http://www.newagepublishers.com/samplechapter/001233.

pdf
 Operations Strategy

 A plan specifying how an organization will allocate
resources in order to support infrastructure and
production.

 An operations strategy is typically driven by the

overall business/ corporate strategy of the
organization, and is designed to maximize the
effectiveness of production and support elements
while minimizing costs.
 Competitive Capabilities

 Competitive capabilities are the cost, quality, time, and
flexibility dimensions that a process or supply chain
actually possesses and is able to deliver.

 When the capability falls short of the priority attached to

it, management must find ways to close the gap or else
revise the priority.
 Core
Competencies

 Core competencies are the unique resources and
strengths that an organization’s management
considers when formulating strategy. They reflect
the collective learning of the organization, especially
in how to coordinate processes and integrate
technologies
 Workforce
 Facilities
 Market and Financial Know-How
 Systems and Technology
Operations Strategy as a
Competitive Weapon

 Want to craft the strategy that will achieve the best competitive
advantage
 Competitive advantage is the creation of a unique advantage
over competitors

 Operational strategy as continuing commitment

 Commit to ongoing improvement
 Operational Strategy as quantum leap
 Operational strategy as balancing act
Operations Strategy as a
Competitive
 Weapon
 Operations Strategy as a
Competitive
 Weapon
 Competitive Weapons used by FedEx
 Linkage Between
Corporate, Business, and
Operations
 Strategy
 Corporate Strategy: This deals with how business such as
yours are organized. Where do you fit in with other
businesses in your particular industry. This will help you
understand how you should compete.
 Business Strategy: Here you are focused on your end goal
as a business. You are not worried about other firms in
your industry. This is where you decided what you will
do next, if you will add another product or service.
 Operational Strategy: This is HOW you will function your
day to day operation. Who does what and when things
need to be done. This is the base, the methodology.
 Linkage Between
Corporate, Business, and
Operations
 Strategy
 Amongst all these strategies, business strategy is the
essence of a business, and the other two strategies
inflate the effect of this essence.
 Business strategy defines ‘what creates value?’
 Corporate Startegy and Operations Startegies build
and support the channel, which allows ‘value’ to
flow from the creator to the consumer.
 Linkage Between
Corporate, Business, and
Operations
 Strategy
 The core competencies of a firm define the basis of
the BUSINESS STRATEGY of that firm.
 The business strategy prescribes a precise method of
creating value and monetizing that value.
 It describes the way firm will exploit its core
competencies and employ its competitive strengths
in creating VALUE, viz. by producing a good, a
service or a combination of both.
 Linkage Between
Corporate, Business, and
Operations
 Strategy
 The management practices, organizational
policies,external-relationships (either with a customer, a
supplier or a competitor), and the capital structure of the
firm shape the CORPORATE STRATEGY of a firm.
 The corporate strategy focuses on adding value over and
above the value that the execution of the business strategy
brings alone.
 It focuses on providing the structural foundation that
helps the firm in meeting its business objectives.
 When the firm has zeroed down on ‘what value it will
create?’
 Linkage Between
Corporate, Business, and
Operations
 Strategy
 Then it focuses on ‘how to build that value and deliver it?’
which is nothing but the OPERATIONS STRATEGY of
the firm.
 It’s the practical version of establishing the 'value'
imagined during the business strategy formulation.
 Broadly it involves sourcing of raw materials or the feed,
processing to make the final product and delivering the
product or the service to the customer/consumer.
 It’s an extremely detailed approach and includes an
extensive list of activities, and decisions that vary from
scenario to scenario.
Developing Operations
Strategy

 Ten OM decisions that support missions and
implement strategies
 1. Goods and Service Design
 2. Quality
 3. Process and Capacity Design
 4. Location Selection
 5. Layout Design
 Developing Operations
Strategy

 6. Human Resources and Job Design
 7. Supply-Chain Management
 8. Inventory
 9. Scheduling
 10. Maintenance
 Strategy Development
and Implementation

 SWOT Analysis
 Firms position themselves, through their strategy, to
have a competitive advantage
 Recognize internal strengths and weaknesses
 Recognize external opportunities and threats
 Elements
or Components of Operations
Strategy

 1. Designing of the production system
 2. Facilities for production and services
 3. Product or service design and development
 4. Technology selection, development, and
process development
 5. Allocation of resources
 6. Focus on facilities planning
 Competitive Priorities

 Competitive priorities are the critical operational
dimensions a process or supply chain must possess to
satisfy internal or external customers, both now and in the
future.
 Competitive priorities are planned for processes and the
supply chain created from them.
 They must be present to maintain or build market share
or to allow other internal processes to be successful.
 Not all competitive priorities are critical for a given
process; management selects those that are most
important

