Competitiveness
& Productivity
Dr.Arwa Ali
How effectively an organization
meets the wants and needs of
customers relative to others that
offer similar goods or services
To sell their goods & services in the
marketplace.
Competitiveness is an important
factor determining whether a company
prospers or fails .
Business organizations compete
through some combination of their
marketing and operations functions
Identifying consumer wants and
needs
Pricing and quality
Advertising and promotion
1. Product & service design
2. Cost of an organization’s output
3. location
4. Quality
5. Quick response
6. Flexibility
7. Inventory management
8. Supply chain management
9. Service
10. Managers and workers
1. Product and service design
Should reflect joint efforts of many areas of the
firm to achieve a match between (financial
resources/operations capabilities /supply chain
capabilities/ consumer wants& needs)
Special characteristics or features of a product
or service can be a key factor in consumer
buying decisions.
2. Cost of an organization's output
is a key variable that affects pricing decisions
&profits.
Cost-reduction efforts are generally ongoing
in business organizations.
Productivity is an important determinant of
cost.
3. Location
can be important in terms of cost
& convenience for customers.
Location
NEAR MARKETS
NEAR INPUTS
•Lower transportation
Lower Input costs costs
•Quicker delivery times
4. Quality
refers to materials ,workmanship, design &
service.
CONSUMERS
Judge quality in terms of how well they
think a product or service will satisfy its
intended purpose.
Customers are generally willing to pay more
for a product or service has a higher quality
than that of a competitor
5. Quick Response
Can be a competitive advantage
Quickly handling
customer complaints
Quickly bringing Quickly deliver existing
new or improved Products & services
products or services To a customer after
to the market they are ordered
6. Flexibility
is the ability to respond to changes.
Changes might relate to
Alternatives in design features of a product.
The volume demanded by customers.
The mix of products or services offered by an org.
7. Inventory management
can be a competitive advantage by
effectively matching supplies of goods
with demand.
8. Supply Chain Management
involves coordinating internal & external
operations ( buyers & suppliers) to achieve
Timely & cost-effective
Delivery of goods through out the system
9. Service
might involve
After-sale activities Extra attention while
work is in progress
Value-added such as •Courtesy
•Delivery •Keeping the customer
•Warranty work informed
•Technical support •Attention to details
10. Managers & workers
the people are at the heart & soul of
an org. & if they are competent &
motivated ,they can provide a
distinct competitive edge by their
skills & the ideas they create.
10. Managers & workers
A person answering
A person handled
is rude
Promptly & cheerfully
& not helpful
That can produce
That can produce a positive image
a & a competitive
negative image advantage
1. Putting too much emphasis on short term financial
performance at the expense of research &
development.
2. Failing to take advantage of strength &
opportunities &/or failing to recognize competitive
threats.
3. Neglecting operations strategy.
4. Placing too much emphasis on product & service
design & not enough on process & improvement.
5. Neglecting investments in human resources.
6. Failing to establish good internal communications &
cooperation among difference functional areas.
7. Failing to consider customer needs & wants.
1. What do the customers want?
2. What is the best way to satisfy those needs?
So, operations must work with marketing to
obtain information on the relative importance of
the various items to each major customer or
target market.
A measure of the effective use of
resources, usually expressed as the ratio
of output (goods & services) to
input(labor/materials/energy/…etc)
Outputs
Productivity =
Inputs
Partial Output Output Output Output
measures Labor Machine Capital Energy
Multifactor Output Output
measures Labor + Machine Labor + Capital + Energy
Total Goods or Services Produced
measure All inputs used to produce them
The choice of productivity measures depends
primarily on the purpose of the measurement
Ex. If the purpose is to track improvements in labor
productivity ,then labor becomes the obvious input
measures.
Partial measures are often of greatest use in operations
management.
Examples of
Partial Productivity Measures
Labor Units of output per labor hour
Units of output per shift
Productivity Value-added per labor hour
Machine Units of output per machine hour
Productivity
Capital Units of output per dollar input
Dollar value of output per dollar input
Productivity
Energy Units of output per kilowatt-hour
Dollar value of output per kilowatt-hour
Productivity
1. For an individual departement or org.
Productivity measures can be used to track
performance over time.
This allows managers to judge performance
& to decide where improvements are
needed.
Business leaders are concerned with
productivity as it relates to competitiveness
2. For an entire industry or the productivity
of a country as a whole
Government leaders are concerned with
national productivity because of the close
relationship between productivity & a
nation's standard of living.
Develop productivity measures
Determine critical (bottleneck) operations
Develop methods for productivity improvements
Establish reasonable goals
Get management support
Measure and publicize improvements
