QUESTION ONE

Quality is one of the most important performance objectives for most Global Operations
Organisations:
(a) Quality is believed to have elvolved from Japan, yet its origins are in the United States of
America (USA). Please explain such a phenomenon by also highlighting at least Six (6) Quality
Gurus that are behind the development of Quality Management         
[10 Marks]

The roots of Total Quality Management (TQM) can be traced back to early 1920s when
statistical theory was first applied to product quality control. This concept was further developed
in Japan in the 40s led by Americans, such as Deming, Juran and Feigenbaum. The focus
widened from quality of products to quality of all issues within an organisation – the start of
TQM.

The history of Total Quality Management, from inspection to business excellence.

Inspection

Inspection involves measuring, examining, and testing products, process and services against
specified requirements to determine conformity.

The use of inspection has been evident throughout the history of organised production. In the late
Middle Ages, special measures were taken to inspect the work of apprentices and journeymen in
order to guard the Guild against claims of makeshift or shoddy work.

During the early years of manufacturing, inspection was used to decide whether a worker’s job
or a product met the requirements; therefore, acceptable. It was not done in a systematic way, but
worked well when the volume of production was reasonably low. However, as organisations
became larger, the need for more effective operations became apparent.

In 1911, Frederick W. Taylor helped to satisfy this need. He published ‘The Principles of
Scientific Management’ which provided a framework for the effective use of people in industrial
organisations. One of Taylor’s concepts was clearly defined tasks performed under standard
conditions. Inspection was one of these tasks and

 was intended to ensure that no faulty product left the factory or workshop;
 focuses on the product and the detection of problems in the product;
 involves testing every item to ensure that it complies with product specifications;
 is carried out at the end of the production process; and relies on specially trained
inspectors.

This movement led to the emergence of a separate inspection department. An important new idea
that emerged from this new department was defect prevention, which led to quality control.

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Inspection still has an important role in modern quality practices. However, it is no longer seen
as the answer to all quality problems. Rather, it is one tool within a wider array. 

Quality Control and Statistical Theory

Quality Control was introduced to detect and fix problems along the production line to prevent
the production of faulty products. Statistical theory played an important role in this area. In the
1920s, Dr W. Shewhart developed the application of statistical methods to the management of
quality. He made the first modern control chart and demonstrated that variation in the production
process leads to variation in product. Therefore, eliminating variation in the process leads to a
good standard of end products.

Statistical Quality Control:

 focuses on product and the detection and control of quality problems;

 involves testing samples and statistically infers compliance of all products;
 is carried out at stages through the production process; and
 relies on trained production personnel and quality control professionals.

Shewart’s work was later developed by Deming, Dodge and Roming.  However, manufacturing
companies did not fully utilise these techniques until the late 1940s.

Quality in Japan

In the 1940s, Japanese products were perceived as cheep, shoddy imitations. Japanese industrial
leaders recognised this problem and aimed to produce innovative high quality products. They
invited a few quality gurus, such as Deming, Juran, and Feigenbaum to learn how to achieve this
aim.

Deming suggested that they can achieve their goal in five years; not many Japanese believed
him. However, they followed his suggestions. Maybe the Japanese thought it was rude to say that
they did not believe Deming. Or maybe they thought it would be embarrassing if they could not
follow his suggestions. Whatever reason it was, they took Deming’s and other gurus’ advice and
never looked back.

In the 1950s, quality control and management developed quickly and became a main theme of
Japanese management. The idea of quality did not stop at the management level. Quality circles
started in the early 60s. A quality circle is a volunteer group of workers who meet and discuss
issues to improve any aspects of workplace, and make presentations to management with their
ideas.

A by-product of quality circles was employee motivation . Workers felt that they were involved
and heard. Another by-product was the idea of improving not only quality of the products, but
also every aspect of organisational issues. This probably was the start of the idea, total quality.

Total Quality

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The term ‘total quality’ was used for the first time in a paper by Feigenbaum at the first
international conference on quality control in Tokyo in 1969. The term referred to wider issues
within an organisation.

