ARE 112 book outline

ARE 112 book outline - ARE 112 book outline 1 Ch 1 a Refer...

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ARE 112 book outline. 1. Ch 1 a. Refer to binder paper for first part of chapter 2. Success Drivers a. Innovation b. Quality c. Service d. Speed – rapid execution (new products), response (to customer requests), delivery. Separates winners from losers. i. Sheryl Sandberg of google made a mistake by moving too fast to plan carefully but co founder Larry Page liked it. “I want or run a company where we are moving too quickly and doing too much, not being too caution and doing too little.” Without these mistakes, it means they’re not taking enough risk. ii. Speed is no longer just a goal, it can be the strategy of a company. 1. ex. Ford needs 15.4 hours to assemble a car. GM used to use 40 hours in 1980. Speed is also part of product development. In the 1980s it was 30-40 months, today Toyota’s average is 24 months and the tundra was 22 months. e. Cost Competitiveness – keeping costs low enough so profits are realized and price of produces are at attractive levels. i. Wal-mart leads the industry in efficient distribution but competitors are copying their methods so they still look to cut costs. They’re trying to use RFID but it hasn’t paid off yet. They also scheduled employees more efficiently via a computer that tracks store’s sales, transactions, units sold and traffic over 7 weeks worth of data from the prior year to predict how many employees will be required. ii. Toyota cut development time in part to decrease cost by having design and manufacturing work together to eliminate wasteful steps. iii. Cutting costs means being efficient, some companies buys shares of a private jet rather than buying the whole thing. iv. Why worry about costs? 1. customers can compare prices easily now with thousands of competitors via Pricegrabber, Froogle, etc. If you can’t cut costs, you can’t compete. v. Ex. some drug companies charge hundreds for a pill that costs less than a dollar. This is a function of the R&D costs rather than the actual ingredient costs. f. Delivering all 5 i. Virginia Mason Med Center has high quality but loses money by treating some patients. They collaborated with Aetna (insurance co) so that rates on expensive treatments were cheaper but hate higher rates that would be profitable for Virginia Mason. They also
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improved wait times for patients from 4 hrs to 90 minutes for chemotherapy. ii. Trade offs may occur between the 5 goals but it doesn’t have to be 0 sum. 1. ex. Avon focused on cost savings when ti contracted w/ IBM to handle human resources. Turning the responsibility over to another Co. allowed Avon to focus on innovation: selling cosmetics direct. Avon’s CEO Andrea Jung targeted China and allowed customization of product via “hook up Connector” to customize packages. 3.
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ARE 112 book outline - ARE 112 book outline 1 Ch 1 a Refer...

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