THE PROCESS OF OPERATIONS STRATEGY Flashcards
What is the process of Operations Strategy?
What does formulation of an operations strategy mean?
Formulating operations strategy
Formulation of operations strategy is the practical process of articulating the various objectives and decisions that make up the strategy. Unlike day-to-day operations management, formulating an operations strategy is likely to be only an occasional activity. Formulation often contains these activities:
- A process that formally aligns the total organisation strategic objectives (usually a business strategy) to resource-level objectives.
- Using operations performance objectives as a translation device for alignment between market positioning objectives and operations strategy.
- Judging alignment via assessment of the relative importance of operations performance objectives (in terms of customer preference) and achieved performance (usually compared against competitor performance levels).
What is the role of alignment?
Reconciling operational resources with market requirements so that there is an approximate degree of ‘fit’ or alignment between them. When alignment is achieved, the firms’ customers do not need, or expect, levels of operations performance that it is unable to supply. Nor does the firm have operations strengths that are either inappropriate for market needs or remain unexploited in the market.
What are some challenges to operations strategy formulation?
Challenges to operations strategy formulation
- Operations’ resource profile – Once an investment has been made in either tangible or intangible assets, this inevitably influences subsequent decision making.
- Investment bias – Operations will tend to invest further in those resource/requirement intersections that have proved successful. Given a finite resource base to draw upon, other aspects of the operation can easily suffer comparative neglect.
- History – Organizations become constrained by their own history. Once systems and procedures and ‘ways of working’ are established, it becomes difficult and expensive to change them. So, for example, even though IBM invented both floppy disk and hard drive technology, the firm saw itself as ‘a supplier of integrated systems’ and therefore it did not sell these components – effectively leaving other firms to make a fortune from their invention.
- Organizational structures/political forces – Often overlooked in rational discussions of operations management, political forces have an enormous influence. In all operations there are individual managers and influential groups who compete for resources with their different priorities, opinions and values.
What analysis is needed for strategy formulation?
Analysis of:
- Market requirements
- Operational resource capabilities (E.g. SWOT)
How do we know when the strategy formulation process is complete?
To asses whether the formulation process is complete, we can use the operations strategy matrix as a checklist to:
- Exploring what it means for an operations strategy to be comprehensive
- Ensuring there is internal coherence between the different decision areas
- Ensuring that decisions taken as part of the operations strategy process correspond to the appropriate priority for each performance objective
- Highlighting which resource/requirement intersections are the most critical with respect to the broader financial and competitive priorities of the organisation
Four C’s are evaluated:
- Comphehensiveness
- Coherence: when the choices made in each decision area do not pull the operation in different directions.
- Correspondence: the strategies pursued in each decision area should reflect the true priority of each performance objective.
- Criticality
What is operations strategy implementation?
Operations strategy implementation is the way that strategies are operationalized or executed. It involves the processes that attempt to ensure that strategies are achieved.
One way to do this is through a “line of fit”: Using this model gives us a starting point for understanding the purpose of the operation’s degree of change involved in the strategy implementation.
Who is responsible for strategy implementation? Four types of roles
How is progress towards strategic objectives tracked?
Describe tight and loose alignment and their implications
What are the consequences of market and operations becoming out of balance and how can risk be mitigated?
- Prevention strategies – are where an operation seeks to completely prevent (or reduce the frequency of) an event occurring.
- Mitigating strategies – are where an operation seeks to isolate an event from any possible negative consequences.
- Recovery strategies – are where an operation analyses and accepts the consequences from an event but undertakes to minimize or alleviate or compensate for them.
Explain the differences in single vs double loop learning
Single loop
- Problem is detect, corrected or solved.
- Some learning about the process
- No question values or objectives
Double loop learning
- Challenge existing operating assumptions
- Learning that produces a change in people’s assumptions and theories about cause and- effect relationships
- Continuous reflection upon internal and external objectives and context
Explain the The power-interest grid and how to manage stakeholders in them
- Manage closely – Interested groups must be fully engaged, with the greatest efforts made to satisfy them.
- Keep satisfied – Less interested groups require enough effort to keep them satisfied, but not so much that they become bored or irritated with the message.
- Keep informed – Interested groups need to be kept adequately informed, with checks to ensure that no major issues are arising. These groups may be very helpful with the detail of the project.
- Monitor – But less interested groups need monitoring, but without excessive communication.
What is the innovator’s dilemma?
The dilemma being that, especially when faced by radical shifts in the technological or operating model of a product or service, meeting long established customer needs can become an obstacle, rather than an enabler, of change. Disruptive technologies are those that, in the short term, cannot match the performance that customers expect from products and services. Example: electric car.
