GMS 401 Lecture Notes - Lecture 2: Material Requirements Planning, Continual Improvement Process, Computer Virus

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Chapter 2: Competitiveness, strategy and productivity
Competitiveness –the ability and performance of an organization in the marketplace compared
to other organizations that offer similar goods or services
Order qualifiers –are those purchasing criteria that customers perceive as minimum standards
of acceptability for purchase, however these my not be sufficient to get a customer to purchase
from the organization
Minimum standards of acceptability for purchase
Allow product to be considered
Order winners –those purchasing criteria that cause the organization to be:
Perceived better than the competition
Allow product to be purchased
Businesses compete using operations
Cost
the unit production of a good or performance of a service to the organization
Organizations that compete based on cost (i.e., price from a customer’s perspective)
emphasize lowering their operating costs.
Quality
from an organization’s perspective means determining customers’ quality
requirements
translating these into specifications for goods or services, and consistently producing
goods or performing services to these specifications.
Flexibility
refers to being able to produce a variety of goods or performing a variety of
services in the same facility.
This also includes customization, which is modifying goods or services to meet the
requirements of individual customers. It may also refer to being able to easily
increase or decrease the production quantity of goods or performance quantity of
services (quantity flexibility)
Flexibility is usually achieved by having general-purpose equipment, excess capacity,
and multiskilled workers, resulting in easy changeover between production of goods
and performance of services.
Timeliness
refers to being able to consistently meet promised due dates by producing
goods or performing services on time or quickly.
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Timeliness is usually achieved by using communication networks, planning and
control systems, reliable equipment and workers, and just-in-time production.
Businesses compete using operations
1. Cost/Price:
All other factors being equal, a customer will choose the lowest price
Firms that compete on price alone may settle for lower profit margins
Most firms focus on lowering their costs of delivering goods and/or
services to their customers.
2. Quality:
Materials, workmanship, design.
Buyer: how well will the product or service serve its purpose?
Company: How consistently they can produce to the customers quality
expectations
3. Flexibility:
The ability to respond to changes.
The better the response, the greater the competitive advantage.
This may be changes in demand or design.
4. Timeliness:
How quickly is a product or service delivered to the customer
How quickly new products are developed.
Rate at which changes to product or process are made.
What does the customer want?
1. What EXACTLY does the customer want?
2. How can our firm go about meeting the customer’s needs?
Value= Performance / Cost
Value = (Quality + Speed + Flexibility) / Cost
The customer will weigh the above 3 factors
Value = w1 * Quality + w2 * Speed + w3*Flexibility /
Cost
Understanding this value relationship can help managers develop successful strategies.
Mission/Values/Vision
Mission
Where the organization is going now
Vision
Where the organization desires to be in the future
Values
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