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Operations Strategy (Linking operations strategy with performance…

- - - - Concentrating expertise in a smaller number of locations to ensure that standards are maintained
      - Selecting suppliers on the basis of quality over price
      - Investing in technology that offers better precision than
        conventional standards
      - Focus on employee training and skills development to minimise staff errors
      - Involvement of the workforce in (continuous) quality improvement
      - Additional quality control steps to detect non-conformance as soon as it occurs
      - Practices and processes that are designed to be used as a fail-safe.
  - - - Locating near their customer base to minimise journey times
      - Developing fast throughput (agile) supply chains to reduce lead times
      - Designing processes with fewer stages to minimise delays
      - Having spare capacity or inventory to maintain availability
      - Using airfreight rather than shipping to speed delivery times
  - - - Smaller, more flexible machines
      - Less technology and a greater reliance on people
      - Wider range of suppliers to increase both variety and volume flexibility
      - Spare capacity to cope with peaks in demand
      - Product design based on modular principles, to increase the number of varieties possible.
  - - - Having site locations spread to reduce logistics missions and to
        spread the social benefits of employment in all market regions served
      - Developing sustainable supply chains, including: sustainable raw material sourcing and closed -loop supply chains to recycle and reuse materials such as packaging
      - Having employment contracts that reflect the values of social
        sustainability
      - Assisting with the development of local infrastructure to enhance
        economic and social sustainability.
  - - - 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.
  - - - 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.
- - - - How many facilities should we have?
      - How big should each site be?
      - Where should these be located?
      - Do we build capacity ahead of when it is needed? (Lead or lag?)
      - Do the sites do similar or different things?
      - Are the sites coordinated or do they work independently?
    - - How much of the total value chain do we own?
      - How many suppliers should we have?
      - How global is our supply network?
      - Do we outsource non-core activity?
      - Do we maintain long-term relations with key suppliers?
    - - How automated are our processes?
      - How integrated are our systems?
      - How dedicated is our technology?
      - What scale should our technology operate at?
      - Who uses our technology?
    - - How hierarchical is our management structure?
      - How central is our planning and coordination?
      - How do we group our departments?
      - What skills and capabilities do we develop in our workforce?
      - How much discretion do we give employees?
      - How do we manage shifts or work patterns?
  - - - In the long term - we need to think about how to reconfigure our infrastructure to best fit markets and potential changes in the market
  - - - Operations resources and market requirements are pushing together to co create an operations strategy
    - - Market influence
        
        Decisions are taken in the context of the market position of the organisation
        
        Differing requirements are taken into consideration based on different markets
      - Competences/capabilities
        
        Can organisations exploit their operations' competences or performance capabilities in the market place?
        
        The organisation will have a distinct competence to their brand
      - Entrepreneurial vision
        
        Strategy can be driven when entrepreneurs take a very personal view of how to configure their operations
        
        Entrepreneurs can often ignore the theory of how operations should be designed
        
        Sometimes the original nature of the idea create a unique way of how customers can be served
- - - - Defined in a variety of ways
      - High performance products - need their quality defined by a clear specification (what they can do or in terms of product characteristic)
      - Not always about trying to achieve the highest possible specification, but enough that is appropriate for customer need
      - Sometimes organisations must undergo conformance quality- specification may be fairly simple/achievable, but must be gotten absolutely right
    - - Sometimes operations need to perform a task in the shortest possible time span eg - ambulance (in this case time is a key performance objective)
      - Any form of waiting time can be a speed objective (eg lead time form an online retailer, queue in a supermarket)
      - Throughput is a speed measure - def the time taken for a resource to work through a process from start to finish
    - - Def - the ability to change what you do
      - Three types of flexibility
        
        Variety flexibility
        
        The ability to produce more than one type of product/service
        
        Mix flexibility
        
        The ability to cope with different types of customers or products at the same time or in a close sequence
        
        Volume flexibility
        
        The ability to adjust how much you produce dependent on market demand
      - Resource and range range flexibility - sometimes a change is needed very quickly (sudden rush of customers in a shop), and sometimes a change of great magnitude is needed - this can be done overtime and in a planned way
    - - Def - (1) Capable of being maintained at length without interruption, weakening or loss in power or quality (2) Relating to, or being a method of harvesting or using a resource so that the resource is not depleted or permanently damaged
      - Three aspects of sustainability
        
        Enviromental
        
        Raw materials, recyclability of packaging, carbon footprint of the factory
        
        Economic
        
        Social
      - Some of the aspects can be influenced by operations strategy decisions such as location, technology choices and supplier development
    - - Keeping your delivery promises
      - Eg - delivering an item within the specified window
      - It is NOT how good the product is and whether it will break or not
      - Schedule adherence is a key consideration in logistics
    - - Customers will consider price as one of the main buying criteria
      - There inst always a link between unit cost and price
      - Producers where the market is price sensitive will have to adapt their operations strategy to account for the impact of cost on decisions
      - Total unit cost can be affected by materials and labour, cost of equipment and working capital
      - Low cost producers aim to develop lean processes where WIP is minimised (reduces the need for working capital)
  - - - Aspects of performance that provide a key reason for a customer to buy a product/service in preference to those offered by competition/substitute providers
    - - Aspects of performance that do not provide any form of competitive advantage but are necessary to have for the customer to ever consider the purchase
      - Usually have a minimum standard/threshold that an operation needs to achieve - once this has been achieved, there is no benefit in exceeding the standard
- - - - Where a different process or facility is used for each market segment
      - Distributors serve wholesale or retail customers in separate facilities
    - - Operations will split their facilities into separate sections by
        performance requirements
      - eg separate to the standard process some services will offer
        customers a ‘fast track’ option if they need to be dealt with quickly
    - - Many systems are divided by volume, making prototypes in specialist facilities away from the higher-volume operations
    - - Some operations need to be split just because they use different
        technologies
      - eg - splitting areas into sub areas in hospital
- - - - Their operations will seek low cost strategies
    - - Their operations must be configured to meet and maintain high quality standards
  - - - Their choices of market to enter
      - Their market positioning
      - Their choices to segment markets and serve different types of customers
    - - If a company provides a service service to two separate segments with different spending habits - it becomes significantly more complex