Introduction Introduction to to Operations ManagementOperations Management

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ContentsContents1- What is Operations Management (OM)?1- What is Operations Management (OM)?2- Importance of OM .2- Importance of OM .3- OM decisions.3- OM decisions.4- OM's contributions to society.4- OM's contributions to society.5- OM of service & manufacturing organizations5- OM of service & manufacturing organizations6- The ever-changing world of OM6- The ever-changing world of OM7- Make or buy decision7- Make or buy decision8- Historical development of OM.8- Historical development of OM.

11 - -What is operations What is operations managementmanagement

OM definitionOM definition

Responsibilities of operations managersResponsibilities of operations managers

Difference between OM and PMDifference between OM and PM

1-The collection of people, technology, and systems within a company that has primary responsibility for providing responsibility for providing the organization’s products or services. the organization’s products or services.

2-The management of the direct recourses that are required to produce and deliver an organization's goods and services .

3- A discipline and profession that studies and practices the process of planning, designing, and operating production systems and subsystems to achieve the goals of the organization.

4- The business function responsible for planning, planning, coordinating, and controllingcoordinating, and controlling the resources needed to produce a company’s products and services.

5- The management of the 5- The management of the conversion processconversion process that that transforms inputs into outputs in the form of finished goods and transforms inputs into outputs in the form of finished goods and services.services.

INPUTS •Material•Machines•Labor•Management•Capital- Customer

TRANSFORMATIONPROCESS

OUTPUTS •Goods•Services

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Operations as a transformation Operations as a transformation processprocess

Inputs and Outputs of a production Inputs and Outputs of a production systemsystemInputsInputs

External:External:• Legal, Economic, Social, Technological

Market:Market:• Competition, Customer Desires, Product Info.

Primary Resources:Primary Resources:• Materials, Personnel, Capital, Utilities

OutputsOutputsDirectDirect• Products• Services

IndirectIndirect• Waste• Pollution• Technological Advances

The transformation process within The transformation process within OMOM

Input-transformation-output relationships for typical Input-transformation-output relationships for typical systemssystems

What is Operations What is Operations ManagementManagement? ?

• Operations management is the set of activities that create valuecreate value in the form of goods and services by transforming inputs into outputs

• Value addedValue added is the is the net increase between output product value and input net increase between output product value and input material valuematerial value ( (The value of the outputs is greater than the value of the outputs is greater than the value of the inputsinputs, resulting in the profitprofit or the benefitbenefit for government or non-profit organizations)

• All types of organizationsAll types of organizations, manufacturing or service, large or small, transform inputs into outputstransform inputs into outputs.

• Every organization has OM functionEvery organization has OM function, since all organizations provide products or servicesprovide products or services, but the function may be formal formal or informal or informal (In many In many smallersmaller organizations operations management organizations operations management may be done by people who perform many other types of task such as may be done by people who perform many other types of task such as marketing and accountingmarketing and accounting) )

What's the difference between PM and What's the difference between PM and OMOM??

• Some thinks that they are really one and the same by different names.

• others think that production management is just a subset of subset of operations management because operations management because operations involve more than just operations involve more than just production.production.

• if if servicesservices concept concept addedadded to the to the production management it can be production management it can be called operations management.called operations management.

What responsibilities do operations managers What responsibilities do operations managers

have?have? • Direct responsibilitiesDirect responsibilities :• the activities which are directly related to producing and producing and

delivering products and services. delivering products and services. • Indirect responsibilitiesIndirect responsibilities :• the activities involved in interfacing with other parts of interfacing with other parts of

the organisationthe organisation. • Broad responsibilitiesBroad responsibilities :• a wider set of tasks that involve scanning the business, scanning the business,

social and political environmentsocial and political environment in which the organization exists in order to understand its context.