Ishikawa also discussed ‘total quality control’ in Japan, which is different from the western idea
of total quality. According to his explanation, it means ‘company-wide quality control’ that
involves all employees, from top management to the workers, in quality control.

Total Quality Management

In the 1980s to the 1990s, a new phase of quality control and management began. This became
known as Total Quality Management (TQM). Having observed Japan’s success of employing
quality issues, western companies started to introduce their own quality initiatives. TQM,
developed as a catchall phrase for the broad spectrum of quality-focused strategies, programmes
and techniques during this period, became the centre of focus for the western quality movement.

A typical definition of TQM includes phrases such as: customer focus, the involvement of all
employees, continuous improvement and the integration of quality management into the total
organisation. Although the definitions were all similar, there was confusion. It was not clear
what sort of practices, policies, and activities needed to be implemented to fit the TQM
definition.

Quality Awards and Excellence Models

In 1988 a major step forward in quality management was made with the development of the
Malcolm Baldrige Award in the United States. The model, on which the award was based,
represented the first clearly defined and internationally recognised TQM model.  It was
developed by the United States government to encourage companies to adopt the model and
improve their competitiveness.  

In response to this, a similar model was developed by the European Foundation of Quality
Management in 1992. This EFQM Excellence Model is the framework for the European Quality
Award.

While leading organisations compete to win awards, the main purpose of these awards is to
encourage more companies to adopt quality management principles. The models are practical
tools; they help organisations to measure where they are now and where they want to be in the
future. The models also help organisations to create a plan to reduce the gap between these
positions. 

Today, hundreds of quality awards and several models exist all over the world. For more
information on some of these models, visit 'Excellence Models

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Business Excellence

TQM models are often called Business Excellence Models. Also, TQM itself is now often called
Business Excellence. This is to distinguish the “new TQM” from the past work on TQM.

As mentioned earlier, there was confusion as to what TQM was in the 80s and early 90s. This
was because any business improvement programme was becoming called TQM. Therefore, the
name TQM became tarnished. Business Excellence is really the same as TQM, but with a more
clearly defined approach. Increasing number of organisations, large or small, have become
involved in TQM/Business Excellence in the new millennium. The Centre for Organisational
Excellence Research (COER), recognised the need for resources devoted to this area and
launched the BPIR.com in April 2002.

The list of gurus are ;

1. Dr. Walter Shewhart

2. Dr. W. Edwards Deming

3. Dr. Joseph M. Juran

4. Armand V. Feigenbaum

5. Dr. Kaoru Ishikawa

6. Philip B. Crosby

(b) Total Quality Management (TQM) is anchored on Three (3) principles, what are they? and
what are their main features that aim at having TQM succeed in Global Operation
organisations?. Describe the EFQM Excellence Model and state at least Four (4) Quality awards
that incentivize Quality compliance in Global Operation Organisations
                                                                                                      [10 Marks]
The Three (3) Principles of Total Quality Management are :
(i) Customer satisfaction.
(ii) Employee involvement.
(iii) Continuous improvements in quality.
Features that aim at having TQM succeed in Global Operation Organizations are;

Benefits from TQM for Nations and Regions

Benefits from TQM for Performance and

Benefits from TQM for Financial Performance.

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The European Foundation for Quality Management (EFQM) Excellence Model, is a self-
assessment framework for measuring the strengths and areas for improvement of an organization
across all of its activities. The term ‘excellence’ is used because the Excellence Model focuses
on what an organization does, or could do, to provide an excellent service or product to its
customers, service users or stakeholders.

Quality awards that incentivize Quality compliance in Global Operation Organizations are;

1. EFQM Excellence Award of 1992

2. Malcolm Baldrige National Quality Award of 1988

3. Luxemburgish Award for Quality and Excellence of 2004

4. Deming Prize of 1951

(c). State, define and describe, Two (2) quality evaluation wheel models, Quality cycles and the
ISO 9000 quality approach for Global Operations.                                            [5 Marks]

The quality evaluation wheel models are;

Deming Model

This concept describes a Plan-Do-Check-Act wheel management model suggested by Deming.

