Operations Strategy Flashcards
Strategy
Strategy: the determination of the basic long-term goals and objectives of an enterprise, and the adoption of course of action and the allocation of resources necessary for carrying out these goals
Different Levels of Strategy
Corporate
What businesses should we be in
What businesses to aquire
Allocating resources between businesses
Business
How to compete?
Mission
Money
Function
How to align the business functions to meet the business strategy
Strategic objectives
Skills required
Tech required
Operations Strategy
Operations strategy reconciles the requirements of the market (performance objectives) with the capabilities of operations resources
Competitive Advantage
An edge over rivals and the ability to generate greater value
Cheaper, better, faster
Performance Objectives
Quality:
Conformance: meets specifications, dimensionally correct, right material, meets regulations
Fitness for purpose: features, purpose, reliability, durability
Speed
Dependability
Cost
Flexibility
Mix: frequent new products
Product: wide range of products
Volume: changing the volume of deliveries
Delivery: changing the timing of deliveries
Prioritising Performance Objectives
Order winners: performance objectives which directly and significantly contribute to winning businesses
Order Qualifiers: Must be at some “threshold” level to be considered by the customer
Trade-offs
decisions that arise because of the inability to excel simultaneously across all competitive dimensions
Sandcone model: cost reduction relies on a cumulative foundation of improvement in the other performance objectives
Capabilities and Resources
Capabilities:
make, buy, sell,, design, manage
Performance objectives:
cost. quality, dependability, speed, flexibility
Competitive Priorities:
low price, high quality, reliable deliveries, fast delivery
Competitive advantages:
cost and differentiation
Coordination
Mutual adjustment: Coordination of work is made possible by a process of informal communication between people conducting interdependent work
Direct supervision: Coordination is achieved by one individual taking responsibility for the work of others.
Standardisation of work processes: Coordination is made possible by specifying the work content in rules or routines to be followed. Coordination occurs before the activity is undertaken
Standardization of output: Coordination is obtained by the communication and clarification of expected results. The individual actions required to obtain a goal are not prescribed.
Standardization of skills and knowledge: Coordination is reached through specified and standardised training and education. People are trained to know what to expect of each other and coordinate in almost automatic fashion.
Standardisation of norms: Norms are standardized, socialization is used to establish common values and beliefs in order for people work toward common expectations.
Operational Strategy Decision Areas
Decision areas and performance objectives overlap
- capacity, supply network, process tech, development and organisation
- Performance objectives: quality, speed, dependability, flexibility, cost
How to Develop a Business Strategy Linked Operations Strategy?
Look at the firm
Pareto
star, cash cow, dog
PESTLE
Porters value chain
SWOT
Look at the industry:
5 forces
PESTLE
Market-driven vs resource-led
- market segmentation, objectives, operation strategy decision areas
Potential positioning, operation performance, strategy, understanding resources abd processes
Identify Performance Objectives
Understand resources and processes:
- tangible and intangible resources, operation capabilities, operation processes –> operation strategy decision areas
- Capacity, supply networks, development and organisation
Understanding markets
- performance objectives: customer needs, market positioning, competitor actions
- Quality, speed, dependability, flexibility, cost
Fit Between Business Plan and Operations
Key partners, activities, resources, value provided, customer relationship, channel, customers, costs, revenue and benefits