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Competitive Priorities


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Competitive Priorities


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Competitive Priorities


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 Manufacturing
Strategies

 In general terms, manufacturing strategy can be
defined as the set of the co – coordinated objectives
and action programmes that are applied to a firms
manufacturing function and aimed at securing the
medium and long term, sustainable advantage over
that firm’s competitors.

http://www.mbaofficial.com/mba/mba-courses/operations-management/
 Manufacturing
Strategies

 Manufacturing strategy generally involves issues
like the following –
1. Manufacturing capacity
2. Production facilities
3. Use of the technology
4. Vertical integration
5. Quality
6. Production planning/materials control
7. Organization
8. Personnel
http://www.mbaofficial.com/mba/mba-courses/operations-management/
 Manufacturing
Strategies

 Procedure for the formulation of the manufacturing
strategies is
Hill Methodology – Provides a connection between
the different levels of the strategy making.
 The first step involves the understanding of the long
term corrective objectives of the organization.
 The next step involves the development of the
marking strategy in order to achieve the corporate
objectives.

http://www.mbaofficial.com/mba/mba-courses/operations-management/
 Manufacturing
Strategies

 The third step is the translation of the marketing
strategy into the ‘competitive factors’ which are
further split into the ‘order winners’ and the ‘order
qualifiers’.
 The fourth step is the selection of the manufacturing
process.
 This selection depends on the volume/variety
analysis ‘structural feature’.
 The last step is selecting the ‘infrastructural features’
of the manufacturing process.
http://www.mbaofficial.com/mba/mba-courses/operations-management/
 Service Strategies,

As with manufacturing, service operations require a
strategic approach. Metters, King-Metters, Pullman and
Walton describe the strategic planning process as
a hierarchy consisting of Strategic Positioning, Service
Strategy, and Tactical Execution
Read more:
1) http://www.referenceforbusiness.com/management/Sc-Str/Service-Operations.html#ixzz4ZFS2Ih53
2) http://www.referenceforbusiness.com/management/Sc-Str/Service-Operations.html#ixzz4ZFdZpmVk
 Service Strategies,

 At the service strategy level, the service firm must define
its service concept, operating system and service delivery
system.
 The service strategy links the firm's strategic position with
tactical execution.
 The firm begins by determining its competitive priorities,
and its order winners and order qualifiers.
 Competitive priorities are the characteristics of the firm or
things that it does better than other service firms (e.g., low
cost, quality, service, or flexibility).
 The firm's competitive priority(s) must be both an order
qualifier and an order winner.
 Service Strategies,

 The order qualifier is a characteristic that the service
must possess in order to compete in the market.
 If the firm lacks this then the consumer will not even
consider purchasing the firm's service.
 The order winner is the characteristic that will cause
the consumer to purchase the firm's service over its
competitors.
 The service concept then is the set of competitive
priorities that the target market values.
 Service Strategies,

 Marc McCluskey's service maturity model
 Global Strategies

 Identifying opportunities and threats today requires
a global perspective. A global strategy may include
buying foreign services or parts, combating threats
from foreign competitors, or planning ways to enter
markets beyond traditional national boundaries.
Although warding off threats from global
competitors is necessary, firms should also actively
seek to penetrate foreign markets. Two effective
global strategies are (1) strategic alliances and (2)
locating abroad.
 Global Strategies

 (1) Strategic alliances - A strategic alliance is an agreement
with another firm that may take one of three forms.
 Collaborative effort
 Joint Venture
 Technology Licensing

 (2) Locating abroad -Locating abroad is a key decision in

the design of supply chains because it affects the flow of
materials, information, and employees in support of the
firm’s core processes
 Role of Operations
Strategy

 Operations management handles various strategic issues
including determining the size of manufacturing plants
and project management methods, and implementing the
structure of information technology networks.

Other operational roles include the management of

 1) Inventory levels
 2) Work-in-process levels
 3) Raw materials acquisition
 4) Quality control
 5) Materials handling
 6) Maintenance policies
 Role of Operations
Strategy

 Operations management roles entails studying the
use of raw materials and ensuring minimal waste
occurs.

 Managers utilize numerous formulas such as the

economic order quantity formula to determine when
and how large of an inventory order to process and
how much inventory to hold on hand.
 Assignments

 Consider a prominent MNC of any domain – example Automobile,
Pharmaceuticals, Software, Food Products etc., (Any one Product if
the company has multiple products)

 Document the following

 Executive Summary – Organization Structure (Block Diagram)
 Vision, Mission and Objectives
 Explain their Business, Corporate and Operation Strategies
 Product Development Life Cycle they have adopted
 Quality Policy and Control methods

Minimum of 3 pages and maximum of 5 pages to be submitted by

28Feb2017