Professional Documents
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Chapter 3
Operations strategy
Photodisc. Cartesia
3.1
3.2
Design
Operations
management
Operations
strategy
Improvement
Planning and
control
3.2
3.3
3.3
3.4
3.5
Operations strategic
decisions
Industrial parks,
with
low cost but
close locations
and co-located
suppliers
3.5
Flextronics
Market
requirements
Low costs
Responsiveness
Flexibility
3.6
Operations strategic
decisions
3.6
Ryanair
Market
requirements
Stripped down
Low prices
service
One technology
Cheap airport
locations
Fast turnround
Reliability
Basic service
3.7
What is strategy?
Setting broad objectives that direct an enterprise
towards its overall goal.
Planning the path (in general rather than specific
terms) that will achieve these goals.
Stressing long-term rather than short-term
objectives.
Dealing with the total picture rather than stressing
individual activities.
Being detached from, and above, the confusion and
distractions of day-to-day
Slack, Chambersactivities.
and Johnston, Operations Management, 6 Edition,
th
3.7
3.8
Strategic decisions
3.8
3.9
3.9
3.10
Operations management
112 months
3.10
Long-term
for example,
capacity decisions
Demand
The time
scale is
longer
Demand
Short-term
for example,
capacity decisions
Operations strategy
110 years
3.11
Operations management
Micro-level
of the process
Operations strategy
Macro-level
of the total operation
The level of
analysis is
higher
3.11
3.12
Operations management
Detailed
For example:
The level of
aggregation
is higher
3.12
Operations strategy
Aggregated
For example:
What is our overall
business advice
capability compared with
other capabilities?
3.13
Operations management
Concrete
The level of
abstraction
is higher
3.13
For example:
How do we improve out
purchasing procedures?
Operations strategy
Philosophical
For example:
Should we develop
strategic alliances with
suppliers?
3.14
3.14
Operations as
supporter of
strategy
Strategy
Strategy
Operations
Operations
Operations
implements strategy
Operations
supports strategy
Operations as
driver of strategy
Operations
Strategy
Operations
drives strategy
3.15
Operations contribution
be Dependable
Operationalize strategy
explain Practicalities
3.15
Supporting
be Appropriate
Understand strategy
Contribute to decisions
Driving
be Innovative
provide Foundation of strategy
Develop long-term Capabilities
3.16
Redefining
industry
expectations
STAGE 4
Give an
operations
advantage
Clearly the
best in the
industry
STAGE 3
Link strategy
with
operations
STAGE 2
Adopt best
practice
As good as
competitors
Holding the
organization
back
STAGE 1
Correct the
worst
problems
Internally
neutral
After Hayes and
Wheelwright
3.16
Driving
strategy
Supporting
strategy
Implementing
strategy
Externally
neutral
Internally
supportive
Externally
supportive
3.17
Operations
strategy
Market
requirement
perspective
What the market
position requires
operations to do
What day-to-day
experience
suggests operations
should do
Bottom-up
perspective
3.17
3.18
Business strategy
Operations strategy
Emergent sense of what the
strategy should be
Operational experience
3.18
3.19
3.19
Influences on
decision-making
Corporate
strategy
Economic environment
Social environment
Political environment
Company values and ethics
Business
strategy
Customer/market dynamics
Competitor activity
Core technology dynamics
Financial constraints
Functional
strategy
3.20
Time
Introduction
Growth
Maturity
Decline
Slow growth in
sales
Rapid growth in
sales volume
Market needs
largely met
Customers
Innovators
Early adopters
Bulk of market
Laggards
Competitors
Few/none
Increasing
numbers
Stable number
Declining
numbers
Customization
or frequent
design
changes
Increasingly
standardized
Emerging
dominant types
Possible move
to commodity
standardization
Volume
Variety of
product/
service
design
3.20
3.21
Time
Introduction
Likely order
winners
Likely
qualifiers
Dominant
performance
objectives
3.21
Product/
service
characteristics
Growth
Availability
quality
Maturity
Decline
Low price
dependable
supply
Low price
Quality
range
Price
range
Quality
range
Dependable
supply
Flexibility
quality
Speed
dependability
quality
Cost
dependability
Cost
3.22
3.22
Low price
Performance objectives
Then, the operations will need to
excel at these
Cost
High quality
Quality
Fast delivery
Speed
Reliable delivery
Dependability
Flexibility (products/services)
Flexibility (mix)
3.23
+ve
Competitive
benefit
Neutral
ve
Performance
3.23
3.24
+ve
Competitive
benefit
Neutral
ve
Performance
3.24
3.25
+ve
Competitive
benefit
Neutral
ve
Performance
3.25
3.26
Intended
strategy
Unrealized
strategy
3.26
Deliberative
strategy
Realized
strategy
Emergent
strategy
3.27
Market
requirements
Operations
resources
What you
HAVE
in terms of
operations
capabilities
What you
DO
to maintain
your
capabilities
and satisfy
markets
What you
WANT
from your
operations to
help you
compete
What you
NEED
to compete
in the
market
Strategic
reconciliation
3.27
3.28
3.28
3.29
When to start?
Where to start?
How fast to proceed?
How to co-ordinate the implementation
programme?
3.29
3.30
3.30