2.0 HTM 209 – OM Performance and Strategy 290814
-
Upload
michellendsulochana -
Category
Documents
-
view
216 -
download
0
Transcript of 2.0 HTM 209 – OM Performance and Strategy 290814
-
7/23/2019 2.0 HTM 209 OM Performance and Strategy 290814
1/72
HTM209 Hospitality
Operations Management
Semester Two - 2014
-
7/23/2019 2.0 HTM 209 OM Performance and Strategy 290814
2/72
Welcome to HTM209
Hospitality Operations Management
Tutor : Julian Galt
Room : B2-24
E mail : [email protected]
-
7/23/2019 2.0 HTM 209 OM Performance and Strategy 290814
3/72
HTM209 Operations Management;Performance and Strategy
-
7/23/2019 2.0 HTM 209 OM Performance and Strategy 290814
4/72
Operations PerformanceRefer Slack et al. Pages 37 - 44
Operations management can make or break...!!
Compare the operations processes and outcomes for
the commissioning of the two terminals; Heathrow T5: processes, and outcomes; with...
Dubai T3: processes, and outcomes
What lessons for OM may be derived from
these examples...?
-
7/23/2019 2.0 HTM 209 OM Performance and Strategy 290814
5/72
Performance Objectives #4Refer Slack et al. Page 645
Objectives, plans, and progress may be assessed, based on
polar representations...;
-
7/23/2019 2.0 HTM 209 OM Performance and Strategy 290814
6/72
Polar diagrams for relative importance of performance
objectives for a taxi service versus a bus service
Cost
Quality Flexibility
DependabilitySpeed
-
7/23/2019 2.0 HTM 209 OM Performance and Strategy 290814
7/72
Reassurance
Crime
reduction
Crimedetection
Working withcriminal justiceagencies
Efficiency
Polar diagrams for a proposed police performance targets
-
7/23/2019 2.0 HTM 209 OM Performance and Strategy 290814
8/72
Performance Objectives #1Refer Slack et al. Page 60
Polar representations...;
Compare the uses of the polar diagrams in Fig 2.11,
on page 60
Sketch out a polar diagram that compares the
terminal openings for Heathrow T5, and Dubai T3.
Use the following criteria for your scales; Dependability
Baggage handling
Effectiveness
Process planning
Complexity
Expectations
-
7/23/2019 2.0 HTM 209 OM Performance and Strategy 290814
9/72
Operations Management: the story so far...
Input Resources
Output; Services
Products
Operations Management Processes...;
Inputs transformations - Outputs
Operations Activities
4 Ds: Direct: Design: Deliver: Develop
Operations Process Characteristics
4 Vs: Volume; Variety; Variation; Visibility
Productivity =Units produced
Input used
Operations Objectives and Strategies
-
7/23/2019 2.0 HTM 209 OM Performance and Strategy 290814
10/72
Measure of process improvement
Represents output relative to input
Only through productivity increasescan our standard of living improve
Judging Performance #1
Productivity =Units produced
Input used
From Heizer and Render 2011 PearsonEducation, Inc. publishing as Prentice Hall
-
7/23/2019 2.0 HTM 209 OM Performance and Strategy 290814
11/72
Judging Performance #2
Objectives, plans, and progress may be assessed, based on
polar representations...;
-
7/23/2019 2.0 HTM 209 OM Performance and Strategy 290814
12/72
Assessing an Organisations
Performance
Refer Slack et al. Pages 37 - 44
Operations management can make or break...!!
Triple Bottom Line...; define the three elements
How may effective OM contribute to profitability? What lessons may be drawn from Table 2.1, on page 42?
Explain the role of organisation culture in OM?
What advice may be derived from Table 2.2, page 42?
How may OM contribute to stakeholder interests?
Contribution to corporate social responsibility
(CSR)?
-
7/23/2019 2.0 HTM 209 OM Performance and Strategy 290814
13/72
Assessing an Organisations
Performance; 1-A
Refer Slack et al. Pages 37 - 44
Triple Bottom Line...; define the three elements; Social - responsibility for impact on society; impact on
peoples lives (People)
Environmental Extent to which business activity impacts
negatively on the planet (Planet)
Economic Profitability, return on assets (Profit)
Reduction of production costs
Achievement of customer satisfaction
Reduce risk of failure
Reduce the level of capital employed by increasing capacity
and building capability
-
7/23/2019 2.0 HTM 209 OM Performance and Strategy 290814
14/72
Assessing an Organisations
Performance; 1-B
Refer Slack et al. Pages 37 - 44 How may effective OM contribute to profitability?
