Lecture 2-Chapter 2

Lecture 2-Chapter 2 - 1 Chapter 2 Productivity,...

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Unformatted text preview: 1 Chapter 2 Productivity, Competitiveness, and Strategy 2 Chapter 2 Outline A. What is competitiveness? B. How business organizations compete with one another? C. What is Mission, Vision, Strategy? D. Operations strategy (nine major decision making categories in Operations Management) E. Quality and time strategies F. Calculating productivity G. Productivity in the service sector H. Factors affecting productivity 3 Competitiveness: relates to how effective an organization is in the marketplace compared to other organizations that offer similar goods or services A. What is Competitiveness? Business organizations compete to one another in a variety of ways Price Quality Variety Timeliness Customer Service Differentiation Location 4 Productivity Outputs = goods and/or services produced by the operations system (measured in units or $) Inputs Single input/single factor (e.g., labor, materials, capital, time) Multiple input/multifactor (e.g., labor + materials, in $) All inputs/total factor (total system productivity, in $) Total Outputs - Total Inputs = Value Added Inputs Outputs ty Productivi = 5 Productivity growth is a key factor in a countrys standard of living. Labour productivity is still the main measure used to gauge the performance of individuals and plants. Wage and price increases not accompanied by productivity increases tend to create inflationary pressure on economy. Because of the large amount of trade with US, it is very important not to lose ground on productivity. About productivity 6 Productivity Paradox despite massive investment in computers, the rate of productivity growth is now lower than it was before computers were introduced... Why? possibly measures of productivity are not sensitive enough to detect growth in the area of services where most of the growth has occurred perhaps gains in productivity are still building and may become apparent in the next few years perhaps information technology is not the boon to productivity that it was anticipated to be 7 Industry Productivity differences exist in the productivity between services and goods manufacturing sectors, with the services sector showing slower growth differences also exist within specific industries agriculture is more productive internationally for Canada than steel or automobile production due to investment in technology and superior natural resources 8 Company Productivity a more productive company: enjoys lower costs can pass on savings in reduced prices can obtain a competitive edge enjoys better stock prices can offer employee profit-sharing plans based on productivity-improvement can rely on productivity-planning to maintain a long- term market advantage 9 Productivity, cont....
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Lecture 2-Chapter 2 - 1 Chapter 2 Productivity,...

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