Reasons to globalize
- reduce costs
- improve supply chain
- provide better goods and services
- understand markets
- Learn to improve operations
- attract and retain global talent
Cultural and Ethical Issues
cultures and attitudes can be quite different
- punctuality
- lunch breaks
- environment
- intellectual property
- thievery
- bribery
- child labor
Mission Statements
tell an organization where it is going
Strategy
tells the organization how to get there
Factors Affecting Mission
- philosophy and values
- profitability and growth
- public image
- benefit to society
- customers
- environment
Strategies for Competitive Advantage
Differentiation
Cost leadership
Response
Issues in Operations Strategy
- resources view
- value chain analysis
- Porter’s Five Forces model
- Operating in a system with many external factors
- constant change
Product Life Cycle Stages
- Introduction
- Growth
- Maturity
- Decline
Company Strategies/Issues: Introduction stage
Best period to increase market share
R&D engineering is critical
Company Strategies/Issues: Growth Stage
Practical change price or quality image
Strengthen niche
Company Strategies/Issues: Maturity stage
Poor time to change image, price, or quality
competitive costs become critical
Defend market position
Company Strategies/Issues: Decline stage
Cost control is critical
OM Strategies/Issues: Introduction stage
Product design and development critical frequent product and process design changes short production runs High production costs Limited models Attention to quality
OM Strategies/Issues: Growth Stage
forecasting critical Producing and process reliability Competitive product improvements and options increase capacity shift toward product focus enhance distribution
OM Strategies/Issues: Maturity Stage
Standardization Fewer product changes, more minor changes Optimum Capacity Increasing stability of process Long Production runs Product improvement and cost cutting
OM Strategies/Issues: Decline Stage
little product differentiation Cost minimization Overcapacity in the industry prune line to eliminate items not returning good margin Reduce capacity
Strategy Development Process
- Analyze the Environment (SWOT)
- Determine the Corporate Mission
3 Form a Strategy
Strategy Development and Implementation
- Identify key success factors
- Build and staff the organization
- Integrate OM with other activities
