Page 18 - DMGT501_OPERATIONS_MANAGEMENT

Operations Management

Notes

Notes Xerox has 'redefined' its product as facilitating communications rather than just
selling copy machines. In its strategy to be the 'Document Company', Xerox now offers
products that can copy handwritten documents, convert them to electronic form, and e-
mail them. Such products have allowed Xerox to increase the services related to document
management in its output bundle. This type of transition creates significant challenges for
Operations Management.

Task Take an example of an airline and show a comparison between its services
and manufacturing.

1.7 Competitiveness Strategy and Productivity

"Productivity" relates output to the quantity of resources or inputs used to produce them. It is
basically concerned with how efficiently a certain output of goods and services is produced, and
the value created by the production process. At the corporate level, productivity makes it possible
to produce superior quality and high-value goods and services at the lowest possible cost. If a
product could be made at the lowest possible cost with a high quality, and could be sold
competitively in the marketplace at a good price, then its productivity would be considered
very good. Productivity is expressed with this simple equation:

Productivity = Output/ Input
The concept of productivity, however, has evolved over the years to represent more than an
efficiency ratio. From cost and quality issues, its scope has expanded to embrace social concerns,
such as job creation and security, poverty alleviation, improvement in the quality of life, resource
conservation and environmental protection. The role of Green Productivity (GP) has a special
significance. "Green Productivity" signifies a new paradigm of socio-economic development
aimed at the pursuit of economic and productivity growth while protecting the environment.

Notes The Asian Productivity Organization (APO), Tokyo, Japan launched the GP program
in Asia & the Pacific in 1994, in response to Rio Earth Summit of 1992 as a strategy to create
a paradigm shift among the stakeholders for productivity enhancement in harmony with
environment protection for overall socio-economic development. This comprehensive
approach to productivity means that when a corporation implements a productivity
improvement program, its effects will extend beyond the company.

There are several concepts of productivity. In addition to the single factor measure of productivity
there are also multifactor productivity measures (relating a measure of output to a bundle of
inputs). Another distinction, of particular relevance at the industry or firm level, is between
productivity measures that relate some measure of gross output to one or several inputs and
those which use a value-added concept to capture measurements of output.

12 LOVELY PROFESSIONAL UNIVERSITY