OPERATION STRATEGY

OPERATION - resources that create products & services

OPERATIONAL - day to day and detailed
STRATEGY - Greek metaphor ‘Strategos’ meaning ‘to lead an army’
OPERATION STRATEGY - involves decisions that related to specifications and design of
product or services.

An Operation Strategy must include at least the following:

1. Amounts of capacity required by the organization to achieve its aims;
2. The range and locations of facilities;
3. Technology investment to support process and product developments;
4. Formation of strategic buyer supplier relationships as part of the organization's extended
enterprise
5. The rate of new product or service introduction;
6. Organizational structure to reflect what the firm "does best", often entailing outsourcing of
other

The FOUR-STAGE MODEL OF THE STRATEGIC ROLE OF OPERATIONS outlines

how operations management evolves within a company:

1. Internal neutrality: Operations focus on efficiency and cost reduction, aiming to keep up
with competitors without standing out.
2. External neutrality: Operations become competent in customer service and quality to match
or slightly surpass competitors.
3. Internal supportive: Operations start supporting the company's strategies by aligning
production with marketing and financial goals.
4. External supportive: Operations become a source of competitive advantage by offering
unique products or services that set the company apart in the market.
The FOUR PERSPECTIVES ON OPERATIONS MANAGEMENT are:

1. Top-down perspective: This means decisions and strategies are made by the higher-ups in the
company and then implemented by the operations team

2. Market requirement perspective: This perspective focuses on meeting the demands and
needs of the market.

3. Bottom-up perspective: Here, ideas and improvements come from the frontline workers or
lower levels of the organization and are then implemented upwards.

4. Operations resources perspective: This perspective emphasizes managing resources like

equipment, materials, and workforce efficiently to meet production goals.
 UNDERSTANDING
CONSUMER WANTS
 UNDERSTANDING
CONSUMER WANTS

"Understanding Customer
Wants" is a concept in
marketing and business that
emphasizes the importance of
comprehending the needs,
desires, and preferences of
customers to better serve
them and create value.
https://pin.it/51pdRsQdo
 CONSUMER WANTS

A consumer’s wants usually

reflect the desired preferences
for specific ways of satisfying a
need. Thus, people usually
want particular products,
brands, or services that satisfy
their needs in a specific way.

https://pin.it/51pdRsQdo
 PURPOSE
Levvitt (1986) held that the purpose of a business is
to create and keep a customer. He maintained that
there can be no corporate strategy that is not in
some fundamental fashion a marketing strategy, as
the purpose of business is to sell products or
services that
customers are willing to purchase. Therefore, if a
company is truly market oriented, it will focus its
attention and activities on its customers and
their expectations. The actions of such a company
arise directly from its customers’ needs and wants.
IMPORTANCE OF CONSUMER'S WANTS
TO OPERATION MANAGEMENT

Demand Forecasting Customization

Innovation and Feedback

Improvement Integration
 Understanding consumer's
wants helps in forecasting
demand accurately,
enabling better inventory
management and
DEMAND production planning.
FORECASTING
CUSTOMIZATION

If customers desire personalized

products or services, operations must be
flexible enough to accommodate
customization without compromising
efficiency.
 INNOVATION AND
IMPROVEMENT

Understanding customer
preferences drives continuous
improvement and innovation in
operations to stay ahead in
meeting evolving market
demands.
FEEDBACK
INTEGRATION

Operations management should include

mechanisms for gathering and
integrating customer feedback to adapt
processes and enhance customer
satisfaction.
REFERENCES

Kotler, P., & Keller, K. L. (2016). Marketing Management (15th ed.). Pearson.
Payne, A., Frow, P., & Eggert, A. (2017). The Customer Value Proposition: Evolution, Development, and
Application in Marketing. Journal of the Academy of Marketing Science, 45(4), 467-489.
THANK YOU
REPORTER NO. 5 – COMPETITIVE STRATEGIES

Competitive Priorities – it refers to strategic focus area that a company emphasizes in order to gain a
competitive advantage in the market. These priorities are the key areas where a company aims to excel
and differentiate itself from competitors. They are the core elements that drive the company's
operations and decision-making processes. Competitive priorities can vary depending on the industry,
market conditions, and customer preferences. They are determined by analyzing factors such as
customer needs, market trends, and the company's capabilities. By understanding and prioritizing these
factors, a company can align its resources and efforts to meet customer expectations and outperform
competitors.