Lessons drawn from Table 2.1, on page 42. OM results
in greater profitability in contexts where there is:
Staff involvement Flexible staff management
Waste is reduced
Work is efficient
The role of organisation culture in OMA participative
culture is more likely to be productive that a rigid andcontrolling culture
What advice may be derived from Table 2.2, page 42?
Reducing operating costs may be more effective for
improving profitability than increasing sales or prices
-
7/23/2019 2.0 HTM 209 OM Performance and Strategy 290814
15/72
Assessing an Organisations
Performance; 1-C
Refer Slack et al. Pages 37 - 44 How may OM contribute to stakeholder interests?
It is the responsibility of OM to understand the internal and
external stakeholders objectives and respond appropriately
Stakeholders have differing requirements
Shareholders ROI
Staff fair wages
Suppliers long term orders
Contribution to corporate social responsibility (CSR)? Related to Triple Bottom Line
Essentially, listening and responding to the needs of the
business stakeholders
Sustainable development
-
7/23/2019 2.0 HTM 209 OM Performance and Strategy 290814
16/72
Competitive factorsWhat do customers value?
Performance objectivesPriority actions: Ascot/Kelvin
A - Low price
B - High quality
C - Fast delivery
D - Reliable delivery
E - Innovative products / services
F - Wide range of products / services
G - Ability to change the timing or
quantity of products and services
Performance Objectives:Assign priority order to these hotel competitive factors (AG)
For the top three priorities how might these be delivered?
-
7/23/2019 2.0 HTM 209 OM Performance and Strategy 290814
17/72
Competitive factorsWhat do customers value?
Performance objectivesPriority actions: SITs Cafe
A - Low price
B - High quality
C - Fast delivery
D - Reliable delivery
E - Innovative products / services
F - Wide range of products / services
G - Ability to change the timing or
quantity of products and services
Performance Objectives:Assign priority order in this context (AG)
For the top three priorities how might these be delivered?
-
7/23/2019 2.0 HTM 209 OM Performance and Strategy 290814
18/72
Different competitive factors imply different
performance objectives
Competitive factors
If the customers value these..
Performance objectives
Then, the operations will need toexcel at these ...
Low price Cost
High quality Quality
Fast deliverySpeed
Reliable delivery Dependability
Innovative products and services Flexibility (products and services)
Wide range of products and services Flexibility (mix)
Ability to change the timing or quantityof products and services
Flexibility (volume and/or delivery)
Performance Objectives #1-1
-
7/23/2019 2.0 HTM 209 OM Performance and Strategy 290814
19/72
Speed
Flexibility
Cost
Dependability
Quality
The operations function can provide a competitive
advantage through its performance with the five
competitive objectives
Being RIGHT
Being FAST
Being ON TIME
Being ABLE TO
CHANGE
Being PRODUCTIVE
Performance Objectives #1-2
-
7/23/2019 2.0 HTM 209 OM Performance and Strategy 290814
20/72
Minimum cost,
maximum value
Minimum price, highest value
Fastthroughput
Quick
delivery
Reliableoperation
Dependable
delivery
Error-free
processes
Error-free
products and
services
Ability to
change
Frequent new
products, maximum
choice
The benefits of excelling
Dependability
Cost
Speed
Quality Flexibility
Performance Objectives #1-3
-
7/23/2019 2.0 HTM 209 OM Performance and Strategy 290814
21/72
Operations Management: the story so far...
Input Resources
Output; Services
Products
Operations Management Processes...;
Inputs transformations - Outputs
Operations Activities
4 Ds: Direct: Design: Deliver: Develop
Operations Process Characteristics
4 Vs: Volume; Variety; Variation; Visibility
Productivity =Units produced
Input used
Operations Objectives and Strategies
Operations Performance Objectives...;
Quality; Speed; Dependability;
Flexibility; Cost
-
7/23/2019 2.0 HTM 209 OM Performance and Strategy 290814
22/72
Performance Objectives #2Refer Slack et al. Pages 46 - 59
Objective Role Significance Business
Advantage
Quality
Speed
Dependability
Flexibility
Cost
-
7/23/2019 2.0 HTM 209 OM Performance and Strategy 290814
23/72
Performance Objectives #2-ARefer Slack et al. Pages 46 - 59
Objective Role Significance BusinessAdvantage
Quality Conforming to customerexpectations. Error free
products and services
Influences customer
satisfaction levels
Assists OM efficiency
Reduces costs
Assists with
dependability
Speed Increasing availability ofproduct or service
Customers are morelikely to purchase
Response time benefit
Reduces inventories,risks, matches supply
with demand
Dependability Product / service is whenand as needed and
promised
Provides competitive
advantage. Overrides
other customer
considerations
Saves time, increases
stability, &
effectiveness. Saves
money, waste
Flexibility Making changes tooperations product,
mix, volume, delivery
Allows for
customisation and
variety
Saves time, increases
speed, assists
scheduling
Cost Allowing outputs to bepriced to meet market
Costs saved may be
added into profits.
