2.0 HTM 209 – OM Performance and Strategy 290814

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    HTM209 Hospitality

    Operations Management

    Semester Two - 2014

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    Welcome to HTM209

    Hospitality Operations Management

    Tutor : Julian Galt

    Room : B2-24

    E mail : [email protected]

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    HTM209 Operations Management;Performance and Strategy

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    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...?

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    Performance Objectives #4Refer Slack et al. Page 645

    Objectives, plans, and progress may be assessed, based on

    polar representations...;

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    Polar diagrams for relative importance of performance

    objectives for a taxi service versus a bus service

    Cost

    Quality Flexibility

    DependabilitySpeed

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    Reassurance

    Crime

    reduction

    Crimedetection

    Working withcriminal justiceagencies

    Efficiency

    Polar diagrams for a proposed police performance targets

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    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

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    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

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    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

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    Judging Performance #2

    Objectives, plans, and progress may be assessed, based on

    polar representations...;

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    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)?

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    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

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    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

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    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

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    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?

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    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?

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    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

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    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

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    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

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    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

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    Performance Objectives #2Refer Slack et al. Pages 46 - 59

    Objective Role Significance Business

    Advantage

    Quality

    Speed

    Dependability

    Flexibility

    Cost

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    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.

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    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...

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    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?

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    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?

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    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
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    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...

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    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

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    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

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    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...

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    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

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    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?

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    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?)

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    STRATEGY

    Operations Management

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    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)

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    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 ..;

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    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)

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    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)

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    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)

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    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

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    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)

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    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
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    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
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    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

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    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)

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    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)

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    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)

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    Nigel Slack and Michael Lewis

    2003

    Performance

    Objectives

    Market

    Positioning

    Customer

    Needs

    Competitors

    Actions

    The market perspective on operations strategy

    Required

    performance

    Understanding

    markets

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    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

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    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)

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    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

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    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

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    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

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    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)

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    The four perspectives on

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    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

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    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

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    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)

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    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

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    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

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    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

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    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

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    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

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    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)

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    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)

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    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

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    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

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    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

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    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