Modul 1 - Production Strategy.ppt

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  • MANAJEMEN PRODUKSI / OPERASI

  • *MANAJEMEN PRODUKSI DAN OPERASI (MPO)Tujuan : Produksi : produktifitas MPO : Pencapaian Produktivitas secara efisien.

    Pembatasan Arti - Produksi: Penciptaan barang dan jasa- Operasi: Pengubahan input menjadi output yang lebih bernilai dari bentuk aslinya.- Manajemen: Tindakan pencapaian tujuan melalui pengkoordinasian kegiatan orang/bagian lain. - MPO: Kegiatan penciptaan barang dan jasa melalui pengubahan faktor produksi dengan memanfaatkan fungsi-fungsi manajemen agar produktifitas dapat dicapai secara efisien dan efektif.

  • *Kenapa MPO diperlukan?Salah satu bagian fungsi operasional manajemenUntuk menghasilkan barang dan jasa secara produktifProduksi/Operasi berperan 60 90% dari biaya, efisien dan efektifitas perlu diperhatikanPenting untuk rancang bangun prosesBagaimana MPO dilaksanakan?Perlu ada strategi, kebijaksanaan taktikSpesialisasi fungsi dan koordinasi dengan bagian yang terkait

  • *Permasalahan dalam Produksi/OperasiPemilihan strategi produksi dan tipe barangPerencanaan kapasitasPerencanaan kualitas, proses dan teknologiPerencanaan letak, layout dan kapasitas pabrikPerencanaan transportasi dan penanganan barangPembuatan jadwal produksiMRPSistem informasi

  • *Bidang Kerja Spesialis Produksi/OperasiPengembangan Metode TeknologiPemanfaatan fasilitas dan ruangPenyusunan strategi perusahaanOptimasi respon timePengembangan team-workPelayanan konsumenPeningkatan kualitasPenurunan biaya dan stokPeningkatan produktivitas

  • *The Operations FunctionOperations is a transformation process

    Operations is a basic function

    Operations is the technical core

  • *Operations as a Transformation ProcessOUTPUT

    MaterialMachinesLaborManagementCapital Goods or Services INPUTTransformationprocessFeedback

  • *Transformation ProcessesPhysical (manufacturing)Locational (transport/storage)Exchange (retail)Physiological(healthcare)Psychological (entertainment)Informational (communications)

  • *MODEL SKEMATIS SISTEM PRODUKSI/OPERASIPermintaan

    PrakiraanM-BahanA-ManusiaS-Sarana &U PrasaranaK-ModalA-EnergiN-Informasi

    Kegiatan Produksi atauPerubahan bentuk masukan :Rancang Bangun, Proses,Dan PengawasanKeluaranBarang

    Jasa

    LimbahBuangan

    LINGKUNGAN ALAMAILINGKUNGAN ALAMAI UMPAN BALIKFASILITAS LAYAOUT

  • *Tipe Lembaga Input OuputToko Bangunan toko, dagangan, Penjualan tenaga kerja, Listrik, ke pelanggan Pelangan, dll Rumah Sakit Bangunan, dokter, Pasien yang perawat, dll keluarPemborong Bahan bangunan, tenaga Rumah, jalan, dll kerja, peralatan, dll Pabrik Bahan baku, bahan pembantu Barang atau jasa tenaga kerja, mesin, alat, dll University Ruang kuliah, dosen, lab. Lulusan kurikulum, dll

    Contoh input dan output lembaga

  • *Operations FunctionOperationsMarketingFinance and accountingHuman resourcesOutside suppliers

  • *Operations as the Technical CoreOperationsFinanceCapital Markets, Stockholders Marketing Customers Workers Suppliers Purchasing Personnel

  • *

    MASALAHAREA KEPUTUSANSIFATLINGKUP RANCANGAN SISTEM PRODUKSI:

    PRODUK DAN JASA YANG DITAWARKANSEHARUSNYA PRODUK DAN JASA DIRANCANG

    PROSES/OPERASI YANG DIBUTUHKAN, URUTANNYA, DAN MESIN/PERALATAN/FASILITAS PENDUKUNGPRODUK DAN JASA DAPAT DIPERBAIKI

    LOKASI YANG BAIK BAGI FASILITAS DAN ATAS DASAR KRITERIA APA LOKASI DIPILIH.

    MENGATUR LETAK FASILITAS (BANGUNAN, RUANG, MESIN, FASILITAS LAIN) DIKAITKAN DENGAN ASPEK BIAYA DAN PRODUKTIVITAS.