Universally attractive
Lower costs allow
lower prices.
-
7/23/2019 2.0 HTM 209 OM Performance and Strategy 290814
24/72
Performance Objectives #3Refer Slack et al. Pages 56 - 57
Objectives and progress may be assessed, based onproductivity...; i.e.: Output from operation/input to operation...
-
7/23/2019 2.0 HTM 209 OM Performance and Strategy 290814
25/72
Performance Objectives #3 -1Refer Slack et al. Pages 58 - 60
Discuss and prepare to report back as follows:
What key approaches are used by business to
improve productivity? Identify examples.
How might productivity be improved by OM within...: A motel?
A cafe-bar?
A hotel airport shuttle service?
(Note how will you: reduce costs; maintain outputs;
reduce waste: materials, time, underuse of facilities?
-
7/23/2019 2.0 HTM 209 OM Performance and Strategy 290814
26/72
Performance Objectives #3 -1Refer Slack et al. Pages 58 - 60
Discuss and prepare to report back as follows:
With reference to Figure 2.10 on page 58
Identify examples of competing tensions between theperformance objectives illustrated
Why is it necessary to improve all performance areas
in order to improve cost performance?
-
7/23/2019 2.0 HTM 209 OM Performance and Strategy 290814
27/72
http://www.google.co.nz/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=fhh2e2MZGBNyaM&tbnid=_tvzg7abamTQpM:&ved=0CAUQjRw&url=http://www.andertoons.com/cartoon-blog/2012/08/business-cartoons-you-dont-want-in-your-employees-cubicles.html&ei=arOSUtekLcKWkwX8wIAw&bvm=bv.56988011,d.dGI&psig=AFQjCNFa1n0h1lH4kvtACACXx2t1fCxhRQ&ust=1385432256824914http://www.google.co.nz/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=fhh2e2MZGBNyaM&tbnid=_tvzg7abamTQpM:&ved=0CAUQjRw&url=http://www.andertoons.com/cartoon-blog/2012/08/business-cartoons-you-dont-want-in-your-employees-cubicles.html&ei=arOSUtekLcKWkwX8wIAw&bvm=bv.56988011,d.dGI&psig=AFQjCNFa1n0h1lH4kvtACACXx2t1fCxhRQ&ust=1385432256824914 -
7/23/2019 2.0 HTM 209 OM Performance and Strategy 290814
28/72
OM Frame of Reference - Test
Input Resources
Output; Services
Products
OM - Qu3: (Element name)? ...;
Inputs transformations - Outputs
Qu4: Operations... (Element name)?
4 Ds: Qu5: Name them...
Qu6: Operations... (Element name)?
4 Vs: Qu7: Name them...
Qu8: Measure of what? =Units produced
Input used
Ops Objectives Qu9: Define Strategies
Operations Performance Objectives...;
Qu10: Name them...
-
7/23/2019 2.0 HTM 209 OM Performance and Strategy 290814
29/72
Operations Management: Frame of Reference
Input Resources
Output; Services
Products
Operations Management Processes...;
Inputs transformations - Outputs
Operations Activities
4 Ds: Direct: Design: Deliver: Develop
Operations Process Characteristics
4 Vs: Volume; Variety; Variation; Visibility
Productivity =Units produced
Input used
Operations Objectives and Strategies
Operations Performance Objectives...;
Quality; Speed; Dependability;
Flexibility; Cost
-
7/23/2019 2.0 HTM 209 OM Performance and Strategy 290814
30/72
Operations Performance Objectives;Application to Penang Mutiara...#1
With reference to the case study on pages 64
and 65, consider and discuss in your groups,
and then note for the following points; Hotel location, features and environment
Develop a response to question 1 at the end of
the case-study
Hotel operating characteristics (quality,flexibility, dependability, time, costs)
Develop a response to question 2 at the end of
the case-study
-
7/23/2019 2.0 HTM 209 OM Performance and Strategy 290814
31/72
Operations Performance Objectives;Application to Penang Mutiara...#1-1A
With reference to the case study on pages 64 and 65;
Hotel location, features and environment
Malaysia; top of market, luxury 440 room hotel; lush
Indian Ocean coastal location;
Response to question 1, (at the end of the case-study)
Competes as a luxury operation; so must be managed to
ensure service, equipment, design, facilities all support a
top quality experience for guests
Never compromising any of the performance objectivesand outcomes. Careful planning, anticipation of problems
Balancing all POs to ensure quality is never reduced in
order to maintain competitive advantage as top-of-line...