Responsibilities of OM

Products & servicesProducts & services

PlanningPlanning– CapacityCapacity

– LocationLocation

–– Make or buyMake or buy

– LayoutLayout

– ProjectsProjects

– SchedulingScheduling

Controlling/ImprovingControlling/Improving– InventoryInventory

– QualityQuality

OrganizingOrganizing– Degree of centralizationDegree of centralization

– ProcessProcess selectionselection

StaffingStaffing– Hiring/laying offHiring/laying off

– Use of OvertimeUse of Overtime

DirectingDirecting– Incentive plansIncentive plans

– Issuance of work ordersIssuance of work orders

– Job assignmentsJob assignments

– CostsCosts

– ProductivityProductivity

((22 ) )Importance of OMImportance of OM

Importance of OMImportance of OM1- 1- Operations is an important Operations is an important part ofpart of every organizationevery organization 2- We should 2- We should know howknow how goods and services are produced ( goods and services are produced (All managers should have All managers should have

an understanding the main principles and tools of OM)an understanding the main principles and tools of OM)3- 3- It is responsible for the customer fulfillment aspects of an organization. Thus, It is responsible for the customer fulfillment aspects of an organization. Thus, it it

manages customer satisfactionmanages customer satisfaction. . 4- OM is such a 4- OM is such a costly part of an organizationcostly part of an organization. (For most organizations it . (For most organizations it

absorbs a huge percentage of required capital )absorbs a huge percentage of required capital ) Companies need to have Companies need to have efficient operations to surviveefficient operations to survive. . To succeed, a firm To succeed, a firm

must have must have a strong operations functiona strong operations function teaming with the other teaming with the other organization functionsorganization functions..

5- OM 5- OM responsible to increase productivity and profitabilityresponsible to increase productivity and profitability. . Increasing overall productivity leads to economic growth and a higher standard of Increasing overall productivity leads to economic growth and a higher standard of living.living.

6- Operational decision-making 6- Operational decision-making requires a long-term perspectiverequires a long-term perspective and and requires requires inputs from all business functionsinputs from all business functions..

OM Decisions tend to be costly and difficult to reverseOM Decisions tend to be costly and difficult to reverse

Strategic options managers use to gain Strategic options managers use to gain competitive advantagecompetitive advantage

• 28% - 28% - Operations Management (+quality?)Operations Management (+quality?)• 18% - Marketing/distribution18% - Marketing/distribution• 17% - Momentum/name recognition17% - Momentum/name recognition• 16% - Quality/service16% - Quality/service• 14% - Good management14% - Good management• 4% - Financial resources4% - Financial resources• 3% - Other3% - Other

In briefIn brief…..….. • OM plays an important, although not always obvious, role in

societies in which we live. • It is responsible forIt is responsible for the food we eatfood we eat and even the table table

on eat it; it provides us with the clothinclothing we wear, with vehiclesvehicles we use for transportation, and with the "toys""toys" we use for recreation, from baseballs and bats to computer games.

• In other words, operations management affects In other words, operations management affects nearly all aspects of our day-to-day activities. nearly all aspects of our day-to-day activities.

Some definitionsSome definitions

• Productivity:Productivity:• The ration of what is produced by an operation or process to what

is required to produced it, that is ,the output from the operations divided by the input to the input operation (ratio of output to input)

• Efficiency:Efficiency: • producing something at the producing something at the lowest possible costlowest possible cost• Effectiveness:Effectiveness: • doing the right things to create the most value for the firm• ValueValue• quality divided by price• Competitive advantage:Competitive advantage: competitive advantage is an advantage over competitors gained by

offering consumers greater value, either by means of lower prices or by providing greater benefits and service that justifies higher prices

3- OM decisions3- OM decisionsStrategicTacticaloperational

Main operational Main operational decisionsdecisions

• Where should we locate our facilitylocate our facility• How much capacitycapacity do we need• What should we make,make, what should we buybuy• What technologyechnology should we use• How do we insure appropriate qualityquality• Who should we use as vendorsvendors• How much inventoryinventory do we need • How should we scheduleschedule our resources

Critical decisions of OMCritical decisions of OM• Product & service design.Product & service design.• Quality management.Quality management.• Process design.Process design.• Capacity & location of facilities.Capacity & location of facilities.• Layout of facilities.Layout of facilities.• Human resource & Job design.Human resource & Job design.• Supply-chain management.Supply-chain management.• Inventory management.Inventory management.• Scheduling.Scheduling.• Maintenance.Maintenance.

OM decisionsOM decisionsOperations managers must make decisions on three levels:Operations managers must make decisions on three levels:

Strategic decisionsStrategic decisions

• senior management responsibility senior management responsibility • More More broad broad in nature in nature• Determine the success of an organization's strategyDetermine the success of an organization's strategy, , • Very risky and hard to Very risky and hard to reversereverse• Have significant Have significant long - termlong - term impact, ,and impact, ,and• less frequent.less frequent.• Examples:Examples:• How will we make the product?• Where do we locate the facility?• How much capacity do we need?• When should we add more capacity?

