Production and
Name Fiona Paula Nierves Gutierrez Course
Operations Management
Date Tuesday, June 24, 2025 Chapter 2
Cue Column Key
Note-Taking Column (Explanations, Definitions, Examples, Models)
(Questions/Terms/Main Ideas)
● Competitiveness relates to the effectiveness of an
organization in the marketplace relative to other
What is Competitiveness? organizations that offer similar products or services.
● Competitiveness determines whether a company prospers,
barely gets by, or fails.
● Strategy relates to the plans that determine how an
organization pursues its goals.
● Operations strategy is narrower than organization strategy
What is Strategy?
in scope; it relates to products, processes, methods,
operating resources, quality, costs, lead times, and
scheduling.
● Productivity relates to the effective use of resources, and it
has a direct impact on competitiveness.
What is Productivity?
● Operations management is chiefly responsible for
productivity.
Efficiency is a narrower concept that pertains to getting the most
What is Efficiency?
out of a fixed set of resources
A function of whether you are faster, better, and/or cheaper relative
What is Competitive Advantage?
to your competitors. Competitive advantage is never permanent.
1. Decide first your target customers
Steps in Competitive Strategy 2. Define the products/service to offer
3. Design the value chain to deliver products/service
1. Dramatically reengineer the value chain without changing
product or service
2. Dramatically re-define what products/service you will offer
3. Radically rethink all the three elements of the business
3 Types of Disruptive Strategies model
● Target customers
● Products/service
● Value chain design
● Identifying customer wants and/or needs
Marketing Influences on
● Price and quality
Competitiveness
● Advertising and promotion
● Product & Service Design
● Cost
● Location
● Quality
Operations Influences on ● Quick Response
Competitiveness ● Flexibility
● Inventory Management
● Supply Chain Management
● Service
● People (managers & workers)
● Product: Sony’s constant innovation, HP’s printer market
following
● Service: Southwest Airlines’ no-frills, Pizza Hut’s 5-min
Examples of Operations guarantee, FedEx’s “absolutely, positively on time”
Management’s Contribution to ● Quality: Motorola automotive ignition, IBM after-sales
Strategy service
● Flexibility: Broad product line (Fidelity Security)
● Speed: Fast delivery (Pizza Hut)
● Cost: Cost leadership (Southwest Airlines)
Mission → Organizational Strategy → Functional Strategies
Planning and decision-making (Finance strategies, Marketing strategies, and Operations
hierarchy strategies)→Tactical Plans → Operational Decisions. Each level
supports the next, ensuring alignment with the company’s purpose.
● Flexibility: Design, Volume
● Low Cost: Delivery
Competitive Priorities ● Speed: Dependability
● Quality: Conformance
● Service: After sales service
● Process
● Location
● Layout
Operations Decisions Supporting ● Human Resources
Strategy ● Supply Chain
● Inventory
● Scheduling
● Maintenance
The special attributes or abilities that give an organization a
Core Competence
competitive edge.
Characteristics that customers perceive as minimum standards of
Order Qualifiers
acceptability to be considered as a potential for purchase.
Order Winners Characteristics of an organization’s goods or services that cause it to
be perceived as better than the competition
Analysis of strengths, weaknesses, opportunities, and threats.
SWOT Analysis
The monitoring of events and trends that present threats or
Environmental Scanning
opportunities for a company.
The Balanced Scorecard is a top-down management system that
organizations can use to clarify their vision and strategy and
transform them into action. Aside from a purely financial
perspective, it also integrates other perspectives such as customers,
Balanced Scorecard internal business processes, and learning & growth. The four (4)
perspectives are intended to balance not only financial and
nonfinancial measures but also short- and long-term objectives,
internal and external performance perspectives, and performance
drivers and outcomes.
1. Financial
2. Customer
Balanced Scorecard Perspectives
3. Internal Business Processes
4. Learning and Growth
Productivity relates to the effective use of resources, and it has a
Productivity (Definition and direct impact on competitiveness. Operations management is
Importance) chiefly responsible for productivity.
Productivity Formula Productivity = Output/Input
Partial Productivity Partial productivity = Output/Single input (e.g., labor, machine,
capital, energy)
Multi-factor productivity = Output/(Sum of selected inputs)
Multifactor Productivity
((Current Productivity - Previous Productivity)/Previous
Productivity Growth
Productivity)) × 100
Total Productivity Total productivity = Output/(Total input)
● Develop productivity measures for all operations
● Look at the system as a whole
● Develop methods for achieving productivity improvements
Improving Productivity ● Establish reasonable goals
● Make it clear that productivity is everyone’s business
● Measure and publicize improvements
● Methods
● Capital
Factors Affecting Productivity ● Quality
● Technology
● Management
● High productivity is linked to higher standards of living
● Productivity growth is the key factor in a nation’s long-term
economic growth and competitiveness
Why Productivity Matters ● For businesses, higher productivity relative to the
competition leads to competitive advantage in the
marketplace
Summary
Competitiveness, strategy, and productivity are interlinked concepts essential to organizational success.
Competitiveness is about how well an organization performs relative to its rivals. Strategy provides the roadmap
for achieving organizational goals, while productivity measures how efficiently resources are used. Operations
management plays a central role in all three areas by influencing product design, quality, cost, flexibility, and
speed. Tools like SWOT analysis, the Balanced Scorecard, and productivity metrics help organizations assess
their position and guide improvement efforts.