-
7/23/2019 2.0 HTM 209 OM Performance and Strategy 290814
32/72
Operations Performance Objectives;Application to Penang Mutiara...#1-2A
With reference to the case study on pages 64 and 65;
Hotel operating characteristics
Quali ty - Highest priority; every aspect of OM supports this
Flexibi l i ty Meeting guest requests immediately. Never saying
No. Adjusting to seasonal demands. Having appropriate staff incontact with customers.
Dependabi l i ty All guest needs met reliably. Everything to plan
T ime Speedy responses to customer demands
Costs Reducing waste wherever possible (food, energy) Response to question 2 at the end of the case-study...
Quality of service keeps our volumes high and costs low
All performance objectives contribute to achievement of quality
and cost reduction: high room utilisation levels lead to profitability
-
7/23/2019 2.0 HTM 209 OM Performance and Strategy 290814
33/72
Performance Objectives #3 - 2Refer Slack et al. Pages 57 - 60
What Operations Management dilemma is
illustrated in the case on page 57? What has been the operations objective of Foxconn...?
How has this been achieved? Impact on the TBL?
What negative consequences appear to have
occurred?
How has the company attempted to minimise theproblem?
If you were asked to provide advice on this what
would it be?
-
7/23/2019 2.0 HTM 209 OM Performance and Strategy 290814
34/72
Performance Objectives #3 - 2Refer Slack et al. Pages 57 - 60
Operations Management dilemma (page 57)
Key objective of Foxconn...: Cutting of operational costs
How achieved:
Production has been moved to low labour cost regions
Impact on the TBL: Pushing workers very hard. Manyovertime hours utilised.
Negative consequences that appear to have occurred:
Regimented operation. 18 suicide attempts 2010; 14 fatal
Company attempts to minimise the problem:
Safety nets; provide counselling; advanced process design
Your advice on this: (Is the cause-effect conclusion correct?)
-
7/23/2019 2.0 HTM 209 OM Performance and Strategy 290814
35/72
STRATEGY
Operations Management
-
7/23/2019 2.0 HTM 209 OM Performance and Strategy 290814
36/72
What is strategy?
Strategic decisions means those decisions which
Are widespread in their effect on the organization
to which the strategy refers
Define the position of the organization relative to
its environment
Move the organization closer to its long-termgoals.
Slack et al. (2013)
-
7/23/2019 2.0 HTM 209 OM Performance and Strategy 290814
37/72
Slack et al. (2013)
the decisions which shape the long-term
capabilities ofthe companys operations andtheir contribution to overall strategy through
the on-going reconciliation of market
requirements and operations resources
Operations strategy is ..;
-
7/23/2019 2.0 HTM 209 OM Performance and Strategy 290814
38/72
-
7/23/2019 2.0 HTM 209 OM Performance and Strategy 290814
39/72
Operationsis not the same as
operational
Operations are the resources that create
products and services
Operational is the opposite of strategic,
meaning day-to-day and detailed
So, one can examine both the operational andthe strategic aspects of operations
Slack et al. (2013)
-
7/23/2019 2.0 HTM 209 OM Performance and Strategy 290814
40/72
Microlevel of the process
Macrolevel of the total operation
Level of
analysis
Time scale
Short-termfor example, capacity
decisions
1-12 monthsDema
nd
1-10 yearsDema
nd
Long-termfor example, capacity
decisions
Level of
aggregation
Detailed
For example
Can we give tax services to the
small business market in
Antwerp?
Aggregated
For example
What is our overall business
advice capability compared with
other capabilities?
Level ofabstraction
ConcreteFor example
How do we improve our
purchasing procedures?
PhilosophicalFor example
Should we develop strategic
alliances with suppliers?
