Mission Statement
A statement that explains why an organization exists. It describes what is important to the organization, called its core values, and identifies the organization’s domain.
Business Strategy
A mechanism by which a businesses coordinates its decisions regarding structural and infrastructural elements to support its mission.
Identifies a firm’s targeted customers, how the firm will compete, and sets time frames and performance objectives for the business
Functional Strategy
A plan of action that translates a business strategy into functional (e.g., supply chain, marketing, human resources, finance, etc.) responses supporting the business strategy.
Core Competency
An organizational strength or ability developed over a long period of time, that customers value and competitors find difficult or impossible to copy. Objective of strategy is to develop core competencies.
Operations and supply chain strategy
A functional strategy that indicates how structural and infrastructural elements with the operations and supply chain areas will be acquired and developed to support the overall business strategy.
Structural Decision Categories
Capacity
Facilities
Technology
Capacity
Amount, Type, Timing of capacity changes
Facilities
Services/Manufacturing, Warehouses, Distribution hubs
Size, location, degree of specialization
Technology
Services/Manufacturing processes, Material handling equipment, Transportation equipment, Information systems
Infrastructural Decision Categories
Organization
Sourcing/Purchasing
Planning and Control
Business Processes and Quality Management
Product and service development
Organization
Structure, Control/reward systems, Workforce decisions
Sourcing/Purchasing
Sourcing strategies, Supplier selection, Supplier performance measurement
Planning and Control
Forecasting, Tactical planning, Inventory management, Production planning and control
Business Processes and Quality Management
Six Sigma, Continuous improvement, Statistical quality control
Product and service development
The developmental process, Organizational and supplier roles
Four Major Performance Dimensions
- Quality
- Time
- Flexibility
- Cost
Performance Quality
Addresses the basic operating characteristics of a product or service.
Conformance Quality
Addresses whether a product was made or a service performed to specifications.
Reliability Quality
Addresses whether a product will work for a long time without failing or requiring maintenance.
Delivery Speed
Delivery Speed - How quickly the operations or supply chain function can fulfill a need once it has been identified.
Delivery Reliability
The ability to deliver products or services when promised.
Mix Flexibility
The ability to produce a wide range of products or services.
Changeover Flexibility
The ability to produce a new product with minimal delay.
Volume Flexibility
The ability to efficiently produce whatever volume the customer needs.
Cost
- Labor costs
- Material costs
- Engineering costs
- Quality-related costs
- Overhead allocation
Customer Value Index
- A measure that uses a customer’s evaluation and importance scores for the various performance dimensions to calculate a score that indicates the overall value of an item or service to a customer.
Operations and Supply Chain Strategies
Identify product dimensions highly valued by customer, select competitive dimensions, and design supply chain to excel on these dimensions.
Order Winners
A performance dimension highly valued by customers that differentiates a company’s products and services from its competitors. It tends to drive market share within a targeted market segment.
Order Qualifiers
A performance dimension on which customers expect a minimum level of performance.