The model is used by companies to provide a systematic approach to achieving continuous
improvement. It is a looping model based on the principles of continuous process improvement.

Malcolm Baldrige Model

This model was created to provide a standard of excellence in quality and also to help
companies achieve a high level of performance.

Its leadership and management approach is based on a set of concepts and values that include
criteria for excellence in performance, values and concepts, and guidelines for evaluation in its
processes and results. The Malcolm Baldrige model is one of the most complete, since it
incorporates the criteria of the EFQM and Ibero-American models.

Quality cycles and the ISO 9000 quality approach for Global
Operations.                                    

A quality circle is a participatory management technique that enlists the help of employees in
solving problems related to their own jobs. Circles are formed of employees working together in
an operation who meet at intervals to discuss problems of quality and to devise solutions for
improvements.

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ISO 9000 is defined as a set of international standards on quality management and quality
assurance developed to help companies effectively document the quality system elements needed
to maintain an efficient quality system. They are not specific to any one industry and can be
applied to organizations of any size.

ISO 9000 can help a company satisfy its customers, meet regulatory requirements, and achieve
continual improvement. It should be considered to be a first step or the base level of a quality
system.

References

Deming, W. Edwards, Out of the Crisis, Massachusetts Institute of Technology, centre for
Applied Engineering Study, Cambridge, MA, 1986.

Eastman Chemical Co., Papers presented at 1994 Quest for Excellence Conference, National
Institute of Standards and Technology, Washington, D.C., 1994.

Garvin, David A., "Quality on the Line," Harvard Business Review, September\ October 1983,
pages 64\ 75.

Ishikawa, Kaoru, "How to Apply Companywide Quality Control in Foreign Countries," Quality
Progress , September 1989, pages 70\ 74.

Juran, J.M., "Japanese and Western Quality\ A Contrast," Quality, January 1979, pages 8\ 12;
and February 1979, pages 12\ 15. Juran, J. M., "The QC Circle Phenomenon," Industrial Quality
Control, January 1967, pages 329\ 36.

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QUESTION TWO

In Operations Management, Services and Products are all considered operations, although
perceived different, substantiate these through the following;

(a) Why are Services perceived different to Products and what are their salient features and
examples?                                                                                                             [10 Marks]

A product is a tangible good that a customer can see, touch, feel, try on, taste or otherwise use. It
can be measured and counted where as a service is intangible -- something a customer
experiences but doesn't hold or retain. It is less concrete and is the result of the application of
skills and expertise towards an identified need. At either extreme of the business world, you have
companies that are entirely product sellers and companies that market only services.

 The characteristics that differentiate the two are as follows: 

1) Tangibility

As already mentioned, a product is tangible. Items such as packaging and presentation may
compel a customer to purchase a product. Services, on the other hand, are not tangible, which
can make them more difficult to promote and sell than a product.

2) Relationship and Value

Products tend to fill a customer's need or want, so companies can use this to sell a product. A
service is more about selling a relationship and the value of the relationship between the buyer
and seller of the service. For example, a car is something a buyer can touch and see as well as
use. A service, such as lifestyle coaching, for example, is not tangible. Therefore, the client
needs to perceive the value of the service, which can be harder to get across. 

3) One Versus Many

Marketing products tends to involve multiple products that make up the line. For example,
cleaning product manufacturers tend to market not just one cleaning product. Instead, they have a
line of cleaning products to serve the various needs of their customers. Services, on the other
hand, typically have a single option. It can be harder to promote and sell the reputation of one
single service over the benefits of many different products.

4) Comparing Quality

Measuring the quality of a product is easier than measuring that of a service. If a customer buys a
cleaning product to clean the kitchen sink and it doesn’t do the job, the customer knows the value
of the product is zero. On the other hand, it is harder to measure the quality of a service. 

