Operations Management

• Competitiveness


  The effectiveness of an organization in the marketplace relative to other organizations that offer similar products or services
• Marketing influences competitiveness


  1. Identifying consumer wants and needs

  2. Pricing

  3. Advertising and promotion
• Identifying consumer wants and/or needs

  • A basic input in an organization's decision-making process, and central to competitiveness
  • The ideal is to achieve a perfect match between those wants and needs and the organization's goods and/or services
• Price and quality


  • Key factors in consumer buying decisions
  • Important to understand the trade-off decision consumers make between price and quality
• Advertising and promotion


  • Ways organizations can inform potential customers about features of their products or services, and attract buyers
• Operations has a major influence on competitiveness

  1. Product and service design

  2. Cost

  3. Location

  4. Quality

  5. Response time

  6. Flexibility

  7. Inventory and supply chain management

  8. Service
• Product and service design

  • Special characteristics or features can be a key factor in consumer buying decisions
  • Innovation and the time-to-market for new products and services
• Cost


  • A key variable that affects pricing decisions and profit
  • A company may outsource a portion of its operation to achieve lower costs, higher productivity
• Location


  • Can be important in terms of cost and convenience for customers
  • Location near inputs can result in lower input costs
  • Location near markets can result in lower transportation costs and quicker delivery times
  • Convenient location is particularly important in the retail sector
• Quality


  • Refers to materials, workmanship, design, and service
  • Consumers judge quality in terms of how well they think a product or service will satisfy its intended purpose
  • Customers are generally willing to pay more for a product or service if they perceive the product or service has a higher quality than that of a competitor
• Quick response


  • Can be a competitive advantage
  • Quickly bringing new or improved products or services to the market
  • Being able to quickly deliver existing products and services to a customer after they are ordered
  • Quickly handling customer complaints
• Flexibility


  • The ability to respond to changes
  • Changes might relate to alterations in design features of a product or service, or to the volume demanded by customers, or the mix of products or services offered by an organization
  • High flexibility can be a competitive advantage in a changeable environment
• Service


  • Quality of after-sale activities and customer service
• Managers and workers


  • If they are competent and motivated, they can provide a distinct competitive edge by their skills and the ideas they create