1 Operations Strategy in a Global Environment2 PowerPoint presentation to accompany Heizer and Render Operations Management, 10e Principles of Operations Management, 8e PowerPoint slides by Jeff Heyl © 2011 Pearson Education, Inc. publishing as Prentice Hall

2 Reasons to Globalize Reasons to Globalize Tangible ReasonsReduce costs (labor, taxes, tariffs, etc.) Improve supply chain Provide better goods and services Understand markets Learn to improve operations Attract and retain global talent Tangible Reasons Intangible Reasons © 2011 Pearson Education, Inc. publishing as Prentice Hall

3 Improve the Supply ChainReduce Costs Foreign locations with lower wage rates can lower direct and indirect costs Improve the Supply Chain Locating facilities closer to unique resources Auto design to California Athletic shoe production to China Perfume manufacturing in France © 2011 Pearson Education, Inc. publishing as Prentice Hall

4 Provide Better Goods and ServicesObjective and subjective characteristics of goods and services On-time deliveries Cultural variables Improved customer service © 2011 Pearson Education, Inc. publishing as Prentice Hall

5 Learn to Improve OperationsUnderstand Markets Interacting with foreign customers and suppliers can lead to new opportunities Learn to Improve Operations Remain open to the free flow of ideas General Motors partnered with a Japanese auto manufacturer to learn new approaches to production and inventory control © 2011 Pearson Education, Inc. publishing as Prentice Hall

6 Attract and Retain Global TalentOffer better employment opportunities Better growth opportunities and insulation against unemployment Relocate unneeded personnel to more prosperous locations دكتورة منى الشريف وقفت هنا © 2011 Pearson Education, Inc. publishing as Prentice Hall

7 Cultural and Ethical IssuesCultures can be quite different Attitudes can be quite different towards Punctuality Lunch breaks Environment Intellectual property Thievery Bribery Child labor © 2011 Pearson Education, Inc. publishing as Prentice Hall

8 Developing Missions and StrategiesMission statements tell an organization where it is going The Strategy tells the organization how to get there © 2011 Pearson Education, Inc. publishing as Prentice Hall

9 Mission Mission - where are you going?Organization’s purpose for being Answers ‘What do we provide society?’ Provides boundaries and focus © 2011 Pearson Education, Inc. publishing as Prentice Hall

10 Factors Affecting MissionPhilosophy and Values Profitability and Growth Environment Customers Public Image Mission Benefit to Society © 2011 Pearson Education, Inc. publishing as Prentice Hall

11 Organization’s MissionStrategic Process Organization’s Mission Functional Area Missions Marketing Operations Finance/ Accounting © 2011 Pearson Education, Inc. publishing as Prentice Hall

12 Strategies for Competitive AdvantageStrategy Action plan to achieve mission Functional areas have strategies Strategies exploit opportunities and strengths, neutralize threats, and avoid weaknesses(SWOT analysis) Strategies for Competitive Advantage Differentiation – better, or at least different Cost leadership – cheaper Response – rapid response © 2011 Pearson Education, Inc. publishing as Prentice Hall

13 Competing on DifferentiationIndividuality can go beyond both the physical characteristics and service attributes to encompass everything that impacts customer’s perception of value Competing on Cost Provide the maximum value as perceived by customer. Does not mean low quality. © 2011 Pearson Education, Inc. publishing as Prentice Hall

14 Competing on Response Flexibility is matching market changes in design innovation and volumes Reliability is meeting schedules Timeliness is quickness in design, production, and delivery © 2011 Pearson Education, Inc. publishing as Prentice Hall

15 Managing Global Service OperationsRequires a different perspective on: Capacity planning Location planning Facilities design and layout Scheduling © 2011 Pearson Education, Inc. publishing as Prentice Hall