    MENYEDIAKAN LINGKUNGAN KERJA CARA TERBAIK MEMOTIVASI KARYAWANPRODUKTIVITAS DAPAT DITINGKTKANMENGUKUR DAN MEMPERBAIKI METODE KERJA

    PEMILIHAN DAN PERANCANGAN PRODUK DAN JASA.

    PEMILIHAN DAN DAN RANCANGAN PROSES

    LOKASI

    TATALETAK

    RANCANGAN SISTEM KERJA

    STRATEGIS

    STRATEGIS

    STRATEGIS

    STRATEGIS

    STRATEGIS

  • *

    MASALAHAREA KEPUTUSANSIFATLINGKUP PENGOPERASIAN DAN PENGENDALIAN SISTEM PRODUKSI/OPERASI:

    KAPASITAS PRODUKSI YANG DIBUTUHKAN (JANGKA MENENGAH) DAN BAGAIMANA CARA TERBAIK AGAR KEBUTUHAN KAPASITAS DIPENUHI.

    BERAPA BANYAK YANG DIPRODUKSI / DIPESANKAPAN DILAKUKAN PEMESANANITEM APA YANG PERLU MEMPEROLEH PERHATIAN.

    MEMBELI ATAU MEMBUAT SENDIRI DAN BERAPA BANYAKSIAPA SUPLIER

    PENJADWALAN KERJA, SIAPA YANG MELAKSANAKAN.MESIN/PERALATAN APA YANG DIGUNAKAN

    KEGIATAN APA YANG PALING KRITIS, SUMBERDAYA APA YANG DIBUTUHKAN DAN KAPAN.

    HAMBATAN (BOTTLENECKS) DAPAT DIKURANGIKAPASITAS YANG EFEKTIF.

    MENETAPKAN KUALITAS PRODUK/JASA , STANDARDKUALITAS DAPAT DITINGKATKANKINERJA PROSES/OPERASI .

    RENCANA PRODUKSI AGREGAT

    MANAJEMEN PERSEDIAAN (INVENTORY) DAN MRP.

    PENGADAAN

    PENJADWALAN

    MANAJEMEN PROYEK

    ANTRIAN (QUEING)

    MANAJEMEN KUALITAS

    TAKTIS

    TAKTIS

    TAKTIS

    TAKTIS

    TAKTIS

    TAKTIS

    TAKTIS

  • *

    MARKETING OPTIONFINANCEOPTIONPRODUCTION OPTIONSAAT INIMENINGKATKAN PENDAPATAN PENJUALAN (50%)MENGURANGI BIAYA FINANCE (50%)MENGURANGI BIAYA PRODUKSI (20%)PENJUALAN

    BIAYA PRODUK

    GROSS MARGIN

    BIAYA FINANCE

    PAJAK (25%)

    KONTRIBUSI *)$ 100.000,-

    80.000,- 20.000,-

    6.000,-

    14.000,-

    3.500,-

    10.500,-$ 150.000,-

    120.000,-

    30.000,-

    6.000,-

    24.000,-

    6.000,-

    18.000,- (71 %)$ 100.000,-

    80.000,-

    20.000,-

    3.000,-

    17.000,-

    4.250,-

    12.750 (21 %) $ 100.000,-

    64.000,-

    36.000,-

    6.000,-

    30.000,-

    7.500,-

    22.500,- (114%)

  • *Material flow system: Continuous production system Intermittent production system Project system Pure Inventory system

  • *Klasifikasi Sistem ProduksiDerajad Standarisasi Output:Standardized: tingkat keseragaman produk tinggi.Customized : produk dirancang untuk kegunaan yang spesifik atau bersifat individual.Tipe Operasi / Produksi:Proyek: is a one at a time production of a product to costomer order, himpunan operasi untuk sasaran spesifik pada periode waktu tertentuBatch Production : memproses banyak atau beberapa produk/jobs yang berbeda pada saat yang sama dalam satu group (or Batch) sesuai dengan permintaan/ kebutuhan konsumen.Mass Production / Repetitive Production: memproduksi produk standard dalam jumlah/ volume besar untuk mass market.Continuous Processing, digunakan untuk untuk produk yang sangat standard (homogen) dengan volume/jumlah yang sangat besar.Bentuk Barang:BarangJasa

