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Michelle_Michy
20200528132055ch02_strategy_global_rbg.pptx1
ADMN580
CH02: OPERATIONS STRATEGY,
GLOBALIZATION
Roger Grinde
QUANTITATIVE DECISION MAKING
CH02: OPS STRATEGY, GLOBAL
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OPERATIONS STRATEGY
How do we make sure tactical decisions support our top-level strategy?
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http://freakonomics.com/podcast/men-started-thinking-revolution/
The story of how two Israeli psychologists Amos Tversky and Danny Kahneman redefined how the human mind actually works – establishing a cognitive basis for common human errors that arise from heuristics and biases
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MANAGING OPERATIONS
THE CHALLENGE OF MAKING DECISIONS
We can use data and analysis as an antidote to the warping that naturally goes on when we are making intuitive judgments.
In both business and in life
We make bad judgment calls because of inherent biases in the human mind.
I’m asking $5,000 for this classic Buick Century, but for you I can do $4,300.
Anchoring (or focalism) is the idea that your mind can be swayed by totally irrelevant information when you’re making a decision.
. . .the actual average retail is $2,500.
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Business organizations are a collection of individuals constantly making decisions of varying importance.
(or waiting for decisions to be made for them)
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STRATEGIC DECISIONS
Broad in Scope
Longer-term
All Encompassing
(What product should we launch next, in what markets?)
TACTICAL DECISIONS
Narrow in Scope
Shorter-term
“Lower Level” Issues
(Who will cover second shift
next week?)
STRATEGIC DECISIONS
As you progress in your career – try to be one of the decision makers!
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You are tasked with helping National Architects Incorporated select an outsourced IT provider.
COMPARE OPTIONS & MAKE A DECISION
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Quantitative approach to evaluating multiple options
Helps drive team consensus around key decisions
Simple Tool, Surprisingly Effective. Gets people talking.
USE A “WEIGHTED DECISION MATRIX”
Also known as the FACTOR-RATING METHOD
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Then sum the column for a total weighted score.
Repeat for each column and compare the results. Who do you pick?
Multiply each factor score by their weight.
You are tasked with helping National Architects Inc. select an outsourced IT provider. Your supplier management team conducted a Request for Proposal (RFP) and received the following results. Which supplier do you recommend?
Scores are within 2% of each other. What do would you recommend?
REALITY CHECK
OPERATIONS: Decision Matrix
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| # | FACTOR (CRITERION) | WEIGHT | OUTSOURCING PROVIDERS | ||||||||||||||
| BIM (US) | SPC (India) | TELCO (Israel) | |||||||||||||||
| 1 | Can reduce operating costs | 0.2 | 3 | 3 | 5 | ||||||||||||
| 2 | Can reduce capital investment | 0.2 | 4 | 3 | 3 | ||||||||||||
| 3 | Skilled personnel | 0.2 | 5 | 4 | 3 | ||||||||||||
| 4 | Can improve quality | 0.1 | 4 | 5 | 2 | ||||||||||||
| 5 | Access to technology not in company | 0.1 | 5 | 3 | 5 | ||||||||||||
| 6 | Can create additional capacity | 0.1 | 4 | 2 | 4 | ||||||||||||
| 7 | Aligns with policy/ philosophy/ culture | 0.1 | 2 | 3 | 5 |
example problem
x 0.2 = 0.6
x 0.2 = 1.0
x 0.1 = 0.4
x 0.1 = 0.5
x 0.1 = 0.4
x 0.1 = 0.2
x 0.2 = 0.8
3.9
x 0.2 = 0.6
x 0.2 = 0.8
x 0.1 = 0.5
x 0.1 = 0.3
x 0.1 = 0.2
x 0.1 = 0.3
x 0.2 = 0.6
3.3
x 0.2 = 1.0
x 0.2 = 0.6
x 0.1 = 0.2
x 0.1 = 0.5
x 0.1 = 0.4
x 0.1 = 0.5
x 0.2 = 0.6
3.8
‹#›
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ANY QUESTIONS?
WEIGHTED DECISION MATRIX
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Decision Matrix Practices
How will your team spend your gap year? How strong is the consensus?
Assume your team plans to take a “group gap year”. Use a decision matrix to reach a consensus on how to spend your time away from UNH.
