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Global Operations Strategy Overview

This document discusses operations management and strategy in a global environment. It provides reasons for companies to globalize, including reducing costs by locating in areas with lower wages, improving supply chains by locating closer to resources, providing better goods and services tailored to local markets, understanding markets by interacting with foreign customers and suppliers, learning to improve operations from ideas in other countries, and attracting global talent. It also defines mission as an organization's purpose and strategy as the plan to achieve the mission through approaches like differentiation, cost leadership, and rapid response.

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49 views17 pages

Global Operations Strategy Overview

This document discusses operations management and strategy in a global environment. It provides reasons for companies to globalize, including reducing costs by locating in areas with lower wages, improving supply chains by locating closer to resources, providing better goods and services tailored to local markets, understanding markets by interacting with foreign customers and suppliers, learning to improve operations from ideas in other countries, and attracting global talent. It also defines mission as an organization's purpose and strategy as the plan to achieve the mission through approaches like differentiation, cost leadership, and rapid response.

Uploaded by

mai
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd

Operations

Management
Chapter 2 –
Operations Strategy in a
Global Environment
PowerPoint presentation to accompany
Heizer/Render
Principles of Operations Management, 7e
Operations Management, 9e
Learning Objectives
When you complete this chapter you should
be able to:

1. Define mission and strategy


2. Identify and explain three strategic
approaches to competitive advantage
3. Identify and define the 10 decisions of
operations management
Reasons to Globalize
Reasons to Globalize

Tangible
Reasons
1. Reduce costs (labor, taxes, tariffs, etc.)
2. Improve supply chain
3. Provide better goods and services
4. Understand markets
Intangible 5. Learn to improve operations
Reasons 6. Attract and retain global talent
Reduce Costs
 Foreign locations with lower wage rates can
lower direct and indirect costs
 Maquiladoras
 World Trade Organization (WTO)
 North American Free Trade Agreement (NAFTA)
 APEC, SEATO, MERCOSUR
 European Union (EU)
Improve the Supply Chain
 Locating facilities closer to unique resources
 Auto design to California
 Athletic shoe production to China
 Perfume manufacturing in France
Provide Better Goods
and Services
 Objective and subjective characteristics of
goods and services
 On-time deliveries
 Cultural variables
 Improved customer service
Understand Markets
 Interacting with foreign customers and
suppliers can lead to new opportunities
 Cell phone
design from
Europe
 Cell phone
fads from
Japan
 Extend the product life cycle
Learn to Improve Operations
 Remain open to the free flow of ideas
 General Motors partnered with a Japanese auto
manufacturer to learn
 Equipment and layout have been improved using
Scandinavian ergonomic competence
Developing Missions and
Strategies

Mission statements tell an organization


where it is going

The Strategy tells the organization


how to get there
Mission
 Mission - where are
you going?
 Organization’s
purpose for being
 Answers ‘What do
we provide society?’
 Provides boundaries
and focus
Strategic Process
Organization’s
Mission

Functional
Area Missions

Marketing Operations Finance/


Accounting
Strategy
 Action plan to
achieve mission
 Functional areas
have strategies
 Strategies exploit
opportunities and
strengths, neutralize
threats, and avoid
weaknesses
Strategies for Competitive
Advantage
 Differentiation – better, or at least different
 Cost leadership – cheaper
 Response – rapid response
Competing on Differentiation
Uniqueness can go beyond both the physical
characteristics and service attributes to encompass
everything that impacts customer’s perception of
value

 Safeskin gloves – leading edge products


 Walt Disney Magic Kingdom – experience
differentiation
 Hard Rock Cafe – dining experience
Competing on Cost
Provide the maximum value as perceived by
customer. Does not imply low quality.

 Southwest Airlines – secondary airports,


no frills service, efficient utilization of
equipment
 Wal-Mart – small overheads, shrinkage,
distribution costs
 Franz Colruyt – no bags, low light, no
music, doors on freezers
Competing on Response
 Flexibility is matching market changes in design
innovation and volumes
 Institutionalization at Hewlett-Packard
 Reliability is meeting schedules
 German machine industry
 Timeliness is quickness
in design, production,
and delivery
 Johnson Electric,
Bennigan’s, Motorola
THANK YOU

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