  • *

    CharacteristicBarangJasaOutputTangibleIntangibleCustomer contactLowHighLabor contentLowHighUniformity of ProductHighLowMeasurement of productivityEasyDifficult

  • *Product Process Matrix

    HighContinuous ProductionVOLUMEMass ProductionBatch ProductionLowProjectLowStandardizationHigh

  • *Service Process Matrix

    HighService FactoryLabor IntensityMass ProductionSeviced ShopLowProfessional ServiceLowCustomizationHigh

  • *Historical Events in Operations Management

    EraEvents/ConceptsDatesOriginatorIndustrialRevolutionSteam engine1769James WattDivision of labor1776Adam SmithInterchangeable parts1790Eli WhitneyScientific ManagementPrinciples of scientificmanagement1911Frederick W. TaylorTime and motion studies1911Frank and Lillian GilbrethActivity scheduling chart1912Henry GanttMoving assembly line1913Henry Ford

  • *Historical Events in Operations Management (cont.)

    EraEvents/ConceptsDatesOriginatorHuman RelationsHawthorne studies1930Elton MayoMotivation theories1940sAbraham Maslow1950sFrederick Herzberg1960sDouglas McGregorOperations ResearchLinear programming1947George DantzigDigital computer1951Remington RandSimulation, waitingline theory, decisiontheory, PERT/CPM1950sOperations research groupsMRP, EDI, EFT, CIM1960s, 1970sJoseph Orlicky, IBMand others

  • *Historical Events in Operations Management (cont.)

    EraEvents/ConceptsDatesOriginatorQualityRevolutionJIT (just-in-time)1970sTaiichi Ohno (Toyota)TQM (total qualitymanagement)1980sW. Edwards Deming, Joseph JuranStrategy andoperations1990sWickham Skinner, Robert HayesBusiness processreengineering1990sMichael Hammer,James Champy

  • *Historical Events in Operations Management (cont.)

    EraEvents/ConceptsDatesOriginatorGlobalizationWTO, European Union, and other trade agreements1990s2000sNumerous countriesand companiesInternet RevolutionInternet, WWW, ERP, supply chain management1990sARPANET, TimBerners-Lee SAP,i2 Technologies,ORACLE,PeopleSoftE-commerce2000sAmazon, Yahoo, eBay, and others

  • *

    Manajemen Produksi Operasi Modern (1980an sekarang)

    System Produksi Toyota- Just in time system- Total produktive maintenance- TQC & TQM

    Extended Group Technology- Pemanfaatan unit produksi untuk berbagai macam produk

    Fleksible manufacturing- Pabrikasi dengan tipe produk dan jumlahnya diatur fleksibel sesuai dengan kebutuhan

    Remote manufacturing/global enterprise

    Virtual Enterprise

  • *Competitiveness and ProductivityCompetitivenessdegree to which a nation can produce goods and services that meet the test of international marketsProductivityratio of output to inputOutputsales made, products produced, customers served, meals delivered, or calls answeredInputlabor hours, investment in equipment, material usage, or square footage

  • *Risks of GlobalizationCultural differencesSupply chain logisticsSafety, security, and stabilityQuality problemsCorporate image Loss of capabilities

  • *PRODUKTIVITAS

    Contoh kenaikan Produktivitas

    NegaraKenaikan Produktifitas (%/thn)

    Jepang5.7Korea Selatan5.3Jerman3.5Perancis3.2Kanada1.7USA1.7Indonesia?Sumber : Reksohadiprojo, 1995

    Pengukuran produktivitas sebagai cara terbaik untuk menilai kemampuan lembagaKenaikan produktivitas manfaatnya dapat didistribusikan kepada Stake Holder (Pemilik, tenaga kerja, konsumen,...)

  • *Produktivitas:Sebagai salah satu suatu Ukuran Daya Saing suatu Perusahaan

    Output & Input : Nilai Rupiah Unit (satuan)Produktivitas :Produktivitas TOTALProduktivitas Parsial ( tenaga kerja, modal, bahan, dsb)

    ?? Manajemen Produksi/Operasi berperan dalam meningkatkan Produktivitas:Output (Tetap): INPUT (Efisiensi)

    Input (Tetap): OUTPUT (Efektif)

    INPUT dan pada saat yang sama OUTPUT

  • *Pengukuran Produktivitas KlasikMasalah

    Kualitas berubahAdanya unsur eksternUkuran yang beragamOutput susah diukur saat ini

