session ii op strategy.ppt

8/14/2019 Session II Op Strategy.ppt

1/14

What is Operations Strategy?

Link with Corporate and BusinessStrategy?

Operations Strategy


2/14

Mfg. Strategy is to cope with:

Corporate strategy is derived from

vision/mission

Business Strategy (C S) translates

corporate strategy to determine product -

marketing strategy

Mfg.Strategy is expected to cope with the

outcome and is often set with little

reference to existing manufacturing

structure


3/14

But Mfg. is confronted with:

Trade offs

It cannot perform well on every yardstick

It can perform well on a limited task It has to therefore develop capabilities to

support desired CA of business unit.

Mfg. needs a proactive strategy to interactwith Corporate Strategy/Business strategy

to develop CA.


4/14

Strategic role of Mfg.Strategy

Competitive Strategy can be effective if it

offers sustainable CA over existing and

potential competitors.

Porter talks of three strategies for CA:

- Low cost leadership

- Product differentiation- -Segmentation or Focused approach

All functional strategies have to work to

support Business strategy


5/14

Proactive strategy

Competitive Strategy Competitive Advantages

Manufacturing Strategy Manufacturing Advantages


6/14

Mfg. Strategy is predominantly

strategic Alignment with market, understanding

winners,

Alignment with Competitive strategy

Plan to build up resources accordingly.

It is outside-in approach as also inside-out

Mfg.Strategy is more a driver of businessand less of a functional strategy.


7/14

Slack refers:

Operations is the activity of managing

resources and processes to produce and

deliver goods and services

It is concerned with activity of managing

total transformation process, that is the

whole business


8/14

Formal definition(Slack)

Operations strategy is the total pattern of

decisions which shape the long term

capabilities of any type of operation and

their contributionto overall strategy,

through the reconciliation of market

requirementswith operations resources


9/14

Operations as transformational

activity1. Flow between operations: Supply network is

an arrangement of operations ( supply

network: capability of each operation in the net

work)2. Flow between processes: an operation is an

arrangement of processes

( capability of each process in the operation)3. Flow between resources: a process is an

arrangement of resources( capabilities of each

resourcepeople and facilities)


10/14

Lowsons Generic factors of the

Operations Strategy

Medium and Long term decisions, for

Large, Medium and Small industries

Core competencies, capabilities, andprocesses

Resources(sourcing, outsourcing, human )

Technologies Certain key tactical activities vital to

support strategy or positioning


11/14

Operations Management

encompasses

Production of tangible goods

Management of non-core production

related processes Production of services

Servitization of tangible products

Blurring boundary between tangibleproducts and services

{Recent trend: Business Process

Management}


12/14

Operations Strategy: The Role

How to supply particular products and

services and the needs or requirements of:

capabilities or competencies

resources, work flows, human resource

levels, facilities, processes, technologies,

capacities, levels of flexibility,quality levels

Types of suppliers, supplier relationships,

sourcing and outsourcing

Decisions on operating systems,resources


13/14

Operations Strategy Decisions

Locations,

Technology

Procurement and supplier relationship

Selection of plant and machinery

Capacity

Supply network

Development and organization

Performance Objectives


14/14

Operations and Operational

Operational is day to day activities, that is

short term

Operations has long term impact; it is

strategic as it has to develop CA.

It carries elements of decisions on

sustainability

session ii op strategy.ppt

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