Operations management Operations strategy
Operations strategy is different to OM; note and explain
the key differences from the graphic above Slack et al. (2013)
-
7/23/2019 2.0 HTM 209 OM Performance and Strategy 290814
41/72
Purposes of Operations Strategy
To contribute directly to the strategic
objectives of the next level up in the
planning hierarchy; To help other parts of the business
make their own contribution to
operations strategy
Slack et al. (2013)
-
7/23/2019 2.0 HTM 209 OM Performance and Strategy 290814
42/72
What is Operations Strategy?Refer Slack et al. Pages 70 - 71
Strategy has a focus on....(what)?
Operations strategy may be differentiated from
organisation strategy in what ways?
Define and explain the three stages of
operations managements contribution to
business strategy...;
Implementing Supporting
Driving
-
7/23/2019 2.0 HTM 209 OM Performance and Strategy 290814
43/72
Microlevel of the process
Macrolevel of the total operation
Level of
analysis
Time scale
Short-termfor example, capacity
decisions
1-12 monthsDema
nd
1-10 yearsDema
nd
Long-termfor example, capacity
decisions
Level of
aggregation
Detailed
For example
Can we give tax services to the
small business market in
Antwerp?
Aggregated
For example
What is our overall business
advice capability compared with
other capabilities?
Level ofabstraction
ConcreteFor example
How do we improve our
purchasing procedures?
PhilosophicalFor example
Should we develop strategic
alliances with suppliers?
Operations management Operations strategy
Operations strategy is different to OM; note and explain
the key differences from the graphic above Slack et al. (2013)
-
7/23/2019 2.0 HTM 209 OM Performance and Strategy 290814
44/72
What is Operations Strategy? PP 70 - 71
Operations strategy focus: Decisions and actions setting the role, objectives and
activities of the business; contrasts with...;
Organisation strategy: Defines position of organisation rel. to its environment:
moving organisation toward its goals
Define and explain the three stages of operations
managements contribution to business strategy...;
Implementing: Basic OM role; effective implementation
Supporting: Developing improved OM capabilities
Driving: Where OM success creates long term competitiveadvantage; operations drive organisation strategy...
http://www.google.co.nz/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&docid=jVAAdlW1wO8ZfM&tbnid=0NK14csXDrahkM:&ved=0CAUQjRw&url=http://dearrichblog.blogspot.com/2013/10/how-do-you-remove-blog-from-ban-list.html&ei=g9j6U-WMHM658gXqs4C4Dw&psig=AFQjCNH5LxNaJiTpnfSxW_f2pubv05ORRA&ust=1409034659899625http://www.google.co.nz/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&docid=jVAAdlW1wO8ZfM&tbnid=0NK14csXDrahkM:&ved=0CAUQjRw&url=http://dearrichblog.blogspot.com/2013/10/how-do-you-remove-blog-from-ban-list.html&ei=g9j6U-WMHM658gXqs4C4Dw&psig=AFQjCNH5LxNaJiTpnfSxW_f2pubv05ORRA&ust=1409034659899625http://www.google.co.nz/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&docid=jVAAdlW1wO8ZfM&tbnid=0NK14csXDrahkM:&ved=0CAUQjRw&url=http://dearrichblog.blogspot.com/2013/10/how-do-you-remove-blog-from-ban-list.html&ei=g9j6U-WMHM658gXqs4C4Dw&psig=AFQjCNH5LxNaJiTpnfSxW_f2pubv05ORRA&ust=1409034659899625http://www.google.co.nz/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&docid=jVAAdlW1wO8ZfM&tbnid=0NK14csXDrahkM:&ved=0CAUQjRw&url=http://dearrichblog.blogspot.com/2013/10/how-do-you-remove-blog-from-ban-list.html&ei=g9j6U-WMHM658gXqs4C4Dw&psig=AFQjCNH5LxNaJiTpnfSxW_f2pubv05ORRA&ust=1409034659899625 -
7/23/2019 2.0 HTM 209 OM Performance and Strategy 290814
45/72
Lets Look at a Model...
...not that sort of
model!!!
Challenges Operationsthi t f d l!!!