  • *Strategi, Kebijakan dan TaktikPencapaian Produktivitas

    Diklat -> Peningkatan keterampilan dan motivasi SDM perusahaan

    Perbaikan Sistem secara KeseluruhanMisi: membuat barang dan jasa yang berguna bagi masyarakat Tujuan : Produktivitas tinggi

    Swot AnalysisRancang Bangun processPengawasan Produksi

  • *Perusahaan pembuatan sari buah apel dengan alat yang ada dapat menghasilkan 240 krak untuk setiap box apel. Saat ini perusahaan membeli 100 box apel perhari dan setiap box memerlukan 3 jam kerja untuk memproses. Dia percaya dapat mempekerjakan pembeli apel yang profesional untuk dapat membeli apel yang lebih bagus kualitasnya dengan harga yang sama. Dalam hal ini setiap 1 box apel menghasilkan 260 krat. Diperlukan 8 jam kerja tambahan, perubahan produktivitasnya adalah ?

    Contoh persoalan produktivitas

  • *

  • *MISI DAN STRATEGI Manajemen Produksi Operasi MISI Manajemen Produksi Operasi (MPO)MPO perlu mempunyai misi untuk mengelaborasi dan mengarahkan visi dan strategi untuk mencapai tujuan tersebutContoh Misi PerusahaanPerusahaan Retail :Satisfy our customers immediate needs and wants by providing them with a wide variety of goods and services at multiple locations

  • *Perusahaan Penerbangan :Be the global market leader and air transfortation and related information services, through:Improving safety and securityProviding world class customer servicesProviding consistency superior financial returns for stake holderPerusahaan Palang Merah :Improve the quality of human lifeEnhance self reliance and concern for othersHelp people avoid, prepare for and cope with emergencies

  • *CONTOH MISI PADA BERBAGAI TINGKATANMisi Perusahaan :Mencapai bisnis di bidang pabrikasi yang tumbuh, terdiversifikasi global dan menguntungkan. Misi MPO :Menghasilkan produk sesuai misi perusahaan yang berorientasi pada produk yang berkualitas, murah dan globalMisi Bagian Produksi/OperasiManajemen Kualitas: Peningkatan kualitas secara menyeluruhDesain Produk: Menghasilkan desain produk yang up to date sesuai dengan keinginan konsumen dan standard

  • *Desain Proses: Desain proses dan peralatan yg kompatible dengan sifat produk dan biaya yang bersaingSeleksi Lokal: Memilih lokasi yang berharga terhadap perusahaan, pelanggan, suplier dan tenaga kerjaSDM : Menciptakan suasana kerja yang konduktif terhadap pekerja, karier, pengembangan profesiJadwal Supplier : Membina hubungan secara baik, saling menguntungkan dan saling percayaPenjadwalan: Penjadwalan yang efektif dan efisienInventori: Stok yang menimum tapi aman untuk konsumen dan operasi perusahaanPemeliharaan: Utilitas peralatan yang tinggi

  • *

    STRATEGY is a common vision that unites an organization, provides consistency in decisions, and keeps the organization moving in the right direction.

  • *Merupakan action plan dari organisasi untuk mencapai misiPencapaian misi melalui :Pembedaan ProdukBiaya/HargaKecepatan responFlexibilitas?

  • Please the customerCOMPETING ON QUALITYExamples: Malcolm Baldrige Award Winners

  • Respond to changing customer and operational needs

    COMPETING ON FLEXIBILITYContoh: - Mobil - Air minum dalam kemasan - Netbook

  • Fast moves, fast adaptions, tight linkages

    COMPETING ON SPEEDContoh: - McDonalds, - TIKI, FedEx, -

  • Eliminate all waste

    COMPETING ON COSTContoh: Airlines industries - Wing foods?: Mie sedap v.s. Indomie?

