Bmal 590 Operations/Production
Management_Master Set
Sony makes and sells a huge variety of electronic goods all around the world and much
of the manufacturing occurs in Japan and China as well as the Americas and Europe.
Manufacturing costs vary but the increased responsiveness of having supply near a
major source of demand is a savvy business decision. Sony's dispersed production and
customer base create numerous logistical challenges, and Sony manages these
challenges through third-party logistics.
American Express is a financial services company whose supply chain is not as
complex as Kellogg's or Sony's. Important decisions it must make include locating retail
branches, locating other operations (call centers), and choosing suppliers—such as
manufacturers of credit cards and providers of IT and billing services.
Competitive Priorities Versus Capabilities - CORRECT ANSWER-Competitive priorities
are the relative rankings of what the company would like to achieve.
Competitive capabilities are the relative effectiveness that the company is able to
actually achieve. Some companies start with a competitive priority because there is a
niche in the market that is not being filled, such as the high level of product flexibility in
the mobile device arena (Dell, Apple) while others start with an existing set of
competitive priorities and then find products and markets that are a good fit for the
priorities (Starbucks).
When considering an efficient strategy: - CORRECT ANSWER-an organization is
seeking to be efficient in its operations processes in order to offer a lower price in the
market by using cost and quality approaches.
A low cost leader, seeks lower prices as the easiest reason to communicate to
customers why they should buy a particular product or service.
Unfortunately, simply lowering prices will lead to reduced profits or even losses;
therefore, a company must simultaneously reduce its operating costs. Low-cost
operations seek to provide a product or service that is less expensive than similar
products or services offered by competitors.
The amount of leeway each activity has in its starting time and duration without delaying
the project. - CORRECT ANSWER-Slack time
Operations and Supply Chain Strategies - CORRECT ANSWER-Organizations will seek
a strategy that focuses on either efficiency or responsiveness in their operations and
supply chain
,An organization that is focused on efficiency as a strategy is seeking to compete on
lower cost, while an organization focused on a responsiveness strategy is seeking to
compete on speed of delivery.
Both strategies will impact the price of the product and the perception of quality.
Regardless of the strategy, the ultimate goal of the organization is to make profits, and
preferably more profits than its competitors.
Thus it is possible that either the more efficient or the more responsive organization
could be more profitable. It is also possible that neither organization is profitable -
particularly if they do not manage their operations well
Operations and Supply Chain Strategies for Three "World Class" Organizations -
CORRECT ANSWER-Kellogg's has an extensive product line and serves international
markets with a large network of plants. Important operations decisions include the
product mix at each plant, the network of suppliers, inventory policies, and forecasting
To reduce operating costs an organization should consider qualitymanagement tools
(described in sections 2 and 3) as a means for cost reduction. Customers will pay a
premium for superior quality. Yet, a quality strategy is beyond offering a product or
service that is superior to the alternatives. Consistent quality involves meeting the
product specifications and the promises made to customers with high reliability. The
product does not necessarily have to be superior to another, but customers must have a
high degree of confidence that what they are buying will perform as promised.
Yet, quality as a strategic approach seeks to reduce scrap, eliminate waste, and
improve process efficiencies.
When considering a responsive strategy: - CORRECT ANSWER-an organization is
seeking to compete on speed of delivery in the market by using time/delivery and
flexibility approaches.
With time/delivery, organizations focus on the gap between when a customer orders a
product and when he or she receives it. On-time delivery involves delivering a product
when it is promised, but not necessarily quickly. Delivery speed means that an
organization offers to deliver a product/service faster than a competitor. Getting
something quickly has obvious appeal. Many customers will pay a premium for speed.
Product development speed refers to the time between generations or major changes to
a product. Product development speed is important to just about any business, but it is
particularly important in dynamic industries such as electronics, computers, and fashion.
When considering flexibility, organizations take into account (a) customization—the
ability to make a product to exactly fit customer needs; (b) postponement—keeping
products in a standard format and then adding unique components for individual
customers at the last possible moment; (c) mass customization—products are produced
, in high volume at standard product costs but are customized to individual customer
tastes; (d) variety—the ability to handle a wide range or assortment of products without
undue costs; or (e) volume flexibility—the ability to adjust production volume up or down
to meet fluctuations in demand. Volume flexibility is important when supporting delivery
speed and when demand is fairly unstable.
Examples of Companies with Different Operations Strategies - CORRECT ANSWER-
Low cost
Superior quality
Delivery speed
Customization flexibility
Walmart
Taco Bell
Southwest Airlines
Rolex
BMW
Singapore Airlines
FedEx
Amazon
Dell
Land's End (custom khakis)
wedding planner
These contemporary businesses meet diverse needs and interests of consumers. Note
how the competitive priority/capability "fit" with the company's products or services. So
competitive priorities are the relative rankings of what the company would LIKE to
achieve. Competitive capabilities are the relative effectiveness that the company is
ABLE to actually achieve. Capabilities will occur if the priorities are chosen well and if
operations are managed well to match these priorities.
business strategy - CORRECT ANSWER-the entire organization is generally guided by
a business strategy that defines the markets, products, and target customers and sets
both short- and long-term objectives for the organization.
mission statement - CORRECT ANSWER-often accompanies a business strategy and
defines why a company exists, outlines its core values, and how it seeks to position the
company within the larger market. Though mission statements tend to sound very nice
and positive, they do not always offer much prescriptive guidance.
functional strategies - CORRECT ANSWER-More specific details are provided by
breaking the high-level business strategies into functional strategies, which specify the
core goals of areas such as operations, marketing, finance, IT, and research &
development. Functional strategies must align with the business strategy and be aligned
with one another. Market considerations such as product variety and types of sales
channels (number of stores, Internet) have implications for operations.