Tactical decisionsTactical decisions

• Medium-Medium- range decisions focus on resource needs, schedules, & range decisions focus on resource needs, schedules, & quantities to produce quantities to produce

• Tactical decisions are Tactical decisions are frequentfrequent, must align with strategic , must align with strategic decisions.decisions.

• Involves resource allocation and utilization.Involves resource allocation and utilization.• Involves a Involves a moderate degree of uncertainty and riskmoderate degree of uncertainty and risk....• They are the link between lower and high level managementThey are the link between lower and high level management• Examples:Examples:• How many workers do we need?How many workers do we need?• When do we need them?When do we need them?• Should we work overtime or put on a second sift?Should we work overtime or put on a second sift?• When should we have material delivered?When should we have material delivered?• Should we have a finshed goods inventory?Should we have a finshed goods inventory?

Operational decisionsOperational decisions• Involves a short time horizonshort time horizon.

• Involves very little uncertainty and risk.• Examples :Examples :

– What jobs do we work on today or this week?– To whom do we assign what task?– What jobs have priority?

OM decisionsOM decisions

Strategic Tactical Operating

Characteristics

Longer term decisions

Medium term decisions

Shorter term decisions

Responsibility of the senior management

Responsibility of middle and senior managers

Responsibility of middle and lower management levels

High capital investment

Broad in nature Narrow in scope

These decisions concern the day-to-day activities of workers

44 - -OM's contributions to OM's contributions to societysociety

Operations management's Operations management's contributions to societycontributions to society

OM's contributions to society:-OM's contributions to society:-((A(- Higher Standard of Living A(- Higher Standard of Living

)B( - Better Quality Goods and )B( - Better Quality Goods and ServicesServices

)C(- Concern for the Environment)C(- Concern for the Environment

)D(- Improved Working Conditions)D(- Improved Working Conditions

(A(- Higher standard of living

• A major factor in raising the standard of living in a society is the ability ability to increase its productivityto increase its productivity.

• Higher productivity is the result of increased efficiency in operationsHigher productivity is the result of increased efficiency in operations, which in turn translates into lower cost goods and serviceswhich in turn translates into lower cost goods and services.

• Thus, higher productivity provides consumers Thus, higher productivity provides consumers with more discretionary income, which with more discretionary income, which contributes to their higher standard of living. contributes to their higher standard of living.

1-Improve productivity1-Improve productivity

3- Lower cost of goods & services3- Lower cost of goods & services

5-Higher standard of living5-Higher standard of living

Higher standard of livingHigher standard of living

2- Result of increased 2- Result of increased efficiency in operationsefficiency in operations

4- More income4- More income

)B( - Better quality of goods and )B( - Better quality of goods and servicesservices

• One of the many consumer benefitsconsumer benefits of increased competition is the higher-quality products that are available today.

• Quality standards are continually increasingQuality standards are continually increasing. • Many companies today have established Six-Sigma quality Six-Sigma quality

standardsstandards (pioneered by Motorola in the late 1980s), resulting in no more than 3.4 defects per million3.4 defects per million opportunities.

• Such high quality standards were onceonce considered not only prohibitively expensive but also virtually impossible to impossible to achieve even if cost wasn't a consideration.achieve even if cost wasn't a consideration.

• Today we know that such high quality is not only very Today we know that such high quality is not only very possible, but also results in lower costs, because firms can possible, but also results in lower costs, because firms can reduce their waste and rework. reduce their waste and rework.

((CC -) -)Concern for the Concern for the environmentenvironment

Many companies today are taking up the Many companies today are taking up the challenge to challenge to produce environmentally friendly produce environmentally friendly products with environmentally friendly products with environmentally friendly processesprocesses, all of which falls under the purview , all of which falls under the purview of operations management.of operations management.

• Recycling and concern for air and water Recycling and concern for air and water qualityquality

(D-)Improved working conditions• Managers recognize the benefits of providing workers with better benefits of providing workers with better

working conditions. working conditions. • This includes not only the work environmentwork environment but also the design of design of

the jobs themselvesthe jobs themselves. • Workers are now encouraged to participate in improving participate in improving

operations through suggestionsoperations through suggestions. • After all, who would know betterwho would know better how to do a particular

operation than that person who does it every daythan that person who does it every day. • Managers also have learned that there is a very clear very clear

relationship between satisfied workers and satisfied relationship between satisfied workers and satisfied customers, especially in service operations. customers, especially in service operations.

