LOM-Assignment Questions & Case : Chad’s Creative Concepts [pic] Q2: Consider Amazon. com, whose Web site enjoys millions of “hits” each day and puts customers in touch with millions of services and products. What are Amazon. com’s competitive priorities and what should its operations strategy focus on? The competitive priorities of Amazon are • Variety ( it offers millions of services and products),. • Low-cost (online sales), • consistent quality • delivery speed In my opinion its operations strategy should focus on Customer relationship-Variety. Amazon. om uses information technology and streamlined customer relationship and order fulfillment processes to reliably deliver a vast variety of items to its customers. Q4: FedEx built its business on quick, dependable delivery of items being shipped by air from one business to another. Its early advantages included global tracking of shipments using Web technology. The advancement of Internet technology enabled competitors to become much more sophisticated in order tracking. In addition, the advent of web-based businesses put pressure on increased ground transportation deliveries.
Explain how this change in environment has affected FedEX’s operations strategy, especially relative to UPS, which has a strong hold on the business- to- customer ground delivery business. The technological advances cut into the demand for FedEx’s traditional services, UPS uses its expertise in logistics and warehousing processes to deliver a very large volume of shipments on-time across the globe. To remain competitive, FedEx came up with new operations strategy- created two new ervices: FedEx Ground (focus on business-to-business deliveries via a recently procured trucking company) and FedEx Home Delivery (specializes in deliveries to residences ). Also, FedEx invested $100 million in processes to coordinate the flow of goods. The goals of FedEx is now low-cost operations and dependable delivery. Q6: Although all nine of the competitive priorities discussed in this chapter are relevant to a company’s success in the marketplace, explain why a company should not necessarily try to excel in all of them.
What determines the choice of the competitive priorities that a company should emphasize for its key processes. The determination of the choice of competitive priorities that should emphasize is based on the corporate strategy of a company. For example, the core process of Amazon. com is customer relationship. That means, the company aught to emphasize on consistent quality, delivery speed and variety. CASE: Chad’s Creative Concepts Summary: Chad’s Creative Concepts designs and manufactures wood furniture. The company began by producing custom-made wooden furniture.
As the company’s reputation grew and sales increased, they started to produce standard furniture. The sales of standard furniture also increased steadily. However, the company operates a single manufacturing process. As the custom furniture were more profitable. They gave priority to it. Then some problems occur. Their cost of storing inventories increased, the promised delivery time also increased. Capacity is being pushed and they have to find a way to solve these problems. Q1: What types of decisions must Chad Thomas make daily for his company’s operations to run effectively?
Over the long run? The decision Chad Thomas must make daily for his company’s operations to run effectively is the processes management. Determining the best process capacity with effective constraint management and making processes “lean” by eliminating activities that do not add value. He should design different processes for different products. Over the long run, he should also make decision about supply chains. Such as location, inventory management, forecasting, operations planning and scheduling and resource planning.
Therefore, he can help the company reduce the fixed cost and get for profits. He should also maintain the lead time and balance the sales and production. Q2: How did sales and marketing affect operations when they began to sell standard pieces to retail outlets? The sales of standard line increased steadily, leading to more regular scheduling of this product line. However, currently, the company operates a single manufacturing process (both custom furniture and standard furniture are manufactured) and custom furniture was always given priority because of higher profit.
As a consequence, the scheduled standard furniture pieces were left sitting around the plant in various stages of competition. They also have to increase lead times for the customers. Q3: How has the move to producing standard furniture affected the company’s financial structure? As the scheduled standard furniture pieces were left sitting around the plant in various stages of competition because of the production of custom furniture. The company has to spend more money on the storage of the inventories.
In other words, the production of standard furniture increased the fixed cost of the company. Q4: What might Chad Thomas have done differently to avoid some of the problems he now faces? According to the case, the company operates a single manufacturing process both for custom furniture and standard furniture. This is the main reason that leads to the problems. Chad Thomas should use different equipments and different labors for different furniture. Also, they can set up new factories to expend the business.