Core elements:
1. Cost: According to Masyhuri (2021), the first dimension of competitive priorities is the Cost. It
distributing products or services at the lowest possible price to satisfy customers
within the supply chain or process operations. This can be achieved through various strategies such as
streamlining production processes, reducing waste, negotiating better deals with suppliers, or
implementing cost-saving technologies. By focusing on cost, businesses can attract customers and gain a
competitive edge in the market.

2. Quality: Quality is well known competitive tool in the market. It is a crucial priority that emphasizes
delivering products or services that meet or exceed customer expectations. It involves implementing
quality control measures throughout the production process to ensure that every product or service
meets the desired standards. This can include conducting regular inspections, implementing quality
management systems, and continuously improving processes to enhance product reliability, durability,
and customer satisfaction. By prioritizing quality, businesses can build a strong reputation, attract loyal
customers, and differentiate themselves from competitors.

3. Time: Customer satisfaction can be obtained by adopting flexible capacity into the production,
process, and timely supply. Delivery time or speed is considered an important competitive weapon.
Organizations today compete with each other for delivering a better quality of products/ services in a
shorter time as much as possible. So, we can say that this competitive priority’s main focus is on speed
i.e. fast delivery and timely delivery. Fast delivery is receiving orders in a much quicker way. On-time or
timely delivery is related to the number of times deliveries are done at a given time. One more weapon
is development speed that includes the time required to bring a thought process or an idea into the
market

4. Flexibility: In case competitors have a competitive advantage through widening their product lines,
quality improvement, or reducing the cost of products, then, it may lead to a threat to similar products
of competing organizations. Moreover, new players offering substitute products in the market may also
put competition and challenges. In order to prevent such situations, an organization must build desired
flexibility in its production, and also, the necessary modification must be done in operations strategy. So,
we can say that flexibility is also a competitive weapon as it consists of the capability of producing a
wide range of products, introducing new products, quick modification of existing products, and fast
response to the needs of customers. Operations strategy is addressed by the flexibility that includes a
fast response in changing the volume of production.
 - Volume Flexibility.

The ability, through which acceleration or deceleration of production rate is done in order to
handle demand fluctuations, is termed as volume flexibility.

- Customization.

This ability of an organization is related to satisfy the particular requirements of each customer.
In this, organizations offer products/ services by allowing better flexibility to customers in
choosing products/ services and customize them according to their needs.

5. Innovation: Product innovation refers to the development of new products by exploiting new
technologies, features and technologies. New product features and characteristics have also been
identified as components of a strategic approach that companies adopt to differentiate themselves in
the market.

References:

Masyhuri, M., (August 2023). Competitive Priorities as Operations Management Strategy Enablers.
Research Gate. Retrived from
https://www.researchgate.net/publication/373339854_Competitive_Priorities_as_Operations_
Management_Strategy_Enablers

“Competitive Priorities in Operations Management”. (September 28, 2020). Googlesir. Retrieved from 5
Competitive Priorities in Operations Management - (googlesir.com)
PRESENTER #4
Angcana, Nicole Jean M.
Aquino, Czehnen Kiel D.

"EVALUATING GOODS AND SERVICES"

As a consumer before we purchased/acquire goods or services, we first evaluate the

characteristics of that particular goods and services

There are 3 ATTRIBUTES or also known as SEC CLASSIFICATION that commonly / mostly uifo by
consumer when evaluating goods and services

3 ATTRIBUTES

1. Search attributes — are characteristics that a customer can be evaluated before

to purchasing the goods and/or services.

EXAMPLE : Phone's color, price, specification — camera

quality and internal storage

2. Experience attributes — are characteristics that can be evaluated only after

purchase or during consumption or use.

EXAMPLE : Shampoo — softness sa buhok or mabula

3. Credence attributes — are any aspects of a good or service that the customer

must believe in but cannot personally evaluate even after

purchase and consumption.

