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Production Operations

Management

Operations Strategy
U. Akinc
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Linking
Corporate
strategy
with
operations
strategy
Bus 241

Operations Strategy

Corporate Strategy

Product Plans

Competitive Priorities

Positioning/Operations Strategy

Bus 241

Corporate Strategy
Mission
Relating the Organizations Efforts to its Long
Term Future.

What Business are we in?


Who are Our Customers?
What are our Concepts and Beliefs?
How Do We Measure Performance

Growth?
Profits?
Market Share?
Innovation?

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Corporate Strategy
Environment:
Scanning the Environment for Opportunities
and Threats:

Competition

Market

Economic Trends

Social and Political Changes


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Corporate Strategy
Distinct Competencies:
Organizations Unique Strengths-- those that are
difficult for others to duplicate
Examples:

Competent Workforce
Advantageous Location
Innovative Capability
Technology
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Operations Strategy

Corporate Strategy

Product Plans

Competitive Priorities

Positioning/ Operations Strategy

Bus 241

Product Plans
Strategic Product Line Related Choices to Leverage
Companys Distinct Competencies
The market(s) served
Low End
High End
Both

Scope of Product Line


Wide
Narrow
Availability
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Product Life Cycles

Pressures to Introduce New Products:

Competition
Expired Patents
Technological Innovation

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Product Plans

A. Enter Early and Exit Late


From Introduction to Decline

B. Enter Early and Exit Early


From Introduction to Maturity

C. Enter Late and Exit Late


From Maturity to Decline
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Operations Strategy

Corporate Strategy

Product Plans

Competitive Priorities

Positioning/Operations Strategy

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Competitive Priorities
Companies Compete on the Basis of:
Quality
Performance
Conformance
Service

Price
Time

Introduction
Delivery

Flexibility
Volume
Product Mix

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Operations Strategy

Corporate Strategy

Product Plans

Competitive Priorities

Positioning/Operations Strategy

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A. Structure:
Design & Creation of the Transformation
System

Vertical Integration
Technology
Scale of Process/Capacity
Location/Layout
Positioning Strategy

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Positioning Trade off

Customizatio
n

High
Process Focus
Project
Job Shop
Intermediate
Focus
Batch
Product Focus
Line
Continuous

None
Low
Low Volume
One-of-a-kind

Moderate
Volumes

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High
Volume

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Positioning the Process


Product

Focused (Organizing the


Productive resources around the Product)

High Volume
Limited variety Products/Services
Line Flows
Special Purpose Equipment
Low Labor Skills
Capital intensive/ High Automation
Efficient
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Positioning Strategy(cont.)

Process Focused (Organizing the Productive


Resources According to Capability)
Low Volume
Wide Variety /High Customization
Not as Efficient/ Highly Flexible
General Purpose Equipment
High Skilled and Highly Trained Workforce
Jumbled and Complex Work Flow
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B. Infra-Structure
(The use of the Transformation System)
1. Work-Force policies
2. Quality Policy
3. Operating System

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