Operations Strategy

1
Operations Strategy
Chapter 2
2
Competitive Priorities

• Capabilities
• current
• needed
• planned

Figure 2.1
3
Competitive Priorities
Cost 1. Low-cost operations Quality 2. Top
quality 3. Consistent quality Time 4. Delivery
speed 5. On-time delivery 6. Development
speed Flexibility 7. Customization 8. Variety
9. Volume flexibility
Figure 2.1
4
New Service or Product Development Process
Figure 2.2
5
Corporate Strategy and Key Operations Management
Decisions
Corporate strategy
Figure 2.3
6
Mass Customization

• A strategy whereby a firms flexible processes
  generate a wide variety of services or products
  at reasonably low costs.
• Postponement in services
• Service package is designed so that it consists
  of independent modules that can be assembled into
  different forms easily and inexpensively.
• Postponement in manufacturing
• Manufacturing processes can avoid building up
  inventories of finished goods in anticipation of
  future orders because they will wait for a
  specific customer order and then deliver directly
  to the customer
• May require redesign of products or processes
• Internet Implications
• Web pages can be designed to allow customers to
  configure their own products or services, quickly
  an easily.
• Flexibility and short response time are prized
  qualities for mass customization.

7

• Operations Strategy as a number of Decisions
• Operations strategy translates service or
  product plans and competitive priorities for each
  market segment into decisions affecting the
  processes that support those market segments.
• A service or manufacturing strategy must be
  selected for each process.
• These decisions must be continually reevaluated
  according to the needs of the market.
• The pattern of decisions is also a function of
  the firms core competencies

8

• Operations Strategy Across the Organization
• A firm is a system of interconnected parts, or
  functional areas.
• Management information systems help to link the
  various functional areas.
• Full collaboration among functional areas on
  decisions is a vital requirement for success.