  • *Industrial ParadigmQualityCostVarietyResponsiveness1913196019802000MassLeanFlexibleReconfigurableProduction :Objective :Interchangeable PartsProduction ManagementComputerizationKnowledge Science

    Approach:

  • *Competition StrategyCostQualityDeliveryFlexibility/ResponsivenessInnovation1800 1960 1970 1980 1990 2000

  • *Competency-Based StrategiesFocus on developing core competencies, rather than achieving specific marketing or financial goals

  • *Keputusan OperasiStrategy KompetitifKeunggulanKualitasProdukProsesLokasiLayoutSDMJaringan supplierInventoryPenjadwalanPemeliharaan Fleksibilitas: Desain VolumeHarga MurahDelivery Kecepatan KetergantunganKualitas : KinerjaPelayanan Purna JualJaringan Produk yang luasPerbedaan (lebih bagus)

    Harga/Biaya (lebih murah)

    Respon (lebih cepat

  • *Strategy Formulation1. Define the primary task

    2. Assess core competencies

    3. Determine order winners & order qualifiers

    4. Position the firm

  • *Competency-Based StrategiesFocus on developing core competencies, rather than achieving specific marketing or financial goals

  • *Pause and Reflect

    What are your core competencies? How can they be used to obtain the job you want? What competencies do you need to develop in order to succeed in your chosen field?

  • *Activities that lead to Core CompetenciesCore competenciesShared problem solvingRapid Integrationof new technologies& methodologies Experimentation

  • *Activities that reinforce Core RigiditiesBiased experimentationCore rigidities

  • *Vision:Total customer satisfaction

    Strategic goal: Improve customer retention

    Customer complaint: It takes too long to fulfill order

    Functional goal: Reduce delivery timeExample: Agroin

  • *Strategic PlanningMission & VisionBusiness StrategyMarketing StrategyOperations StrategyFinancial StrategyVoice of the BusinessVoice of the Customer

  • *

    WhatWhoWhenMeasureResourceImprove work flowAndy9-1-07Average queue time per jobRp. 25 juta

  • *Operations Role in Corporate StrategyProvide support for overall strategy of a firm

    Consistent with firms goals & resources

    An order qualifier

    Serve as a firms distinctive competence

    An order winner

  • *Operations Strategy Products Processes andTechnologyCapacity Human ResourcesQualityFacilitiesSourcingServicesOperating Systems

  • *Products & ServicesMake-to-ordermake to customer specifications after order is receivedMake-to-stockmake in anticipation of demandAssemble-to-orderadd options according to customer specifications

  • *Processes & TechnologyProjectproduce a product or service one-at-a-time to customer orderBatch productionprocess many different jobs at the same time in batchesMass productionproduce large volumes of a standard product or service for a mass marketContinuous productionproduce a commodity product or service continuously in very high volume

  • *Product-Process MatrixVolumeLowLowHighHighProjectsBatchproductionMassproductionContinuousproductionStandardization

  • *CapacityLevel of capacity

    Size of capacity changes

    Handling excess demand

    Hiring/firing workers

    Need for new facilities

  • *FacilitiesBest size for facility

    Large or small facilities

    Facility focus

    Facility location

    Global facility

  • *Human ResourcesSkill levels requiredDegree of autonomyPoliciesProfit sharingIndividual or team workType of supervision Levels of managementTraining

  • *

    QualityTarget levelMeasurementEmployee involvementTrainingSystems needed to ensure qualityMaintaining quality awarenessEvaluating quality effortsDetermining customer perceptions

  • *SourcingDegree of vertical integration

    Supplier selection

    Supplier relationship

    Supplier quality

    Supplier cooperation

  • *Operating SystemsDaily execution of strategy

    Information technology support

    Effective planning & control systems

    Alignment of inventory levels, scheduling priorities, & reward systems

  • *Primary Topics in Operations Management

  • *Primary Topics in Operations Management (cont.)

  • *Issues & Trend in Productions/OperationsIntense competitionGlobal markets, global sourcing & global financingImportance of strategyProduct variety & mass customizationMore servicesEmphasis on qualityFlexibilitityAdvances in technologyWorker involvementEnvironment & ethical concern Government regulation customer requirments

    **Operations can be viewed from many different perspectives.*Operations can be viewed as a transformation process that converts inputs into outputs of greater value.*4The input-transformation-output process covers more than manufacturing processes. Operations can take many forms.*6Operations managers do more than efficiently convert inputs to outputs. They interact with marketing to receive estimates of customer demand and customer feedback on problems; with finance for capital investments, budgets, and stockholder requirements; with personnel to train, hire, and fire workers; and with purchasing to order needed material for production.*Visioning is big in corporate America. Everyone from IBM to the Little League team has mission statements, visions, philosophies, and core values.Mission statements are the constitution for an organization, the corporate directive. But they arent any good unless they can be converted into action. And thats what this chapter is all about -- converting strategy into results.Gather mission or vision statements from several companies with which you are familiar. Is their mission or vision evident in the way they do business?