http://www.google.co.nz/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&docid=jVAAdlW1wO8ZfM&tbnid=0NK14csXDrahkM:&ved=0CAUQjRw&url=http://dearrichblog.blogspot.com/2013/10/how-do-you-remove-blog-from-ban-list.html&ei=g9j6U-WMHM658gXqs4C4Dw&psig=AFQjCNH5LxNaJiTpnfSxW_f2pubv05ORRA&ust=1409034659899625http://www.google.co.nz/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&docid=jVAAdlW1wO8ZfM&tbnid=0NK14csXDrahkM:&ved=0CAUQjRw&url=http://dearrichblog.blogspot.com/2013/10/how-do-you-remove-blog-from-ban-list.html&ei=g9j6U-WMHM658gXqs4C4Dw&psig=AFQjCNH5LxNaJiTpnfSxW_f2pubv05ORRA&ust=1409034659899625http://www.google.co.nz/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&docid=jVAAdlW1wO8ZfM&tbnid=0NK14csXDrahkM:&ved=0CAUQjRw&url=http://dearrichblog.blogspot.com/2013/10/how-do-you-remove-blog-from-ban-list.html&ei=g9j6U-WMHM658gXqs4C4Dw&psig=AFQjCNH5LxNaJiTpnfSxW_f2pubv05ORRA&ust=1409034659899625http://www.google.co.nz/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&docid=jVAAdlW1wO8ZfM&tbnid=0NK14csXDrahkM:&ved=0CAUQjRw&url=http://dearrichblog.blogspot.com/2013/10/how-do-you-remove-blog-from-ban-list.html&ei=g9j6U-WMHM658gXqs4C4Dw&psig=AFQjCNH5LxNaJiTpnfSxW_f2pubv05ORRA&ust=1409034659899625 -
7/23/2019 2.0 HTM 209 OM Performance and Strategy 290814
46/72
Link strategy
with
operations
Give an
operations
advantage
Externally
supportive
Adopt
best
practice
Correct the
worstproblems
Internally
supportive
Externally
neutral
Internally
neutral
STAGE 1 STAGE 2 STAGE 3 STAGE 4
Stop holding
the
organisationback
Be as good
as
competitors
Be clearly
the best in
the
industry
Redefine the
industrys
expectations
Challenges
for operations
Operations
are expected
to be .
Hays and Wheelwrights 4-stage model (page 72)
...this sort of model!!!
Slack et al. (2013)
The role of operations can be defined b its aspirations
-
7/23/2019 2.0 HTM 209 OM Performance and Strategy 290814
47/72
Correct the
Worst
Problems
Internally
neutral
The role of operations can be defined by its aspirations
STAGE 1 STAGE 2 STAGE 3 STAGE 4
Stop holding
the
organisation
back
Adopt bestPractice
Externallyneutral
Be as good
as
competitors
Theability
toImplement
strategy
Link Strategy
With
Operations
Internally
supportive
Be clearly
the best in
the
industry
Theability
toSupportstrategy
Give an
Operations
Advantage
Externally
supportive
Redefine the
industrys
expectations
Theability
toDrive
strategySlack et al. (2013)
-
7/23/2019 2.0 HTM 209 OM Performance and Strategy 290814
48/72
Operations Strategy Contribution;Refer Slack et al. Pages 70 - 71
Review the Four Stage Model and
associated text on pages 71 and 72,
then note and prepare to report...
What is the purpose of the model?
Note briefly the development of operations
contribution at each of the four stages
How might a business judge the stage it is
operating at relative to the model?
At what stage is OM at Pret A Manger? (p18)
-
7/23/2019 2.0 HTM 209 OM Performance and Strategy 290814
49/72
-
7/23/2019 2.0 HTM 209 OM Performance and Strategy 290814
50/72
Corporate strategy
Business strategy
Emergent sense of what
the strategy should be
Operational
experience
Operations strategy
Top-down and bottom-up perspectives of strategySlack et al. (2013)
-
7/23/2019 2.0 HTM 209 OM Performance and Strategy 290814
51/72
Nigel Slack and Michael Lewis
2003
Performance
Objectives
Market
Positioning
Customer
Needs
Competitors
Actions
The market perspective on operations strategy
Required
performance
Understanding
markets
-
7/23/2019 2.0 HTM 209 OM Performance and Strategy 290814
52/72
Nigel Slack and Michael Lewis
2003
Operations
Strategy
Decision Areas
The operations resource perspective onoperations strategy
Tangible and
Intangible
Resources
Operations
Capabilities
Operations
Processes
Understanding
resources and
processes
Strategic
decisions
-
7/23/2019 2.0 HTM 209 OM Performance and Strategy 290814
53/72
Operations strategy is the strategic reconciliation
of market requirements with operations resources
Performance
Objectives
Market
Positioning
Customer
Needs
Competitors
Actions
Required
performance
Understanding
markets
Operations
Strategy
Decision Areas
Tangible and
IntangibleResources
Operations
Capabilities
Operations
Processes
Understanding
resources and
processes
Strategic
decisions
Slack et al. (2013)
-
7/23/2019 2.0 HTM 209 OM Performance and Strategy 290814
54/72
Operations has to cope with the
clash between the nature ofexternal markets and the
nature of internal resources
Operations Resources
are.