EXAMPLE : Gulay sa super market na hindi daw

ginamitan ng kahit anong fertilizer

 Although these 3 attributes are commonly used by consumer, pwede din sya magamit sa
OPERATION

Operation of a company use these 3 attributes as basis in designing or to ensure that the
goods and services meet the expectation or characteristics that consumer look at when
purchasing or aquiring goods and services

7 Reasons Why We Should Listen To Our Customers

1.They help you improve

- Through their feedback/ comments we can identify what's to improve in our

business. We can identify where we are lacking off. We have to be reminded that the
best business decisions are an outcome of research and analysis and not wild guesses.

2.They are the most genuine feedback providers

- They are the users so they are the best testers. They comments and feedbacks are
better than the research/articles we can find in the internet.

3. Empathy is the key to a delightful relationship

- Happy and delighted customers gives a long term customer for the business.
Listening and understanding them build a relationship. Let's keep in mind that if we
failed to listen to them they became more dissatisfied.

4.Listening to the customers gives them a feeling of belongingness

- Alan Weis said " Ask the customer to be part of the solution & don't view them as
part of the problem " here enters the line that customers are always right. If you show
to them that they are valuable, then there we can only be able to retain them. After all
the products and services are designed for customers.

5.It helps you generate more leads

- Nowadays, when competitors are only a step away, it is very difficult to bring new
leads. Their unhappy customers are your prospects. Listening to them can build their
 trust in you and at the same time it can also help the business to avoid the reasons of
why customers became unhappy.

6.Word of mouth

- One of the oldest way of promoting but until now is very effective way of promoting.
When we gain the trust of our customers they became motivated and have feeling of
referring our product/ service to the people because they are satisfied.

7. Building loyalty is important

- When we have a connection with our customers the more we learn from them and
the better we improve our products/services. Let's not underestimate the benefits and
advantage of customer satisfaction. The more they are satisfied the more they will stay
and become loyal to our company.
 4-3 Designing Manufactured Goods

DEFINITION
- Designing manufactured goods is the process of designing parts, components or
products for ease of manufacturing with an end goal of making a better product at a
lower cost. This is done by simplifying, optimising and refining the product design

IMPORTANCE
- It helps to create and keep customers by providing them a good quality of products
that meets their satisfactions and expectation.

EXAMPLE
- Automobile, computer or textbook; design involves determining technical
specifications such as dimensions, tolerances, materials and purchased components;
or choice of fonts and page layout for textbook
 DESIGNING GOODS AND SERVICES
CBME1

What is good and service design?

Service design is the coordination and combination of people, communication,
and material components to create quality service. Goods/product design is the
combination of manufacturing capabilities with product and business
knowledge to convert ideas into physical and usable objects.

What is the difference between good and service design?

Good design focuses on creating aesthetically pleasing, functional, and durable
products that meet the needs of the target market. Service design, on the other
hand, refers to the design of intangible products or services, such as a bank's
online banking platform, a ride-sharing app, or a restaurant's ordering process.

Integrated Framework for Goods and Service Design

STEP 1&2 - Strategic Mission, Analysis and Competitive Priorities
This step requires a significant amount of research and innovation involving
marketing, engineering, operations, and sales functions and should involve
customers, suppliers and employees throughout the value chain.

STEP 3 - Customer Benefit Package Design and Configuration

Essentially CBP design and configuration choices revolve around solid
understanding of customer needs and target markets, and the value that
customers place on such attributes as the following:

Time strategy in order to reduce the waiting time of customers and faster
access to their products and services satisfy them.

Place locating their business to places where customers will benefit in terms of
accessibility.

Information giving customers more information and knowledge about their

products and services aside from the product or service that they paid for.

Entertainment provides few entertainment/activities for customers to enjoy the

place or lessen the boredom while waiting.

Exchange allows the customers to pick what they want to do in order to

purchase your product. They can either choose to shop online and pick it up
from the store or choose a product from their store and get it delivered to their
house.

Form physical appearance is important when it comes to manufacturing

products since it can attract customers and having a good form of products can
satisfy more customers

STEP 4 - Detailed Goods, Services, and Process Design

If a proposal about a certain product survives the concept stage then it will go
on to the next stage wherein it will undergo the process of creating it and
developing the product and service in order to be presented and showcased to
the customers.