Download DECISION MATRIX template
Brainstorm decision criteria - reflecting your team’s goals (list at least five)
Review the criteria list and weight the importance of each (on a scale of 1 to 10)
Brainstorm gap year options - where to go? / what to do? (be specific - list five)
Review options and score each based on how well each would fulfil the required decision criteria (1 “not at all” thru 10 “completely”)
Once all options are scored, multiply the option score by the associated criteria weight and sum the product to get a weighted score for each option
Discuss results as a team and select an option for your gap year experience. Report back to the class and comment on how the decision process worked.
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CUSTOMER
FINANCIAL
INNOVATION
(Learning & Growth)
INTERNAL
PROCESSES
An approach to creating a Strategy Focused Organization (complements what is covered in CHAPTER TWO)
BALANCED SCORECARD (BSC)
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Four Minute Video: https://www.youtube.com/watch?v=M_IlOlywryw
BSC: QUICK VIDEO OVERVIEW
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Four Minute Video: https://www.youtube.com/watch?v=M_IlOlywryw
BSC: QUICK VIDEO OVERVIEW
Go to CANVAS and watch the video.
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Copyright © 2005 by the Balanced Scorecard Institute. All rights reserved.
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Developed by by Drs. Robert Kaplan (Harvard Business School) and David Norton
BALANCED SCORECARD
Implementing a
BALANCED SCORECARD
helps create a
Strategy-Focused Organization by providing a framework for aligning the organization and human capital components needed to achieve
High Performance
Think about your own business startup idea.
STRATEGY FOCUSED
As we discuss BSC connect the approach to how you might run your own business.
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PERSONAL PLANS
(What I Need to Do)
MISSION
(Why We Exist)
VISION
(What We Want to Be)
VALUES & PRINCIPLES
(What’s Important to Us)
STRATEGY
(How We Want to Get There)
SCORECARD
(How We Measure Progress)
IMPLEMENTATION PLANS
(What We Need to Do)
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CUSTOMER
FINANCIAL
INNOVATION
(Learning & Growth)
INTERNAL
PROCESS
STRATEGY
How will we sustain our ability to change and improve?
How do we create value? What benefit do we provide?
To satisfy customers at what business processes must we excel?
How do we generate value for our stakeholders?
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BSC METRICS
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PROCESS
Step Nine:
Evaluate
the Results
Step One:
Assess
Corporate
Priorities
Step Two:
Develop
Business
Strategy
Step Three:
Decompose
Strategy into
Objectives
Step Eight:
Roll-out
the Scorecard
Step Seven:
Systematize
the Scorecard
Step Six:
Identify
Enabling
Initiatives
Step Five:
Define
Performance
Measures
Step Four:
Categorize/Map
the Strategy &
Objectives
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We will focus on the first two steps.
Click to edit Master text styles
Second level
Third level
Fourth level
Fifth level
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Environmental Scanning
Monitoring the business environment for
trends
threats
opportunities
Mission / Vision / Values
Statement that defines
what is our business
who are our clients
how our values define our business
Core Competencies
Unique strengths that that help us win in the market
workforce
facilities
know-how
systems/technology
Business Strategy
Defines the long-range plan for the company
1) ASSESS PRIORITIES
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FIVE FORCES
SUBSTITUTES
NEW ENTRANTS
CUSTOMERS
SUPPLIERS
THE INDUSTRY
TRADITIONAL COMPETITORS
OUR COMPANY
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ENVIRONMENTAL SCANNING
Porter’s Five Forces Model
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FIVE FORCES
Manual Labor (Concrete)
Raised Floors
Liquid Solutions (Epoxy)
Backer Board
Low Alkali Concrete
THE INDUSTRY
Self-leveling Cement Flooring Products & Accessories (Americas)
SUBSTITUTES
Traditional Competitors
Ardex
Mapei
ProSpec (Old Castle)
CMP
Dayton Superior
Laticrete
Maxxon
USG
Raeco
Hacker
Dependable
DRYTEK
Combimix
HB Fuller
Sika
Product Technologies
SUPPLIERS
CUSTOMERS
NEW ENTRANTS
Distributors
Celtic
GMS
Flooring Contractors
Eurotech
Consolidated
General Contractors
Architects
Building Owners
Building Occupants
Contract Manufacturer
Key Raw Materials
Lafarge
Kerneos
Elotex
Bags
Logistics Providers
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ENVIRONMENTAL SCANNING
Porter’s Five Forces Model
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S
W
O
T
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STRENGTHS
WEAKNESSES
OPPORTUNITIES
THREATS
SWOT ANALYSIS
CORE COMPETENCIES
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STRENGTHS
WEAKNESSES
OPPORTUNITIES
THREATS
Customer support levels
Brand/Reputation
Great self-leveling product line
Key partnerships in place in NY Metro area
Dedicated, experienced, team
Charismatic, visionary leadership
Clear vision
Partnerships / Joint Ventures
Regional expansion thru distribution
Western production ramp up
Introduce new products
Capture share in current markets
Decorative floors
Manufacturer / OEM
New market entrants
Competitors
Substitute Products
Internal?