Difficult to change
Technicallyconstrained
Complex
Slack et al. (2013)
Market Requirements
are.
Dynamic
Heterogeneous
Ambiguous
-
7/23/2019 2.0 HTM 209 OM Performance and Strategy 290814
55/72
What you
HAVE
in terms ofoperationscapabilities
What you
NEED
to compete
In the market
Market
Requirements
Operations
Resources
What you
WANT
from youroperations to
help youcompete
What you
DO
to maintainyour
capabilitiesand satisfy
markets
Strategic
ReconciliationSlack et al. (2013)
O ti t t i th t t i ili ti f
-
7/23/2019 2.0 HTM 209 OM Performance and Strategy 290814
56/72
Operations strategy is the strategic reconciliation of
market requirements with operations resources;
Capacity
Supply networks
Process technology
Development and
organisation
Quality
Speed
Dependability
Flexibility
Cost
Market Requirements
Understanding
Markets
Market
Positioning
Market
Segmentation
Competitor
Activity
Slack et al. (2013)
Operations Resources
Understanding
Resources and
Processes
Operations
Processes
Operations
Resources
Operations
Competences
StrategicReconciliation
Required
Performance
Performance
Objectives
Strategic
Decisions
Operations
Strategy
Decisions
-
7/23/2019 2.0 HTM 209 OM Performance and Strategy 290814
57/72
Operations can kick-start two virtuous cycles
World ClassOperations
Understanding ofthe processes
Competenciesembedded in the
operation
Capabilities enhanceinnovation and improvement
Developing the resources whichlet the operations performancestay ahead of the competition
Internal and
Competitiveness Strong
marketing
High
margin
Investment
Developing customerscompetitors and stockholders;perceptions and expectations
External
Slack et al. (2013)
-
7/23/2019 2.0 HTM 209 OM Performance and Strategy 290814
58/72
The four perspectives on
-
7/23/2019 2.0 HTM 209 OM Performance and Strategy 290814
59/72
Top-downperspective
What the businesswants operations
to do
Operationsresourcesperspective
What operationsresources can do
What day-to-dayexperience suggestsoperations should do
Bottom-upperspective
Marketrequirementperspective
What the marketposition requiresoperations to do
Operationsstrategy
The four perspectives on
operations strategy
Slack et al. (2013)
The four perspectives on operations
-
7/23/2019 2.0 HTM 209 OM Performance and Strategy 290814
60/72
The four perspectives on operations
strategy (Complete, with reference to pp 73 - 82)
Four Operations
Strategy
PerspectivesStrategic Focus Key requirements
for operations...Top-down
perspective
Bottom-upperspective
Market
requirement
perspective
Operations
resources
perspective
The four perspectives on
-
7/23/2019 2.0 HTM 209 OM Performance and Strategy 290814
61/72
Top-downperspective
What the businesswants operations
to do
Operationsresourcesperspective
What operationsresources can do
What day-to-dayexperience suggestsoperations should do
Bottom-upperspective
Marketrequirementperspective
What the marketposition requiresoperations to do
Operationsstrategy
The four perspectives on
operations strategy
Slack et al. (2013)
-
7/23/2019 2.0 HTM 209 OM Performance and Strategy 290814
62/72
Corporate strategy
Business strategy
Emergent sense of what
the strategy should be
Operational
experience
Operations strategy
Top-down and bottom-up perspectives of strategy
Slack et al. (2013)
Operations strategy is the strategic reconciliation of
-
7/23/2019 2.0 HTM 209 OM Performance and Strategy 290814
63/72
Operations strategy is the strategic reconciliation of
market requirements with operations resources;
Capacity
Supply networks
Process technology
Development and
organisation
Quality
Speed
Dependability
Flexibility
Cost
Market Requirements
Understanding
Markets
Market
Positioning
Market
Segmentation
Competitor
Activity
Slack et al. (2013)
Operations Resources
Understanding
Resources and
Processes
Operations
Processes
Operations
Resources
Operations
Competences
StrategicReconciliation
Required
Performance
Performance
Objectives
Strategic
Decisions
Operations
Strategy
Decisions
-
7/23/2019 2.0 HTM 209 OM Performance and Strategy 290814
64/72
Operations Strategy #1-2...;Also refer Slack et al. Pages 70 88; and 93
Using Figure 3.3 on page 73 of the text andassociated explanations (pages 73 84) as a
framework; Using the case information on pages 69 and 70,
briefly explain how the four operations
perspectives apply to Ryanair, and Flextronics