Step 4a Manufactured Good Design and Development

focuses on the physical characteristics such as materials, color and so on.
Mostly done by the artist or engineers of the business to deliver the
requirements of the customer into physical specifications.

Step 4b Process Selection and Design

The process by which the goods are manufactured. Includes the
configuration of machines and labor with proper communication and
coordination with the designers of the good.
 Step 4c Service and Service Delivery System Design
Planning and training the employees and all workers in the business on
how to execute the service that they will be providing for their customers.
Going on the process on how they will satisfy their customers.

Step 4d Service Encounter Design

Creates a customer experience that will meet or exceed customer
expectations. This includes determining what the customer will see and
feel when they interact with a specific company and what they will
experience after the interaction is over.

STEP 5 - Market Introduction/Deployment

Products and services in this step are now advertised, marketed and offered to
the customers. It also includes the process of shipping and delivering the
products to the warehouses and retail stores. For service entities it is the
training and hiring of employees as well as building branch and retail stores.

STEP 6 - Marketplace Evaluation

A poor place can affect the production and design of a product or service of a
business. A failed product is a result of ineffective operations. The final step is to
constantly evaluate how well the goods and services are selling, and customers'
reaction to them.

PRODUCT LIFE CYCLE

*Introduction/Introductory Phase
Starting a plan like researching, product development, process modification and
enhancement and as well as supplier development.

*Growth Phase
This is where the product starts to stabilize and have an effective forecasting
and adding or enhancing of capacity may be necessary.

*Maturity Phase
Competitors are already established, high volume and innovative production
may be needed as well as improving cost control.

*Decline Phase
Products without special contributions in the business should be terminated or
replaced.
REFERENCES:
● https://www.studocu.com/id/document/universitas-muhammadiyah-yog
yakarta/operation-management/design-of-goods-and-services/39653961
?fbclid=IwAR1GMTBwbJY27ZYsG87PWB7VB1eklC-joqFF4HC7zHsF3tUlYE
QuUJSyNvE

● https://www.slideshare.net/ulymaniago/design-of-goods-services?fbclid=
IwAR1Z5CfUY-E_dlZI4-9hiefliGj3GggvW-2T25U_kAVgZC4OIvizd6rlOi8
Operations Management (CBME 1)
Group 11: Cortez and Minalabag

4-3 C: DESIGN FOR MANUFACTURABILITY

 Design for Manufacturability (DFM)

- It is the process of designing a product for efficient production at the highest level of
quality.

 Product Simplification
- It is the process of trying to simplify designs to reduce complexity and costs and
thus improve productivity, quality, flexibility, and customer satisfaction.
- One way of practicing the definition of design for manufacturability is through this.

Five Principles Examined During a DFM

1. Process – the process should use lower-capitalized methods for cost-effective
production.
2. Design – the more complex the design, the higher the risk.
3. Material – choosing the right materials in the early stages can save you time and
money. Therefore, your choice of materials has an impact on cost and quality.
4. Environment – each part of your product must be designed for the environment it
will be used.
5. Compliance / Testing – finally, testing must be thorough. All products and
components must comply with industry standards in each stage as well as with
safety and quality standards.
Group 2
Aragones, Merjoy
Araojo, Kim Andrea

CUSTOMER-FOCUSED DESIGN

Customer Focused Design

 The design of goods and services that reflects customer wants and needs.

Customer Requirements

 The voice of the customer.

Some examples of companies that uses customer focused design are Amazon, Netflix, Google, Apple,
and Subaru.

The design process must translate the voice of the customer into specific technical features that
characterize a design and provide the "blueprint" for manufacturing or service delivery. Technical
features are generally expressed in the language of designers and engineers; examples include the type
and amount of materials, size and shape of parts, strength requirements, service procedures to follow,
and employee behavior during service interactions.

Quality Function Deployment (QFD)

 A structured approach used in product development to ensure that customer needs and
preferences are integrated into the design process.
 An approach to guide the design, creation, and marketing of goods and services by integrating
the voice of the customer into all decisions.

