Operations & Supply Chain Strategy

Linking O&SC and Business Strategy New Approach

New Product Marketing Development and Sales Operations Service Business Strategy
O&SC Strategy Marketing Strategy

New Product Strategy

Distribution

O&SC strategy
A total pattern of decisions that shape the longlong-term capabilities of operations/supply chain through on-going reconciliation of onmarket requirements and operations resources so as to achieve a sustainable fit between the two functions towards optimization of a companys overall strategy whilst managing the risks of misalignment. misalignment.

Examples of Global O&SC Strategy

Benetton moves inventory to stores around the world faster than its competition by building flexibility into design, production, and distribution Sony purchases components from suppliers in Thailand, Malaysia, and around the world Volvo considered a Swedish company but it is controlled by an American company, Ford. The current Volvo S40 is built in Belgium and shares its platform with the Mazda 3 built in Japan and the Ford Focus built in Europe

O&SC Strategys Four perspectives

O&SC STRATEGY

The strategic reconciliation of market requirements with operations resources

O&SC Strategy Decision Areas

Qualifiers are the givens of doing business. Delights become Order winners, and Order winners become Qualifiers.

What operations strategies are Qualifiers, Order Winners and Delights ? and in the future ? What is the operation doing today to develop the capabilities which will provide the Delights of the future ? Today
Delights

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Qualifying, Order-Winning, Delighting Performance Objectives

Qualifying, Order-Winning, Delighting Performance Objectives

Order winners

Qualifiers

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Tomorrow ???

Cost-Base Strategy - Wal-Marts Strategy

Five Generic Competitive O&SC Competitive Performance Objectives

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Mass customization

Respond to customer needs

Modify existing products quickly

Introduce new products

Produce a wide variety of products

Competing on Product Flexibility

Mass Production (Fordism)

Ford pioneered the modern model of mass production. He developed the first moving assembly lines, put into operation at Ford's Model T plant at Highland Park, Michigan in 1914.

The assembly line increased labor productivity tenfold. Fordism involved standardizing a product and manufacturing it by mass means at a low price (Ford cars: from $780 in 1910 to $360 in 1914).

Mass Customization
Definition: Definition:

Mass Production vs. Mass Customization

Understand Tradeoffs
Example: Made-to-Order Pizza
1. COST 2. QUALITY 3. TIME 4. QUALITY & DESIGN FLEXIBILITY 5. VOLUME FLEXIBILITY

Manufacturing Strategies

Make-to-Stock Strategy

Assemble-to-Order Strategy: Configure-to-Order

Make-to-Order Strategy: Build-to-Order

Customer Benefit Package (CBP)

A customer benefit package (CBP) is a clearly defined set of tangible (goods-content) and intangible (service-content) features that the customer recognizes, pays for, uses, or experiences. It is very important that you understand the difference between customer wants and needs versus the CBP features selected by management to fulfill those needs. A CBP consists of a primary good or service, coupled with peripheral goods and/or services.

A CBP Example for Purchasing a Vehicle