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Reading 12: Operations Strategy - Coggle Diagram
Reading 12: Operations Strategy
Defining operations strategy
The pattern of strategic decisions and actions that set the role, objectives and activities of the operation
These decisions are mainly taken in the development of four key areas
1) Capacity & facilities
2) Supply chain development
3) Technology
4) Workforce
The market reconciliation model of operational strategy
Market influence - ops strategies are taken in the context of the market position of the organisation, taking into consideration any differing requirements based on different markets or segments
Some authors link operations strategy to the ideas used in the strategic management literature of competencies or capabilities
Some ops strategies can be driven by a corporate or entrepreneurial vision
An operations strategy market influence model
Ops strategies are influenced by both competitive and marketing strategies
Some organisations have a competitive strategy that dictates performance requirements to the operation
Some organisations seek to differentiate themselves or position themselves as high quality providers of goods
Marketing function places demands on operations requirements because of their decisions about their choices of markets to enter, their market positioning and their choices to segment markets and serve different types of customers
Performance objectives
Operation requirements are classified by 6 generic types of performance objectives that influence how the operation affects customer satisfaction
Quality
Speed
Flexibility
Variety flexibility - ability to produce more than one type of product or service
Mix flexibility - ability to cope with different types of cusatomers or products at the same time
Volume flexibility - ability to adjust how much you produce dependant on market demand
Sustainability
Environmental
Economic
Social
Dependability
Cost
Order 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 of performance that do not provide any source of competitive advantage but are necessary characteristics to have for the customer to even consider a purchase
Linking operations strategy and performance objectives
Operations strategy and quality
Quality performance of a system is determined by operations strategy decisions, especially those linked to process design and employee involvement
Operations strategy and speed
Pursue speed based objectives
Operations strategy and flexibility
Operations strategy and sustainability
Operations strategy and dependability
Strong link between dependability and process variation
More difficult to design into an operation compared to other aspects of performance
Operations strategy and cost performance
Cost performance is a factor in all operations strategies, and you can find a huge range of decisions and practices that help improve cost performance
Operations strategy adaptation over time
Product life cycle
Focused operations
Focused in four ways
By market segment
By concentrating on one specific performance objective
By volume