Operations Management - Guts, Competitive Advantage, Strategy & Money

JWI 550 Operations Management, Week1 Summary

The concept of using operations management as a strategic lever is refreshingly new to me. I have only perceived operations being used as a tactic. I will use this insight gainfully to energize my organization.

Dr DP

JWI 550 Operations Management, Week1 Summary
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 I. Operations Management (Heizer, Render, 2011, Chapters 1 & 2)
- Operations Managers create goods and services and improve productivity.
- A firm can achieve differentiation and create competitive advantage in three strategic ways:
(a) delivering higher and better value, (b) providing lowest cost or (c) flexible, speedy, reliable response.

II. Jack Welch & Suzy Welch video
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OM is the fundamental guts of how the company operates.
It's an ability to deliver/source products, design services.
It's everything that gets from you to customer; from your suppliers to you to customer and every element of it.
it is how you come to work in the morning to deliver.
it is how companies go from idea to delivery of a product/service - with all the things that need to make it happen.

III. The Goal, Goldratt & Cox (2012) , Chapters 1-5
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Trick to make a factory more efficient and productive begins with goal clarity.
The goal of a manufacturing organization is to make money.

IV. Week1 Lecture1
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(i) Operations management, or OM, is the guts of a company
It fuels an organization's ability to design, source, and deliver products and services--everything that gets what you make from your suppliers to the customer.
(ii) OM is a critical element of strategy - a powerful source of competitive advantage
(iii) Operation Managers Assess each step in a process to determine optimal mix of equipment, labor, tools, facilities, materials, energy, information that going into an operating system.
OM's find solutions that are simultaneously effective, efficient, global, sustainable, responsible
OM's drive Quality management & control, capacity planning, purchasing, supply chain and inventory management, scheduling, cost reduction
OMs responsible for productivity in operations, social responsibility of organizations, global reach
(iv) Customize products and services, shorter product and service life cycles, satisfy more informed and quality conscious consumers, reduce operating margins, exploit promises
and potential of new technology
(v) IKEA - OM used as a lever for generating competitive advantage
(vi) OM Concepts
    Process Mapping
    Capacity Analysis
    Quality Improvement
    Six Sigma
    Lean Systems
    Inventory Management
    Supply-Chain Management
    Sustainable Operations

V. OM must be a source of competitive advantage and is part of strategy rather a tactic.
Operations support strategy in winning organizations.

Wal-Mart
every day low prices    
outstanding logistics excellence to keep costs low; Flexible, speedy and reliable service - super stores open 24x7 except for Christmas day  
                      
Southwest Airlines    
lowest airfare cost for short hop flights    
eliminate frills to keep costs low and conserve at every step of value stream

Starbucks    
better coffee experience    
with music and great ambiance elevate coffee experience

Pizza Hut    
flexible, speedy, reliable response    
superior logistics with technology

IBM    
higher value through breakthrough innovation    
superior R&D; focus on patents; culture of discoveries

Apple    
higher value through innovative design & reliable delivery    
innovative design, on time delivery

Fed Ex    
always on time    
outstanding logistics, hub layout, location