    *In companies that compete on quality, quality is defined from the customers point of view, quality is linked with profitability, quality is viewed as a competitive weapon,quality is built into the strategic planning process, and quality receives organization-wide commitment

    *Flexibility is the ability to adjust to changes in product mix, product or service design, and production volume. Companies that compete on flexibility must be close to the customer and have the skills, tools and infrastructure to respond to customer needs quickly and efficiently.*Competing on speed, the hustle strategy, requires an organization characterized by fast moves, fast adaptations and tight linkages. Companies that compete on speed have fewer levels of management, perform work in cross-functional teams, embrace change and risk taking, and maintain close contact with both suppliers and customers.

    *Tom Peters, Thriving on Chaos, 1987*Companies that compete on cost relentlessly pursue the elimination of all waste. But they also realize that low cost cannot be sustained as a competitive advantage if increases in productivity are obtained solely by short-term cost reductions. A long-term portfolio is required that trades off current expenditures for future reductions in operating costs The portfolio includes investments in updated facilities & equipment, programs and systems to streamline operations, and training & development that enhances the skills and capabilities of employees.*Look back at the steps for formulating strategy. Youll notice that strategy is based more on developing and fully utilizing core competencies than achieving certain market or financial goals. We call this competency-based strategy. How do firms develop good competency-based strategies? They encourage change. Core competencies are not static. They are not something a firm either has or doesnt have. Competencies are dynamic -- they can be developed, nurtured, and enhanced. They can also become obsolete!*

    Define the primary task -- What are you in the business of doing?Assess core competencies -- What do you do better than anyone else?Determine order winners and order qualifiers -- What wins orders in the marketplace? What qualifies a product or service to be considered for purchase?Position the firm -- For what do you wish to be known? On what do you wish to compete?

    *Look back at the steps for formulating strategy. Youll notice that strategy is based more on developing and fully utilizing core competencies than achieving certain market or financial goals. We call this competency-based strategy. How do firms develop good competency-based strategies? They encourage change. Core competencies are not static. They are not something a firm either has or doesnt have. Competencies are dynamic -- they can be developed, nurtured, and enhanced. They can also become obsolete!*Perhaps this course can help develop some of the competencies you will need to compete in the job market.*Although Chaparral Steel is known for its low costs and sophisticated technology, its core competency is not technology, but the ability to transform technology rapidly into new products and processes. Chaparral is a good example of a company the is continually developing its core competencies. See page 35 for further discussion.*Core competencies that are not being updated or enhanced can easily become core rigidities. Core rigidities paralyze a company and prevent it from changing to meet emerging needs and environments. Activities that lead to core rigidities are the mirror images of those that encourage core competencies.

    Think of companies that at one time seemed unbeatable but are now struggling. What happened? *CopyPlus vision translated to a fucntional goal*Senior management, with input and participation from different levels of the organization, develops a corporate business strategy in concurrence with the firms mission and vision, customer requirements and business conditions. The strategic plan identifies what needs to be done to close the gap between the firms vision and its current position. It also provides direction for formulating strategies in the functional areas of marketing, operations, and finance. *Corporate strategy drives functional strategy. Functional strategies must be consistent with and supportive of corporate strategy. Operations can play a leading role in strategy as well as a supportive role. Can you think of companies or industries for which this is true?

    *It is important that operations strategy be internally consistent, as well as consistent with the firms overall strategy. Strategic decisions in operations involve products and services, processes and technology, capacity and facilities, human resources, quality, sourcing, and operating systems. All these decisions should fit like the pieces in a puzzle.*The kinds of products and services offered by a company drive operations strategy. Products and services can be classified as make-to-order, make-to-stock, or assemble-to-order. *The process chosen to create a product or service must be consistent with the product and service characteristics. Processes can be classified into projects, batch production, mass production and continuous production.*The product-process matrix matches product characteristics with process choice. The most important product characteristics in terms of process choice are degree of standardization and demand volume. The best process strategy is found on the diagonal of the matrix.*Strategic issues in terms of capacity*Capacity decisions lead to facility decisions.*Strategic issues in human resources*Quality permeates virtually every strategic decision.*Sourcing has become an important strategic decision referred to more generally as supply chain management. The term supply chain refers to the entire logistical chain, linking together the sourcing decisions of a firm, its suppliers, and its supplierssuppliers from the ultimate source to the final customer.*Operating systems execute strategic decisions on a day-to-day basis, so it is especially important that they be designed to support how the firm competes in the markerplace.