Strategy

& Issues


Growth


Poor time to increase market shareCompetitive costs become criticalPoor time to change price, image, or qualityDefend position via fresh promotional and distribution

approaches

StandardizationLess rapid product changes and more minor annual model

changesOptimum capacityIncreasing stability of manufacturing processLower labor skillsLong production runsAttention to product improvement and cost cuttingRe-examination of necessity of design compromises

Company Strategy

& Issues


Maturity


Cost control critical to market share

Little product differentiationCost minimizationOvercapacity in the industryPrune line to eliminate items not returningGood marginReduce capacity

Company Strategy & Issues


Decline

Strategy and Issues During a Strategy and Issues During a Product’s LifeProduct’s Life

在產品生命期間產生的策略與問題在產品生命期間產生的策略與問題

Strategy Development and Strategy Development and ImplementationImplementation策略的發展與執行策略的發展與執行

Identify critical success factors Build and staff the organization

SWOT Analysis ProcessSWOT Analysis Process(( 策略發展的過程策略發展的過程 ))

Environmental Analysis( 環境分析 )

Determine Corporate Mission( 決定公司使命 )

Form a Strategy( 決策的架構 )

SWOT Analysis to Strategy SWOT Analysis to Strategy FormulationFormulation

Strategy 策略

Mission 使命

ExternalOPportunities 機會

InternalSTrengths 強勢

InternalWEaknesses 弱勢

ExternalTHreats 威脅

CompetitiveAdvantage

Identifying Identifying CrCritical Success Factorsitical Success Factors定義關鍵的成功因子定義關鍵的成功因子

Decisions Sample Option ChapterProduct Customized, or standardized 5Quality Define customer expectations and how to achieve them 6, S6Process Facility size, technology, capacity 7, S7Location Near supplier or customer 8Layout Work cells or assembly line 9Human resource Specialized or enriched jobs 10, S10Supply chain Single or multiple source suppliers 11, S11Inventory When to reorder, how much to keep on hand 12, 14,16Schedule Stable or fluctuating productions rate 13, 15Maintenance Repair as required or preventive maintenance 17

MarketingServiceDistributionPromotionChannels of distributionProduct positioning (image, functions)

Finance/AccountingLeverageCost of capitalWorking capitalReceivablesPayablesFinancial controlLines of credit

Production/Operations

Activity Mapping: Southwest Airline’s Activity Mapping: Southwest Airline’s Low Cost Competitive AdvantageLow Cost Competitive Advantage

Courteous, but limited passenger service

Lean, productive employees

Short haul, point-to-point routes, often to secondary

airports

High aircraft utilization

Standardized fleet of Boeing 737 aircraft

Frequent, reliable schedules

Competitive Advantage:Low Cost



No seat assignmentsNo baggage transfersAutomated ticketing machinesNo meals



airports

Lower gate costs at secondary airports

High number of flights, reduces employee idle time between flights



High number of flights reduces employee idle time between flightsSaturate a city with flights lowering administrative costs per passenger for that city



Pilot training on only one type of aircraftReduced maintenance inventory required because of only one type of aircraftExcellent supplier relations with Boeing has aided financing



Flexible employees and standard planes aids schedulingFlexible union contractsMaintenance personnel trained on only one type of aircraft20 minute gate turnarounds



High level of stock ownershipHire for attitude, then trainHigh employee compensationEmpowered employeesAutomated ticket machines





airports




Competitive Advantage:Low Cost

Southwest Airline’s Low Cost Southwest Airline’s Low Cost Competitive AdvantageCompetitive Advantage

Vanguard’s Activity SystemVanguard’s Activity System

A broad array of mutual funds excluding some fund

categories

Efficient investment management approach offering good consistent

performance

Straightforward client communication and

education

Strict cost control

Direct distributions

Very low expenses

passed on to client

How It WorksHow It Works

CompanyMission

BusinessStrategy

Functional AreaStrategies

MarketingDecisions

OperationsDecisions

Fin./Acct.Decisions

If competitive advantage, leads to achieving

Distinctive competencies affect

Four International Operations Four International Operations Strategies(Strategies( 四種國際化作業策四種國際化作業策

略略 ))

Multidomestic StrategyMultidomestic Strategy(( 在地化策略在地化策略 ))

Operating decisions are decentralized to each country to enhance local responsiveness

Global StrategyGlobal Strategy(( 全球化策略全球化策略 ))

Operating decisions are centralized and headquarters coordinates the standardization

and learning between facilities

Transnational StrategiesTransnational Strategies((超越國際的策略超越國際的策略 ))

Combines the benefits of global-scale efficiencies with the benefits of local responsiveness

International StrategyInternational Strategy((國際化的策略國際化的策略 ))

Global markets are penetrated using exports and licenses

operations management operations strategy in a global environment 全球環境下的作業策略...

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