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Order winners and qualifiers
Order Qualifiers and WinnersDefined
•Order qualifiers are the basic criteria that permit the firm’s products to be considered as candidates for purchase by customers
•Order winners are the criteria that differentiate the products and services of one firm from another
LO 3
Order Qualifiers and Winners
• For autos product quality is now an “order qualifier”
• “order winners” for autos vary greatly by the bundle of features desired
• In general criteria such as cost or specific features or capabilities could be order winners or qualifiers
LO 3
Order Winners and Order Qualifiers
• These are criteria used by customers in service or product selection.
• Order Winners are criteria for differentiating services or products of one firm from those of another.– Price, quality, time, flexibility, after sales
support, reputation, etc.• Order Qualifiers are demonstrated levels of
performance required to do business in a particular market segment.
Order winners and qualifiers
Low HighNegative
Order Winners
Qualifiers
Positive
Neutral
Achieved Performance
Com
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Adding ‘Delights’
Low HighNegative
Order Winners
Qualifiers
Positive
Neutral
Achieved Performance
Com
petiti
ve B
enefi
t
Delights
Low HighNegative
Order Winners
Qualifiers
Positive
Neutral
Achieved Performance
Com
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ve B
enefi
t
Delights
Delights become order winners and order winners become qualifiers
What service dimensions are delight, order winners and qualifiers – now, and in the future?
Delights
Order Winners
Qualifiers
Today Tomorrow
Delights
Order Winners
Qualifiers
Today Tomorrow
Budget Hotel Chain
Central reservation
Location (autoroutes)Location (restaurants)
PriceLoyalty cards
Central reservationLocation (autoroutes)
Location (restaurants)PriceLoyalty cardsCleanlinessDécor
CleanlinessDécor
Service
?
Delights
Order Winners
Qualifiers
Today Tomorrow
Central reservation Price
Location (autoroutes)Location (restaurants)
PriceLoyalty cards
Central reservationLocation (autoroutes)Location (restaurants)
Location (restaurants)PriceLoyalty cardsCleanlinessDécor
CleanlinessDécor
Service
?
Budget Hotel Chain
Delights
Order Winners
Qualifiers
Central reservationLocation (autoroutes)Location (restaurants)
Location (restaurants)Price
Loyalty cardsCleanliness
Decor
Price
What aspects of service will form tomorrows delights, order
winners and qualifiers?
What new capabilities will operations need to develop
to deliver these?
More, smaller sites
Cheap land costsBuild at low cost
Operate at low cost
Search processesFlexible design
Low fixed costsStandardization
Low overheadsLow labor costsNew technology
Partnership deals with restaurants
Budget Hotel Chain
Trade-offs
“Do you want it good, or do you want it Tuesday?”
“No such thing as a free lunch.”
“You can’t have an aircraft which flies at the speed of sound, carries 400 passengers and lands on an aircraft carrier. Operations are just the same.” (Skinner)
“Trade-offs in operations are the way we are willing to sacrifice one performance objective to achieve excellence in another.”
MAN 3504 - Chapter 2 14
Order Winners and Order Qualifiers
• Order Qualifier: The level of a product characteristic(s) that allow a product to be considered for selection
• Order Winner: The level of a product characteristic(s) that drive the customer decision to select a product
• Order winners/qualifiers are dynamic– Changes as customer requirements change– Changes as competitive products change
MAN 3504 - Chapter 2 15
Order Winners and Order Qualifiers
• Order winners become drivers for operations strategy– COST Operations Efficiency– QUALOITY/RELIABILITY Quality at Design/Zero Defects– VARIETY/CUSTOMIZATION Recognition of
customer needs– SPEED OF SERVICE/DELIVERY Supply Chain Coordination
• Focused Operations - few order winning characteristics
• Operations as a driver for corporate strategy
MAN 3504 - Chapter 2 16
Operations Strategy: Services vs. Manufacturing
• Operational Strategies differ in implementation– Cost Strategy: Cost may be reduced in materials or
manufacturing locations versus in services is based on process standardization and the level of resources
• Manufacturing: tangible product, versus Service: “it falls on your foot and it does not hurt”
• Difficult to differentiate between services and products as products are bundled with services
MAN 3504 - Chapter 2 17
Operations Strategy: Product Life Cycles
• The life cycle of a product has an effect on the operations strategy– Birth Stage: Product Design– Growth Stage: Capacity Management– Mature Stage: Increasing Efficiency and Quality– Decline Stage: Cost minimization and resource
relocation
MAN 3504 - Chapter 2 18
Product Design/ Redesign Process
• Product Design is critical
• Must match critical customer requirements
• Design Steps
Determine Customer Requirements
Idea Generation/Solutions
Initial Design/Prototypes
Design Review
Complete Functional Specifications
Initial Production and Market Test
Full Production
marketing
engineering design
production/manufacturing/supply chain/
quality
Hayes Wheelright Matrix
Copyright 2006 John Wiley & Sons, Inc. 2-20
Strategic Decisions in Operations
Products
Services Process
and
Technology
Capacity
Human
Resources Quality
Facilities Sourcing Operating
Systems
Copyright 2006 John Wiley & Sons, Inc.
2-21
Operations Strategy: Products and Services
• Make-to-Order– products and services are made to customer specifications
after an order has been received
• Make-to-Stock– products and services are made in anticipation of demand
• Assemble-to-Order– products and services add options according to customer
specifications
Copyright 2006 John Wiley & Sons, Inc. 2-22
Production Strategy:Processes and technology
• Project– one-at-a-time production of a product to customer order
• Batch Production– systems process many different jobs at the same time in
groups (or batches)• Mass Production
– large volumes of a standard product for a mass market• Continuous Production
– used for very high volume commodity products
Copyright 2006 John Wiley & Sons, Inc.
2-23
Product-Process Matrix
Source: Adapted from Robert Hayes and Steven Wheelwright, Restoring the Competitive Edge: Competing Through Manufacturing (New York: John Wiley & Sons, 1984), p. 209
Copyright 2006 John Wiley & Sons, Inc. 2-24
Mor
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ProjectConstruction of the aircraft carrier USS Nimitz was a huge project that took almost 10 years to complete.
Batch ProductionAt Martin Guitars bindings on the guitar frame are installed by hand and are wrapped with a cloth webbing until glue is dried.
Mass Production Here in a clean room a worker performs quality checks on a computer assembly line.
Continuous ProductionA paper manufacturer produces a continuous sheet paper from wood pulp slurry, which is mixed, pressed, dried, and wound onto reels.
Copyright 2006 John Wiley & Sons, Inc. 2-25
Service Strategy:Processes and Technology
• Professional Service– highly customized and very labor intensive
• Service Shop– customized and labor intensive
• Mass Service– less customized and less labor intensive
• Service Factory– least customized and least labor intensive
Copyright 2006 John Wiley & Sons, Inc.
2-26
Service-Process Matrix
Source: Adapted from Roger Schmenner, “How Can Service Businesses Survive and Prosper?” Sloan Management Review 27(3):29
Copyright 2006 John Wiley & Sons, Inc. 2-27
Professional ServiceA doctor provides personal service to each patient based on extensive training in medicine.
Service ShopAlthough a lecture may be prepared in advance, its delivery is affected by students in each class.
Mass ServiceA retail store provides a standard array of products from which customers may choose.
Service FactoryElectricity is a commodity available continuously to customers.
Less
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