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BXY207 Reading 12: Operations Strategy - Coggle Diagram
BXY207 Reading 12: Operations Strategy
The pattern of strategic decisions and actions that set the role, objectives and activities of the operation (Slack et al., 2010)
Decisions mainly taken in the development of four key areas:
Capacity and facilities
Supply chain and development
Technology
Workforce
Strategic reconcilliation Slack and Lewis (2002)
Short term - Infrastructure is
fixed and we need to manage this in a way that meets market demand
Long term - Need to think about how to reconfigure infrastructure
to best fit markets and anticipated changes in the market
Three general themes
about how operations strategy is defined and reconciled:
Market Influence
Context of the market position of the organisation, taking into consideration any differing requirements based on different markets or segments
Strategic
management literature of competences or capabilities
Can organisations exploit their operation's competencies or performance capabilities in the market place
Corporate or
entrepreneurial vision
Taking a personal view on how to configure operations, ignoring theory of how operations should be designed
Original equiptment (OEM)
Performance Objectives
Quality
Clear specification in terms of what they can do or product characteristics
Speed
Operations may need to be performed in the shortest possible timeframe
Flexibility
Ability to change what you do (Variety, Mix, Volume)
Dependability
Focus on delivering promises
Cost
In most markets, customers will
consider price as one of the main buying criteria, although, there isnt always a link between unit cost and price
Sustainability
Capability of being maintained at length without interruption or loss in power/quality (including resources that may be depleted or damaged)
Concept of Criteria (Hill, 1995)
Order-winning Critera
Aspects that do not provide any source of competitive advantage but are necessary characteristics to have for the customer to even consider a purchase
Order-qualifying criteria
Aspects that provide key reasons for customers to buy a product/serbice over a competitor
Linking operations strategy with PO's
Operations strategy to
improve quality :
Selecting better quality suppliers
Investing in tech
Focus on employee training and skill development
Additional quality control
fail-safe practices and processes
Concentrating expertise in a smaller number of locations
Operations strategy to improve speed :
Locating near to customer base to limit journey
Developing fast supply chains
Designing processes with fewer stages
Having spare capacity and inventory
Using airfreight rather than shipping
Operations strategy to improve quality :
Smaller, more flexible machines
Less tech, more people
Wider range of suppliers
Spare capacity
Product design to increase variation potential
Operations to improve dependability :
There is a strong relationship between dependability and process variation.
Processes that produce good quality and low variability
Operations strategy to improve sustainability :
Reducing emissions by having locations spread globally
Developing sustainable supply chains
Having sustainable contracts, values and policies
Operations strategy to improce Cost Performance :
Automation to reduce labour cost
Lean or stockless production to minimise waste or inventory costs
Self-service to replace customer labour
Outsourcing of operations to low-cost providers
Focused factory (Skinner, 1974) operations are often focused in one of four ways:
By market segment: Some may be better suited for bulk purchase for example
By concentrating on one specific performance objective
By volume
By technology speciality