• ((EmpowermentEmpowerment :The concept of encouraging and authorizing workers to take the initiative to improve operations, reduce costs, and improve product quality and customer service.)

55 - -OM of service and OM of service and manufacturing manufacturing organizationsorganizations

OM of service and manufacturing OM of service and manufacturing organizationsorganizations

• Initially, operations management concepts focused almost focused almost entirely on manufacturingentirely on manufacturing.

• As countries become more developedmore developed, services continue to represent a larger percentage of their economies. larger percentage of their economies.

• Now Less than 20%Now Less than 20% of all jobs are in manufacturing (and they are and they are declining)declining)

• Almost 80% of jobs are in the service sector (and they are increasing)

• Nearly half of all jobs are in POM

Services as a percent of Gross Domestic Product )GDP( Services as a percent of Gross Domestic Product )GDP( for different countriesfor different countries

U.S. U.S. manufacturingmanufacturing vs service vs service employmentemployment

Year Mfg. Service45 79 2150 72 2855 72 2860 68 3265 64 3670 64 3675 58 4280 44 4685 43 5790 35 6595 32 6800 30 70

1850

Services

Industry

Farming

80%

40%

0

U.S. Employment, % Share

Development of the service Development of the service economyeconomy

1950 1900 2000

Growth in services in the United StatesGrowth in services in the United States

Service and manufacturing Service and manufacturing similaritiessimilarities

• All use technology • Both have quality, productivity, & response issues• All must forecast demand• Each will have capacity, layout, and location issues• All have customers and suppliers• All have scheduling and staffing issues

Manufacturing vs. serviceManufacturing vs. service

Characteristic Manufacturing Service1-Output

2-Customer contact

3-Uniformity of input

4-Labor content

5-Uniformity of output

6-Measurement of productivity

7-Opportunity to correct

Tangible

Low

High

Low

High

Easy

High

Intangible

High

Low

High

Low

Difficult

Lowquality problems

High

Manufacturing vs. serviceManufacturing vs. service1- Customer contact: Service, by nature, involves a much high degree of customer contact than

manufacturing. The performance of service often occurs at the point of consumption. Manufacturing allows a separation between production and consumption, so that manufacturing can occur away from the consumer. Customer are sometimes apart of the system (self-service operations-shopping +gas stations) so tight control on process is impossible

2- Uniformity of input:• Service operations are subject to greater variability of input than typical

manufacturing operations. • Each patient, each client and each auto repair presents a specific problem that

often must be diagnosed before it can be remedied• Manufacturing operations often have the ability to carefully control the

amount of variability of input and thus achieve low variability in outputs. Job requirements for manufacturing are generally more uniform than those for service

Manufacturing vs. serviceManufacturing vs. service3- 3- Labor content of jobs:Labor content of jobs: Many services involve a higher labor content than manufacturing

operations4- 4- Uniformity of outputUniformity of outputBecause high mechanization generates products with low variability ,

manufacturing tends to be smooth and efficient , service activities sometimes appear to be slow and awkward and output is more variable. Automated services are exception to this

5- 5- Measurement of productivityMeasurement of productivityMeasurement of productivity is more straightforward in manufacturing

due to the high degree of uniformity of most manufacturing items. In service operations , variations in demand intensity and in

requirements from job to job make productivity measurement more difficult

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•Attributes of Attributes of GOODSGOODS

Tangible productTangible product

- Product can be inventoried.- Some aspect of quality are measurable.- Selling is distinct from production.- Site of facility is important for cost.- Often easy to automate.- Revenue is generated primarily from the tangible product. Labor intensive

•Attributes of Attributes of GOODSGOODS

Tangible productTangible product

- Product can be inventoried.- Some aspect of quality are measurable.- Selling is distinct from production.- Site of facility is important for cost.- Often easy to automate.- Revenue is generated primarily from the tangible product. Labor intensive

Goods vs. servicesGoods vs. services•Attributes of SERVICESAttributes of SERVICES

• Intangible ProductsIntangible Products- Many services cannot be inventoried.- Many aspects of quality are difficult to measure.- Selling is often a part of the service.Provider, not product, is often transportable.Site of facility is important for customer contact.Service is often difficult to automate.Revenue is generated primarily from the intangible service.Capital intensive

•Attributes of SERVICESAttributes of SERVICES• Intangible ProductsIntangible Products

- Many services cannot be inventoried.- Many aspects of quality are difficult to measure.- Selling is often a part of the service.Provider, not product, is often transportable.Site of facility is important for customer contact.Service is often difficult to automate.Revenue is generated primarily from the intangible service.Capital intensive

66 - -The ever - changing world The ever - changing world of OMof OM

The ever-changing world of The ever-changing world of OMOM

• Operations management is continuously changing to Operations management is continuously changing to meet the new and exciting challenges of today's meet the new and exciting challenges of today's business world. business world.

