Operations Strategy Overview

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Operations Strategy Overview

• Key Points
• WORKING DEFINITION OF OPERATIONS STRATEGY
• COMPETITIVE PRIORITIES OBJECTIVES IN CH. 2
• STRATEGIC DECISION AREAS POLICIES IN CH. 2

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3 Keys For Understanding Operations Strategy
TOWARD A WORKING DEFINITION OF OPERATIONS
STRATEGY

• Primary function of operations strategy is to
  guide business in forming a set of operations
  capabilities that enables the firm to pursue its
  chosen competitive strategy over the long-term
• Pattern of Decisions
• Consistency of Decisions ? Effective strategy

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Capabilities-Based Competition

• Strategic capabilities can result from
  investments in any function. Examples include
  outstanding marketing channels, prowess in
  logistics, or information processing
  capabilities, as well as through operations.
• Capabilities are likely to produce a SUSTAINABLE
  advantage since capabilities are hard for
  competitors to duplicate.
• Capabilities are built through a stream of
  investments over time. The capabilities
  themselves can be thought of as asset which can
  be deployed as needed.
• Advantage built on product features, advertising,
  etc. is not necessarily sustainable since
  competitors can quickly imitate.

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Competitive PrioritiesOBJECTIVES

• Cost
• Quality
• Delivery performance
• Flexibility
• Innovativeness

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Operations Strategy Decision Categories POLICIES

• STRUCTURAL DECISIONS
• "BRICKS AND MORTAR POLICIES
• Capacity -- amount, timing, type
• Facilities -- size, location, specialization
• Technology -- equipment, automation, linkages
• Vertical Integration -- direction, extent,
  balance

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INFRASTRUCTURAL - POLICIES
SYSTEMS

• Workforce policies and practices -- skill
  level, wage policies, training, and employment
  security
• New product development process
• Quality systems
• Production Planning/Materials Control -- sourcing
  policies, centralization, decision rules
• Organization