Please enable JavaScript.
Coggle requires JavaScript to display documents.
Session 9: Reading 12 - Operations Strategy - Coggle Diagram
Session 9: Reading 12 - Operations Strategy
Defining Operations Strategy
Pattern of strategic decisions and actions that set the role, objectives and activities of the operations (Slack et al., 2010) - Table 1 pg 102 - list of questions for each decision area
Decisions usually happen in development: capacity & facilities, supply chain development, technology and workforce
other tactical decisions -involve detailed system design, planning and control and must be consistent with the infrastructure
In practice - can be seen as market reconciliation - how does it fit to meek market requirements
Figure 1 : diagram of strategic reconciliation pg 103
3 general themes of operations strategy (slack & lewis)
Market influence: market position for segments/different markets
Strategic management literature of competences or capabilities - exploit operation into other markets (cars to motorcycles)
Corporate/Entrepreneur vision: unique vision doing something out of the box.
An Operations strategy market influence model
Figure 3 - page 105: Operations capabilities and capacities
operations strategy influenced by competitive and marketing strategies
some have very clear competitive strategies - low cost options or high quality.
marketing function demands on operations requirements - depending on the market requirements/locations etc
OEM / Aftermarket segments
Performance Objectives
Operations requirements are dictated by the customers needs in chosen segments/competitive strategy. classified by 6 generic types of performance objectives that influence how the operation affects customer service
Quality: high performance products with clear spec whether high or low. consistent quality
Speed: operations in shortest possible times. products/services that need short lead times, including queue
Flexibility: able to change what you do variety flexibility - producing more than one type of product or service / mix flexibility - ability to cope with different customers/products at same time or near enough. Volume Flexibility - ability to adjust volume produced depending on time.
change can be needed suddenly or planned - response or range flexibility
Table 2. Examples of flexibility
Sustainability: 2 definitions
i. capable of being maintained at length without interruption, weakening or loss in power or quality
ii. of relating to or being a method of harvesting or using a resource so that the resource is not depleted or permanently damaged
Three well known aspects of sustainability: environmental, economic and social sustainability
Some can be influenced by operations strategy decisions such as location, technology/supplier choices
Dependability: keeping promises/delivery promises, performance - mainly operation logisitics
Cost: not always a link between cost and price - materials, equipment, working capital.
Orde-winning criteria - aspects of performance that provide a key reason for a customer to buy a product or service in preference to those offered by competitors or substitutes
Order qualifying criteria: aspects opf performace that do not proide any source of competitive advantage but are necessary characterisitcs to have for the customer to even consider a purchase. Oftern qualifying criteria will have a minimum standard or threshold that an operationneeds to achieve, but once this standard is achieced there is little or no additional benefit to exceeding that standard
figures 4 & Fife of graphs
Performance objectives concept open discussions of why customers choose the products/services and what is important to them/market
people will be willing to pay more or less dependent on other factors
Figue 6. Polar representation of performance objectives
Linking operations strategy and performance objectives
Operations strategy and quality
quality performance of a system is mainly determined by operations strategy decisions, especially those linked to process design and employee involvement
Examples of adapting ops strategy to achieve better quality:
concentrating expertise in a smaller number of locations to ensure standards are maintained
selecting suppliers based on quality not price
investing in precision tech
focus on skills & development training
quality improvement involvemnet of workforce
additional quality control steps
practices and & processes designed as fail-safe
Operations Strategy & Speed
When req to pursue speed based objectives, these decisions help:
location close to customer (delivery/collection)
developing fast reliable supply chains
design process with fewer stages
spare capacity or inventory to maintain availability
air opposed to shipping
Operations strategy and flexibility
To improve flexibility
smaller/flexible machines
less technology more reliance on people
wider range of suppliers to increase variety and volume flexibility
sparecapacity to cope with peaks in demand
product design based on modular principles to increase number of variables
Operations strategy and sustainability
mostly focus on environmental sustainability. Reduce Co2 emissions, landfill waster, unnecessary consumption
Other options:
having multiple sites worldwide to reduce emissions, produce more jobs in different regions
developing sustainable supply chains; sustainable raw material sourcing, closed loop supply chains to recycle and reuse materials in packaging
employment contracts value social sustainability
assisting with development of local infrastructure to enhance economic and social sustainability
Operations Strategy and Dependability
dependability difficult to design into operation, although;
promises made at the order-taking stage must be realistic and achievable
the control systems must be capable of progressing work to the required schedule, without errors
strong relationship between dependability and process variation. If good process with little errors or variability process is predictable and dependable. managers can predict completion dates accurately
Operations Strategy and cost performance
Cost massive factor - many strategies are based to reduce cost
out of town retail locations to reduce purchase or rental costs
automation to reduce labour cost
lean or stockless production to minimise waste or inventory costs
self-service operations to replace paid labour with unpaid customer labour
-outsourcing of non-core operations to low-cost service providers
Operations strategy adaption over time
often to adapt and change over time
Figure 7 pg 113 product life cycle graph
table 3 - change of performance objectives over product life cycel
Performance Trade Offs
Ops can not be the best at everything - quality, speed, price, customisation,
Op managers often need to comprise on certain aspects to deliver on others. quality for speed etc - but will try to do the best and still meet customers needs
Focused Operations
Operations to be designed to meet performance requirements in marketplace, there is a challenge when one opeeration serves different markets with different needs - do they need to diver operations and use different processes? or locations?
By Market Segment: different facilities, locations for different customer groups
By concentrating on one specific performance objective
split facilities into different sections based on performance requirements eg fast track
By Volume:
prototypes in one and high volume operations in other facility
Technology speciality:
Split because different use of technology used eg hospital departments