• This ever-changing world is This ever-changing world is characterized by increasing characterized by increasing global competition and advances in technology. Emphasis is global competition and advances in technology. Emphasis is also shifting within the operations function to link it more also shifting within the operations function to link it more closely with both customers and suppliers. closely with both customers and suppliers.

• Here we will consider these issuesHere we will consider these issues:

((AA -) -)Increased global Increased global competitioncompetition

• (Global (economy, village, and landscape): are terms used to describe how the world is becoming smaller, and countries are becoming more dependent on each other.

• The world is rapidly transforming itself into a single global economy, which referred to as a global village or global landscape. Markets once dominated by local or national companies are now vulnerable to competition from literally all corners of the world. For example, in the 1960s, only 7 percent of the firms in the United States exposed to foreign competition; by the late 1980s, this figure exceeded 70 percent, and that percentage has continued to grow. Consequently, as companies expand their business to include foreign markets, so too must the operations management function take a more global perspective in order for companies to remain competitive. To s prosper in such a global marketplace companies must excel in more than one c dimension, which previously was the norm.

Ford’s Global Network to Support the Manufacturing Ford’s Global Network to Support the Manufacturing of the Escortof the Escort

((BB -) -)Advances in technologyAdvances in technology

• Advance in technology in recent years have had a significant effect on the OM function:

• IT+ automation + Internet• Competition• Product life cycle• New jobs• Robots• E-???

((CC -) -) Linking OM to customers & Linking OM to customers & supplierssuppliers

• In the pastIn the past, most manufacturing organizations viewed operations strictly as an internal function that hadinternal function that had to be buffered from the external environment by other organizational functions.

• Orders were generated by the marketing functionmarketing function; supplies and raw materials were obtained through the purchasing functionpurchasing function; capital for equipment purchases came from the finance function; the labor force was obtained through the human resources functionhuman resources function; and the product was delivered by the distribution functiondistribution function

• Now more and more firms are recognizing the competitive advantage achieved when the transformation process is not is not isolatedisolated, as when customers are invited to view their operating as when customers are invited to view their operating facilities firsthand facilities firsthand

((CC -) -) Linking OM to customers & Linking OM to customers & supplierssuppliers

• companies are working more closely with suppliers. Firms like Toyota, companies are working more closely with suppliers. Firms like Toyota, have suppliers deliver product directly to the factory floor, eliminating have suppliers deliver product directly to the factory floor, eliminating need for a stockroom. need for a stockroom.

• The relationship between the transformation processes of suppliers The relationship between the transformation processes of suppliers and customer often referred to as a and customer often referred to as a product's value chain.product's value chain.

• A value chain consists of all the steps actually add value to the A value chain consists of all the steps actually add value to the product. This concept helps managers to eliminate all non added steps product. This concept helps managers to eliminate all non added steps (such as inspections and inventory) and consequently results in a (such as inspections and inventory) and consequently results in a higher of dependence among the value-added functions within the higher of dependence among the value-added functions within the chain. chain.

• This integration of both suppliers and customers into the This integration of both suppliers and customers into the transformation process to blur the boundaries between what were transformation process to blur the boundaries between what were previously totally independent organizations (Virtual enterprises)previously totally independent organizations (Virtual enterprises)

77 - -Make or buyMake or buy??

Make or buyMake or buy??• Many organizations buy parts or contract out services, for a

variety of reasons. Among those factors are:• 1- Available capacity:1- Available capacity:• If an organization has available the equipment, necessary

skills, and time, it often make sense to produce an item or perform a service in-house. The additional costs would be relatively small compared with required to buy items or subcontract services.

• 2- Expertise:2- Expertise:• If a firm lacks the expertise to do a job satisfactorily, buying

might be a reasonable alternative.