In your syndicate groups consider and prepare toreport back, on how Apple has differentiated their
retail outlets, by using assessment of market
requirements to drive strategy (refer Slack et al p76)
Ryanair
-
7/23/2019 2.0 HTM 209 OM Performance and Strategy 290814
65/72
Bottom-up
Top-down
Operations strategy
Operations
Resources
Market
Requirement
Ryanair
The four perspectives on operations strategy:
Efficient operations
Fast turnaround times
High employee productivityNo frills travel
Secondary airports
Internet bookings
Lowest fares
Safe service
On-time serviceNo add-ons
Clear strategy
Low cost operationBasic services
Efficiency
Cut poor contractors
Cut costs
Operate only 737s
Selling directly
Flextronics
-
7/23/2019 2.0 HTM 209 OM Performance and Strategy 290814
66/72
Bottom-up
Top-down
Operations strategy
Operations
Resources
Market
Requirement
Flextronics
The four perspectives on operations strategy:
Efficient operations
Integration - network
Supply chain management
Design-produce-distribute
Outsource supplier
Electronics partsVertical integration
Global supply chainLow cost components
Responsive service
Flexible serviceCost effective delivery
Efficient operations
Industrial parks
Fast delivery
High volume / low cost
Low distribution costs
-
7/23/2019 2.0 HTM 209 OM Performance and Strategy 290814
67/72
The effects of the product/service life cycle on the organization
Sa
les
volume
Introduction Growth Maturity Decline
Volume Slow growth in
sales
Rapid growth in
sales volume
Sales slow down
and level off
Market needs
largely met
Customers Innovators Early adopters Bulk of market Laggards
Competitors Few or none Increasing
numbers
Stable number Declining
numbers
Variety ofproduct /
service
design
Possible high
customization or
frequent design
changes
Increasingly
standardized
Emerging
dominant types
Possible move to
commodity
standardization
Slack et al. (2013)
-
7/23/2019 2.0 HTM 209 OM Performance and Strategy 290814
68/72
Sales
volume
Introduction Growth Maturity Decline
Likely order
winners
Product/service
characteristics,performance or
novelty
Availability of
qualityproducts/services
Low price
Dependablesupply
Low price
Likely
qualifiersQuality
Range
Price
Range
Quality
Range
Dependable
supply
Dominantoperations
performance
objectives
FlexibilityQuality
SpeedDependability
Quality
CostDependability
Cost
The effects of the product/service life cycle on the organization
Slack et al. (2013)
-
7/23/2019 2.0 HTM 209 OM Performance and Strategy 290814
69/72
Operations Strategy #2...;Also refer Slack et al. Pages 77 - 88
Define and assess the impact of the following factors on
operations strategies...
The effect of the product lifecycle factors on;
Customers
Competitors
Operations performance objectives
Explain the distinction between;
Order-winning, and order-qualifying factors (p77-78) Structural...; and
Infrastructural decisions in operations strategy (p84-85)
(Also refer Table 3.3, page 84)
Operations Strategy #3 1
-
7/23/2019 2.0 HTM 209 OM Performance and Strategy 290814
70/72
Operations Strategy #3-1Application to Penang Mutiara...;Also refer Slack et al. Chapter 3...
With reference to the Hayes and Wheelwright model
on pages 71 72; At which stage of contribution do you consider operations
management at Penang Mutiara to be?
Justifications for your opinion?
Using Figure 3.3 on page 73 of the text and associated
explanations (pages 73 84) as a framework; Assess the level of applicability of the four operations
perspectives approach in the Penang Mutiara context,
using examples from each perspective
What specific capabilities, and intangible resources
may be applicable to Penang Mutiara? (See page 82)
Penang
-
7/23/2019 2.0 HTM 209 OM Performance and Strategy 290814
71/72
Bottom-up
Top-down
Operations strategy
Operations
Resources
Market
Requirement
g
Mutiara
The four perspectives on operations strategy:
Efficient operations Luxury service
Clear strategy
Cut costs
Operations Strategy #3 2
-
7/23/2019 2.0 HTM 209 OM Performance and Strategy 290814
72/72
Operations Strategy #3-2Refer Slack et al. Pages 77 79; and 91 - 92
Read the Long Ridge case example...
Evaluate services to members & non-members... (Ref Table 3.1 p79)
Performance
Objectives
For Members For Non-members Performance
gaps
Product / product
range
Quality
Speed
Dependability
Flexibility
Cost