Ethical Issues Essay

25278 Words Dec 28th, 2012 102 Pages
Chapter One Strategy and Competition
Chapter Overview

The purpose of this chapter is to introduce the student to a variety of strategic issues that arise in the manufacturing function of the firm.

Key Points
1. Manufacturing matters. This writer contends that the loss of the manufacturing base in the U.S. economy is not healthy and will eventually lead to an overall loss in the standard of living and quality of life in this country. It counters the argument that our evolution into a service economy is a natural and healthy thing. 2. Strategic dimensions. Along with cost and/or product differentiation, other dimensions along which firms distinguish themselves include (a) quality, (b) delivery speed, (c) delivery reliability, and
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However, it is rarely recognized that processes too have life cycles. Initially, new manufacturing processes have the characteristics of a job shop. As the process matures, automation is introduced. In the mature phases of a manufacturing


Chapter One

Strategy and Competition

process, most major operations are automated. A firm needs to match the phases of product and process life cycles to be the most successful in its arena. 7. Learning and experience curves. These are helpful in forecasting the decline in unit cost of a manufacturing process as one gains experience with the process. Learning curves are more appropriate when modeling the learning of an individual worker, and experience curves are more appropriate when considering an entire industry. 8. Capacity growth planning. Another important strategic issue in operations is determining the timing and sizing of new capacity additions. Simple models (make or buy problem) and more complex exponential growth models are explored in Section 1.11. In addition, some of the factors that determine appropriate location of new facilities is explored.

According to Wikipedia (the online encyclopedia), “strategy is a long-term plan of action designed to achieve a particular goal, most often ‘winning.’” Its root is from the – Greek strategos, which referred to a “military commander” during the age of Athenian Democracy. Strategy was originally conceived in the

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