Lack of internal & external communications
Trowel Applied Products need improvement
Poor Planning - always in “fire-fight” mode
Strategy is foggy
Initiatives not prioritized
No metrics
No forecasting, capacity planning, or inventory management
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Core Competencies
Environmental Scanning
CORE COMPETENCIES
SWOT ANALYSIS
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Dell's mission is to be the most successful computer company in the world at delivering the best customer experience in markets we serve.
Apple is committed to bringing the best personal computing experience to students, educators, creative professionals and consumers around the world through its innovative hardware, software and Internet offerings.
http://drdianehamilton.wordpress.com/2011/01/13/top-10-company-mission-statements-in-2011/
MISSION STATEMENT
Here are two corporate missions from way back in 2010
Google the current missions for Apple and Dell. How have they changed?
What is our business?
Who are our clients?
How do our values define our business?
How do these two statements reflect different strategies?
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BUSINESS STRATEGY
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Business Strategy
Environmental Scanning
Mission
Core Competencies
Business Strategy
Business Strategy is how an organization expects to achieve its mission and goals.
Examples of common strategic themes include:
Improve Operational Efficiency
Lead in New Product Innovation
Plus identification of competitive advantages such as
Be Low Cost Provider
2) BUSINESS STRATEGY
Note: In addition to describing what the approach is, business strategy, by elimination, identifies what approaches have not been selected.
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Differentiation
(better)
Response
(faster)
Cost
Leadership
(cheaper)
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STRATEGIC PRIORITIES
Competitive Advantage achieved via right mix of strategies.
Successful companies match Core Competencies and Strategic Priorities
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OPERATIONS DECISIONS
In OM - we develop operational strategies that support the stated Strategic Priorities (and overall Mission of the organization).
Product (or Service)
Quality
Process
Location
Layout
Human Resources
Supply Chain
Inventory
Scheduling
Maintenance
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ACHIEVING COMPETITIVE ADVANTAGE
Figure 2.4
Read more about these Strategies and Competitive Advantage in CHAPTER TWO.
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ISSUES DURING PRODUCT LIFE CYCLE
Figure 2.5
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SUSTAINABILITY
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Products, Services and Practices
Environmentally Friendly
Socially Responsible
Ethical & Moral
GREEN AS A STRATEGY
Meeting the needs of the present without compromising the ability of future generations to meet their own needs.
Is sustainability a viable competitive priority or just a marketing ploy?
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Conduct A Quick Strategic Assessment
15-minute exercise
Pick a public company
Research and discuss their mission statement
Jot down their key competitive advantages
Identify a recent strategic initiative (hint: google “business strategy your company’s name”)
Decide if their strategy supports their mission
Recommend an additional strategy for the company
Report back to the board of directors
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What is your company’s mission? Are they achieving it? What else can they do?
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GLOBAL STRATEGIES: WHAT IS THE MOST “AMERICAN” CAR?
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GLOBAL STRATEGIES
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GLOBAL STRATEGIES
Volvo: Considered a Swedish company, purchased by a Chinese company, Geely. The current Volvo S40 is assembled in Belgium and Malaysia on a platform shared with the Mazda 3 (built in Japan) and the Ford Focus (built in six countries including the U.S.).
Haier: A Chinese company, produces compact refrigerators (it has one-third of the U.S. market) and wine cabinets (it has half of the U.S. market) in South Carolina and other appliances in Kentucky.
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REASONS TO GLOBALIZE
Improve the supply chain
Reduce costs and exchange rate risks
Improve operations
Understand markets
Improve products
Attract and retain global talent
There are potential REWARDS to globalization.
There are also potential RISKS.
How do we maximize rewards, while mitigating (reducing, controlling) risks?
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Grinde, Roger (GR) -
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