Make or buyMake or buy??3- Quality consideration:3- Quality consideration: Firms that specialize can usually offer high quality than an organization can

attain itself. Conversely, unique quality requirements or the desire to closely monitor quality may cause an organization to perform a job itself.

4- The nature of demand:4- The nature of demand: When demand for an item is high and steady, the organization is often better

off doing the work itself. However, wide fluctuations in demand or small orders are usually better handled by specializations who are able to combine orders from multiple sources, which results in a higher volume and tends to offset individual buyer fluctuations.

Make or buyMake or buy??5- Cost:5- Cost:Any cost savings achieved from buying or making must be weighted against the

preceding factors. Cost saving might come from the item itself or from transportation cost savings. If there are fixed costs associated with making an item that cannot be reallocated if the service or product is outsourced , that has to be recognized in the analysis. Conversely, outsourcing may help a firm avoid incurring fixed costs.

6- Risk:6- Risk:Outsourcing may involve certain risks. one is loss of control operations. Another

is the need to disclose propriety information.In some cases , a firm might choose to perform part of the job itself and let others

handle the rest in order to maintain flexibility and to hedge against loss of a subcontractor . If part or all the work will be done “ in-house”, capacity alternatives will need to developed

88 - -Historical development Historical development of OMof OM

Historical development of Historical development of OMOM

Prior to 1900:Prior to 1900:– Cottage industry produced custom-made goods.– Watt’s steam engine in 1785.– Whitney’s standardized gun parts in 1801.– Industrial Revolution began at mid-century.

Scientific Management )Frederick W. Taylor(:Scientific Management )Frederick W. Taylor(:– Systematic approach to increasing worker productivity through time study,

standardization of work, and incentives.– Viewed workers as an interchangeable asset.

Other Management Pioneers:Other Management Pioneers:– Frank and Lillian Gilbreth

• Motion study and industrial psychology– Henry L. Gantt

• Scheduling and the Gantt chart

Historical development of Historical development of OMOM

Moving Assembly Line )1913(:Moving Assembly Line )1913(:– Labor specialization reduced assembly time.

Hawthorne Studies:Hawthorne Studies:– Yielded unexpected results in the productivity of Western Electric plant

workers after changes in their production environment.– Led to recognition of the importance of work design and employee

motivation.

Operations Research )Management Science(:Operations Research )Management Science(:– Outgrowth of WWII needs for logistics control and weapons-systems design.– Seeks to obtain mathematically optimal (quantitative) solutions to complex

problems.OM Emerges as a Field:OM Emerges as a Field:

– 1950–1960, OM moved beyond industrial engineering and operations research to the view of the production operation as a system.

– 1950–1960, OM moved beyond industrial engineering and operations research to the view of the production operation as a system

Historical development of Historical development of OMOM

The Marriage of OM and IT:The Marriage of OM and IT:– Integrated solutions approaches

• Business process reengineering• Supply chain management• Systems integration (SAP)

Operations Management in Services:Operations Management in Services:– OM concepts can apply to both manufacturing and service

operations.Integration of Manufacturing and Services:Integration of Manufacturing and Services:

– Conducting world class operations requires compatible manufacturing and service operations

Last wordLast word• Shifts from cost and efficiencycost and efficiency to valuevalue, from mass production to lean lean

productionproduction, from manufacturing technology to information technologyinformation technology, and from national economy to world economyworld economy have made OM critically OM critically important in modern businessimportant in modern business.

• Workers are differentWorkers are different; they demand increasing levels of empowerment and more meaningful work.

• Customers are differentCustomers are different, their demands and expectations are much higher. • Technology is differentTechnology is different; computers & automation have dramatically changed

the nature of work, requiring constant learning and more abstract thinking. • Finally the environment is differentenvironment is different, we live in a global business

environment without boundaries .• Such changes in business are occurring at an increasingly rapid pace, and we

can expect them to continue in the future. Operations managers clearly face Operations managers clearly face important challenges in preparing for this century.important challenges in preparing for this century.

Last wordLast word??• “Paying attention to customers and knowing what they

want is a fundamental and important beginning.fundamental and important beginning. • However, given that several competing companies pay

attention to what customers want, the key to competitiveness the key to competitiveness then becomes then becomes production capabilityproduction capability. What differentiates winners from losers is that winners are better able to consistently provide products and provide products and services that are competitive with regard to services that are competitive with regard to quality, price, time and agilityquality, price, time and agility