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87 53 operations strategies for two operations

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87-53 Operations Strategies for Two Operations Strategies for Two Drug Companies Drug Companies Brand Name Drugs, Inc. Generic Drug Corp. Product Selection and Design Heavy R & D; Extensive labs; focus on development in broad range of \drug categories Low R & D investment; focus on development of generic drugs Quality Quality is a major priority; Standards exceed regulatory requirements Meets regulatory requirements on a country-by-country basis as necessary
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87-54 Operations Strategies for Two Operations Strategies for Two Drug Companies - Continued Drug Companies - Continued Brand Name Drugs, Inc. Generic Drug Corp. Process Product & modular production processes Long product runs in specialized facilities Build capacity ahead of demand Process focused General production processes; “Job Shop” approach, short run; Focus on high utilization Location Still located in city in which it was founded Recently moved to low tax, low labor cost environment Scheduling Central production planning Many short run products complicate scheduling
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87-55 Operations Strategies for Two Operations Strategies for Two Drug Companies - Continued Drug Companies - Continued Brand Name Drugs, Inc. Generic Drug Corp. Human Resources Hires the best; nation- wide searches Very experienced top executives provide direction; other personnel paid below average Supply Chain Long term supplier relationship Tends to purchase competitively to find bargains Inventory Maintains high finished goods inventory, primarily to ensure all demands are met Process focus drives up WIP inventory. Finished goods inventory tends to be low
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87-56 Operations Strategies for Two Operations Strategies for Two Drug Companies - Continued Drug Companies - Continued Brand Name Drugs, Inc. Generic Drug Corp. Maintenance Highly trained staff; Extensive parts inventory Highly trained staff to meet challenging demands
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87-57 Characteristics of High ROI Firms Characteristics of High ROI Firms High quality product High capacity utilization High operating effectiveness Low investment intensity Low direct cost per unit
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87-58 Strategic Options Managers Use Strategic Options Managers Use to Gain Competitive Advantage to Gain Competitive Advantage 28% - Operations Management 18% - Marketing/distribution 17% - Momentum/name recognition 16% - Quality/service 14% - Good management 4% - Financial resources 3% - Other
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87-59 Strategic Options Managers Use to Gain Strategic Options Managers Use to Gain Competitive Advantage Competitive Advantage 28% Operations Management Low- cost product Product-line breadth Technical superiority Product characteristics/differentiation Continuing product innovation Low-price/high-value offerings Efficient, flexible operations adaptable to consumers Engineering research development Location Scheduling
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87-60 Preconditions - Preconditions - To Implement a Strategy To Implement a Strategy One must understand: Strengths & weaknesses of competitors and new entrants into the market
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