2
                   Chapter 2
       Operations Strategy and 
               Competitiveness
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                               Rights Reserved.
                                                         3
       OBJECTIVES 
        Operations Strategy
        Competitive Dimensions
        Order Qualifiers and Winners
        Strategy Design Process
        A Framework for Manufacturing Strategy
        Service Strategy Capacity Capabilities 
        Productivity Measures
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                               Rights Reserved.
                                                                       4
                 Operations Strategy
       Strategy Process                        Example
         Customer Needs                       More Product
        Corporate Strategy                  Increase Org. Size
       Operations Strategy              Increase Production Capacity
          Decisions on Processes
              and Infrastructure            Build New Factory
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                                       Rights Reserved.
                                                                       5
            Competitive Dimensions
         Cost or Price
            – Make the Product or Deliver the Service Cheap
         Quality
            – Make a Great Product or Deliver a Great Service
         Delivery Speed
            – Make the Product or Deliver the Service Quickly
         Delivery Reliability
            – Deliver It When Promised
         Coping with Changes in Demand
            – Change Its Volume
         Flexibility and New Product Introduction Speed
            – Change It
         Other Product-Specific Criteria
            – Support It
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                                       Rights Reserved.
                                                                       6
             Dealing with Trade-offs
   For example, if we reduce costs by reducing product 
    For example, if we reduce costs by reducing product 
   quality inspections, we might reduce product quality. 
    quality inspections, we might reduce product quality. 
    For example, if we 
     For example, if we 
    improve customer                               Cost
     improve customer 
    service problem solving 
     service problem solving 
    by cross-training 
     by cross-training              Flexibility              Delivery
    personnel to deal with a 
     personnel to deal with a 
    wider-range of 
     wider-range of                               Quality
    problems, they may 
     problems, they may 
    become less efficient at 
     become less efficient at 
    dealing with commonly 
     dealing with commonly 
    occurring problems. 
     occurring problems. 
   McGraw-Hill/Irwin                   © 2006 The McGraw-Hill Companies, Inc., All 
                                       Rights Reserved.