Advantages of Customer Focused Design

1. Increase customer satisfaction

2. Improve business performance
3. Competitive advantage in the market

Disadvantages of Customer Focused Design

1. Complex

2. Subjectivity

3. Cost
References:

Operations Management and Total Quality Management by D.A. Collier, J. Evans, W. Lindsay

https://artkai.io/blog/customer-centric-design-process
https://www.forbes.com/sites/blakemorgan/2019/06/30/100-of-the-most-customer-centric-
companies/?sh=560971a463c3
https://smallbusiness.chron.com/disadvantages-customerfocused-company-23019.html
 TOLERANCE DESIGN AND THE TAGUCHI LOSS FUNCTION

TOLERANCE DESIGN

* the purpose of tolerance design is to ensure that product parts will function properly even if there are
small differences in their size or properties.

NOMINAL DIMENSION

* it refers to the estimated size or measurement of an object that may not exactly match its actual
dimensions.

TOLERANCE

* refers to the permissible variation or deviation in measurements, dimensions, or characteristics for a

specific manufacturing or usage of a product or its component.

NARROW TOLERANCE

* improves product functionality and performance, but tend to raise manufacturing costs because they
usually require higher-precision technology.

WIDE TOLERANCE

* reduce manufacturing costs but may have a negative impact on product performance.

TAGUCHI LOSS FUNCTION

GENICHI TAGUCHI

• a Japanese engineer and statistician that developed a methodology to improve quality and reduce
cost, known as the "Taguchi Method"

TAGUCHI LOSS FUNCTION

• any deviation from the desired target value or specification results in a monetary loss to society

LOSS FUNCTION

L(x) = k ( x-T )²

where:

L(x) - monetary value of the loss

T - target

x - actual value of the dimension

k - constant that translates the deviation into dollars

References: https://www.whatissixsigma.net/taguchi-loss-function/
 Design for Reliability

Reliability- probability of the product or service to perform to its intended function over a
specific period of time.

Design for Reliability is considered as a strategy in designing and developing a product.

Important Drivers for Designing Reliability

1.Understand Customer Requirements

2. Adequate Resources during designing and developing - having sufficient resources
3. Technical Competence of Designers - it plays an important role otherwise the product may
not be able to meet customer requirements. It includes skills, knowledge and ability of the
designer
4. Target Setting and Allocation - based on customer requirements or benchmarking.
5. Adequate safety margin- address variation in stress and strength to determine probability of
failure and help to mitigate risk
6. Robust Design - ensure the product or system can withstand variation in operating condition
without significant performance degradation
7. Parts Selection- it ensures the performance and longevity of the system or products which
minimize risk of failures.
8. Optimization of Design of Experiment- it brings a strategic plan to optimize variables that may
affect the process and output. It is used to determine the best way to achieve better results
without effects and changes in the production to the quality of products.
FACILITY AND WORK DESIGN
OBJECTIVES:
 Describe four layout patterns and when they should be used
 Explain how to design product layout using assemble-line balancing
 Explain the concepts of process design

I. Facility Layout - refers to the specific arrangement of the physical facilities. It is necessary whenever :
1) a new facility is constructed
2) There is a significant change in demand or throughput volume
3) A new good or service is introduced to the customer benefit package
4) Different processes, equipment, and/or technology are installed.

The purpose of this design is to minimized delays in materials handling and customer movement, maintain flexibility, use
labor and space effectively, promote high employee morale and satisfaction, minimize energy use and environmental
impact, provide for good housekeeping and maintenance, and enhance sale as appropriate in manufacturing aand
service facilities.

A. Product Layout - it is an arrangement based on the sequenced of operations that is performed during the
manufacturing of a good and delivery of service.

Wine production

https://www.pinterest.com/pin/516928863480370236/

Advantages
1. Higher output rates
2. Lower work-in-process inventories
3. Less material handling
4. Higher labor and equipment utilization, and simple planning and control system

Disadvantages
1. A breakdown of one equipment can cause the entire process to shut down.
2. A change in product design( introduction of new product) may require major changes in the layout.
3. Flexibility can be limited.
4. Require more costly specialized equipment
5. Provide little job satisfaction. Can be avoided by cross-training and frequent rotating jobs responsibilities.
B. Process Layout - consists of functional grouping of equipment or activities that do similar work .

https://www.pinterest.com/pin/shop--490118371939990153/

Advantages
1. Task can be moved in different sequences among departments
2. Compared to product layout, process layout provide more flexibility and generally require a lower investment in
equipment.
3. The failure of one equipment does not necessarily affect the process of work.
4. The diversity of job inherent in a process layout can lead to increased worker satisfaction
Limitations
1. Low equipment utilization
2. High materials handling cost
3. More complicated planning and control system.

