Operation Strategy: Specifies the means by which operations implements corporate strategy
* Corporate strategy: Provides an overall direction and framework for carrying out all the organization’s function (Environmental scanning, core competencies, core processes, and global strategy)
* Competitive capabilities: current performance along those dimensions that a process or supply chain actually has
* Order Winner: a criterion the customers use to differentiate the services / products of a firm from those of others
* Price (low prices), Flexibility (large variety), Quality (in-stock merchandise availability, customer service), Time
* Order Qualifier: the minimum level ...view middle of the document...
Ex: Mustang assembly line; mass market shoes, computers, appliances, toys, cell phones. 4) Continuous Flow Process: Extreme form of “line process” (High-volume, standardized products, Rigid line flow). Primary materials are liquid, gas or powder. Non-stopping. Ex: Beer brewery process.
Project, Job Shop, Batch, Line Flow, Continuous Flow
* Inventory Strategies
* Make-to-order: Made to customer specification in low volume, from parts to sub-assemblies to final assembly, no inventory for finished goods, Typically job or small-batch processes. Competitive priorities supported by: top-quality, on-time delivery, and flexibility (high customization and variety). Example: Nike sponsored athletic shoes.
* Assemble-to-order: PRoduce a wide variety of products from relatively few standardized subassemblies and components after customer orders arrive. Keep inventory for subassemblies and components. No inventory for finished goods. Competitive priorities supported: Fast delivery; variety.Typical process structures: Batch process for assembly. Line process for fabrications of subassemblies and components.
* Make-to-Stock: Hold final products in stock for immediate delivery (This strategy is used for standardized final products with high volume). Competitive priorities supported: Low-cost operation; delivery speed. Typical process structure: Line or flow process
* Process analysis: The documentation and detailed understanding of how work is performed and how it can be redesigned.
* Product-Process Matrix – (Project, One of a Kind) = Space Shuttle. (Job Shop, Very Low Volume) = Rolls Royce. (Batch, Low volume, many products) = Jeans. (assembly line, High volume, standard products) = Ford Sedans. (Continuous Flow, High volume Commodity) = Oil refining
* Capacity Rate – Maximum # of jobs that can be completed in a unit of time by a resource or a process. 6 mins/form, = 10/hr
* Cycle Time – Average time between completion of successive units. = 1/capacity. 6 mins/form = cycle time. (1/10 * 60 mins)
* Bottleneck – Lowest capacity rate or highest cycle time. Bottleneck is capacity of entire process.
* Flow Time – Total time that a unit of job spends in entire process. Also known as Throughput time. Flow time efficiency = Theoretical Flow time/ Actual Flow time
* Throughput Rate – Number of Units actually produced per unit of time.
* Process Utilization – Throughput Rate/Capacity Rate
* Demand Rate - # of Jobs or customers that arrive at the process per unit of time. Every 3 mins = 20/hr demand rate
* Inventory Buildup Diagram – If Demand > Capacity there is Inventory Buildup at rate = demand rate – capacity rate
With initial inventory, and Demand < Capacity, inventory depletes at capacity rate – demand rate.
* Naïve Approach – Assumes demand in...