Management_Master Set
Sony makes and sells a huge variety of electronic goods all around the world and much
of the manufacturing occurs in Japan and China as well as the Americas and Europe.
Manufacturing costs vary but the increased responsiveness of having supply near a
major source of demand is a savvy business decision. Sony's dispersed production and
customer base create numerous logistical challenges, and Sony manages these
challenges through third-party logistics.
American Express is a financial services company whose supply chain is not as
complex as Kellogg's or Sony's. Important decisions it must make include locating retail
branches, locating other operations (call centers), and choosing suppliers—such as
manufacturers of credit cards and providers of IT and billing services.
Competitive Priorities Versus Capabilities - CORRECT ANSWER-Competitive priorities
are the relative rankings of what the company would like to achieve.
Competitive capabilities are the relative effectiveness that the company is able to
actually achieve. Some companies start with a competitive priority because there is a
niche in the market that is not being filled, such as the high level of product flexibility in
the mobile device arena (Dell, Apple) while others start with an existing set of
competitive priorities and then find products and markets that are a good fit for the
priorities (Starbucks).
When considering an efficient strategy: - CORRECT ANSWER-an organization is
seeking to be efficient in its operations processes in order to offer a lower price in the
market by using cost and quality approaches.
A low cost leader, seeks lower prices as the easiest reason to communicate to
customers why they should buy a particular product or service.
Unfortunately, simply lowering prices will lead to reduced profits or even losses;
therefore, a company must simultaneously reduce its operating costs. Low-cost
operations seek to provide a product or service that is less expensive than similar
products or services offered by competitors.
The amount of leeway each activity has in its starting time and duration without delaying
the project. - CORRECT ANSWER-Slack time
Operations and Supply Chain Strategies - CORRECT ANSWER-Organizations will seek
a strategy that focuses on either efficiency or responsiveness in their operations and
supply chain
,An organization that is focused on efficiency as a strategy is seeking to compete on
lower cost, while an organization focused on a responsiveness strategy is seeking to
compete on speed of delivery.
Both strategies will impact the price of the product and the perception of quality.
Regardless of the strategy, the ultimate goal of the organization is to make profits, and
preferably more profits than its competitors.
Thus it is possible that either the more efficient or the more responsive organization
could be more profitable. It is also possible that neither organization is profitable -
particularly if they do not manage their operations well
Operations and Supply Chain Strategies for Three "World Class" Organizations -
CORRECT ANSWER-Kellogg's has an extensive product line and serves international
markets with a large network of plants. Important operations decisions include the
product mix at each plant, the network of suppliers, inventory policies, and forecasting
To reduce operating costs an organization should consider qualitymanagement tools
(described in sections 2 and 3) as a means for cost reduction. Customers will pay a
premium for superior quality. Yet, a quality strategy is beyond offering a product or
service that is superior to the alternatives. Consistent quality involves meeting the
product specifications and the promises made to customers with high reliability. The
product does not necessarily have to be superior to another, but customers must have a
high degree of confidence that what they are buying will perform as promised.
Yet, quality as a strategic approach seeks to reduce scrap, eliminate waste, and
improve process efficiencies.
When considering a responsive strategy: - CORRECT ANSWER-an organization is
seeking to compete on speed of delivery in the market by using time/delivery and
flexibility approaches.
With time/delivery, organizations focus on the gap between when a customer orders a
product and when he or she receives it. On-time delivery involves delivering a product
when it is promised, but not necessarily quickly. Delivery speed means that an
organization offers to deliver a product/service faster than a competitor. Getting
something quickly has obvious appeal. Many customers will pay a premium for speed.
Product development speed refers to the time between generations or major changes to
a product. Product development speed is important to just about any business, but it is
particularly important in dynamic industries such as electronics, computers, and fashion.
When considering flexibility, organizations take into account (a) customization—the
ability to make a product to exactly fit customer needs; (b) postponement—keeping
products in a standard format and then adding unique components for individual
customers at the last possible moment; (c) mass customization—products are produced
, in high volume at standard product costs but are customized to individual customer
tastes; (d) variety—the ability to handle a wide range or assortment of products without
undue costs; or (e) volume flexibility—the ability to adjust production volume up or down
to meet fluctuations in demand. Volume flexibility is important when supporting delivery
speed and when demand is fairly unstable.
Examples of Companies with Different Operations Strategies - CORRECT ANSWER-
Low cost
Superior quality
Delivery speed
Customization flexibility
Walmart
Taco Bell
Southwest Airlines
Rolex
BMW
Singapore Airlines
FedEx
Amazon
Dell
Land's End (custom khakis)
wedding planner
These contemporary businesses meet diverse needs and interests of consumers. Note
how the competitive priority/capability "fit" with the company's products or services. So
competitive priorities are the relative rankings of what the company would LIKE to
achieve. Competitive capabilities are the relative effectiveness that the company is
ABLE to actually achieve. Capabilities will occur if the priorities are chosen well and if
operations are managed well to match these priorities.
business strategy - CORRECT ANSWER-the entire organization is generally guided by
a business strategy that defines the markets, products, and target customers and sets
both short- and long-term objectives for the organization.
mission statement - CORRECT ANSWER-often accompanies a business strategy and
defines why a company exists, outlines its core values, and how it seeks to position the
company within the larger market. Though mission statements tend to sound very nice
and positive, they do not always offer much prescriptive guidance.
functional strategies - CORRECT ANSWER-More specific details are provided by
breaking the high-level business strategies into functional strategies, which specify the
core goals of areas such as operations, marketing, finance, IT, and research &
development. Functional strategies must align with the business strategy and be aligned
with one another. Market considerations such as product variety and types of sales
channels (number of stores, Internet) have implications for operations.