C. Cellular Layout - the design is not according to the functional characteristics of equipment, but rather is based on
self-contained groups of equipment (called celss) needed for producing a particular set of goods or service.

https://blog.gotopac.com/2012/04/24/cellular-manufacturing/

 U-shaped arrangement of machines that is typical of cellular manufacturing. The cell looks similar to a product layout but
operates differently.
 Within thee cell, materials move clockwise or counterclockwise from one operation to the next
 The cell is designed to operate with one, two or three employees depending on the needed output during the day.

D. Fixed Position Layout - consolidates the resources necessary to manufacture a good or deliver a service, such as people,
materials, equipment, in one physical location.
 The production of large items such as heavy machine tools, airplanes, buildings, locomotives and ships usually accomplished in
a fixed position layout
 Example of this fixed position layout is the so called “project” classification of processes. DPWH project of express ways, major
hardware and software installation, sporting events, concerts.
 This requires high level of planning and control compared with the other types of layouts.

E. Facility Layout in Service organization - this organization use product, process, cellular, and fixed position layouts to organize
different types of work.
 The design of service facilities requires the clever integration of layout with the service scapes and process design to support
support service encounters.
https://zolmi.com/salon-layout https://study.com/academy/lesson/video/process-product-fixed-position-layouts.html
Video about facility layout

Comparison of basic layout patterns

Characteristics Product Layout Process Layout Cellular Layout Fixed-position
Demand volume High Low Moderate Very low
Equipment utilization High Low High Moderate
Automation potential High Moderate High Moderate
Setup/changeover Req. High Moderate Low High
Flexibility Low High Moderate Moderate
Type of equipment Highly specialized General Purpose Moderate Moderate
specialization specialization
II. Designing Product Layouts -
Product layouts in flow shops generally consist of a fixed sequence of workstations.
Workstations are generally separated by buffers (queues of work-in-process) to store work waiting for processing and
are often linked by gravity conveyors.
1. Flow blocking delay - occurs when a work center completes a unit but cannot release it because the in-process
storage at the next stage is full.
2. Lack of work delay - occurs whenever one stage completes works and no units from the previous stage are awaiting
processing.
3. An Assembly line - is a product layout dedicated to combining the components of a good or service that has been
created previously.

Assembly Line Balancing

The sequence of task required to assemble a product is generally dictated by its physical design. Clearly, you cannot put
the cap on a ballpoint pen until the ink has been inserted.
Assembly line balancing is a technique to group tasks among workstations so that each workstation has - in the ideal
case- the same amount of work.

Assembly-line balancing
focuses on organizing work
efficiently in flow shops.

Line-Balancing Approaches
With a large number of tasks, the number of possible workstation configurations can be very large, making the balancing problem
very complex.

8 task are required to assemble the individual parts:

1. Assemble wheels, bearings and axle hardware
2. Assemble brake housing and pad
3. Complete wheel assembly
4. Inspect wheel assembly
5. Assemble boot
6. Join boot and wheel subassemblies
7. Add line and final assembly
8. Perform final inspection.

III Designing Process Layouts

In designing process layouts, we are concerned with the arrangement of departments or work centers relative to each other. Two
major approaches are commonly used. The first focuses on the costs associated with moving materials or the inconvenience that
customers might experience in moving physical locations.
In general, work centers with a large number of moves between them should be located close to one another.
Here is the example of “Closeness ratings”
1. Absolutely necessary
2. Especially important
3. Important
4. Ordinary closeness ok
5. Unimportant
6. Undesirable

Using these ratings, the approach attempts to maximize the total closeness rating of the layout. Computer graphics and design
software are providing a major advances in layout panning.

Workplace and Job Design