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5) Return Factor - If a customer purchases a product and it doesn’t work as it is supposed to, the
customer can return the product for her money back or at least to receive a store credit. A service
is consumed as it is offered, so it lacks the return factor that a product has. Some service
providers overcome this by offering money-back guarantees. Having been aware of the
marketing mix for product marketing - the4Ps. Product, Price, Promotion and Place. When it
comes to service, there are7Ps to market a service. The first four are the same as the traditional
marketing mix and the three additional Ps Are People, Process and Physical evidence. 

 People

People are a defining factor in a service delivery process, since a service is inseparable from the
person providing it. Thus, a restaurant is known as much for its food as for the service provided
by its staff. Consequently, customer service training for staff has become a top priority for many
organizations today.

Process

The process of service delivery is crucial since it ensures that the same standard of service is
repeatedly delivered to the customers. Therefore, most companies have a service blueprint which
provides the details of the service delivery process, often going down to even defining the
service script and the greeting phrases to be used by the service staff.

Physical Evidence

Since services are intangible in nature, most service providers strive to incorporate certain
tangible elements into their offering to enhance customer experience. For example many
restaurants invest heavily in their interior design and decorations to offer a tangible and unique
experience to their guests 

 b) Identify and describe at least Ten (10) Business and Professional Services and Seven (7) Not
for profit Service providers within your domiciled Country for which their products would be
considered Services                                                                             [10 Marks]
Axis Advisory Ltd
Axis Advisory supports international companies and investors, no matter what the sector, with
all licenses, permits and Being familiar with complex legal structures, Axis Advisory can
provide assistance in setting up companies in Zambia, identifying and implementing legal
documents required for corporate activities and the transactions clients undertake. The
professional team of staff ensure all the legal aspects run smoothly and on schedule.
TopFloor Zambia

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TopFloor Zambia is able to support your organization’s growth through facilitating and
implementing various human capital Finding the right person for the role is vital for your
organisation's performance. TopFloor Zambia offers comprehensive solutions.

Astria Learning Zambia

This educational IT solutions provider partners with institutions around the world to meet the
needs of students, faculty and administrators. Astria Learning offers the robust Astria Digital
Library with millions of academic resources. The Astria LMS enables institutions to manage and
deliver engaging content and activities to learners online.
SME Accounting Services Ltd
This company offers SME financial management training solutions, professional accounting
services and business advice. SME Accounting Services' focused approach towards the SME
sector and in-depth understanding of their unique financial needs and challenges ensures it is
well-placed to create relevant systems for SMEs, providing a strong foundation for sustainable
growth. To ensure it can provide the right solution, the company is happy to respond to its
clients' challenges by partnering with other corporates.

Jekman Ltd
Focused on contributing to the growth of the Zambian economy and Africa as a whole, Jekman
offers project cargo management, cargo brokerage, out of gauge (OOG) vehicle escort services
and professional route surveys. Their team of consultants provide professional renewable energy
consultancy as well as corporate services for individuals and companies that are planning on
investing in this country. Jekman's array of logistics and consultancy services are designed to
save you time, energy and money.

Undikumbukire Project Zambia ltd

Support Legal Services for Zambian Children

This projects aims to provide access to legal assistance for children who come into conflict with
the law as well as social services to children who are detained in and released from correctional
facilities. Legal representation will be provided to ensure that all child cases undergo fair trial
devoid of prejudiced judgement. Children and families will be provided with various types of
social support during the child's detention and after the child's release including food and
therapy.

The Other Side Foundation

The Other Side Foundation is committed in nurturing at grassroots level, Orphans & Vulnerable
children through an integrated Values Based Education (Education in Human Values), Nutrition
and Health care. We further empower the widows, grandmothers and single mothers of our
students through evening adult education, skills training & microloans/seed funding. The Other
Side Foundation promotes gender equality and believes that every child needs to eat at least a
meal/day.

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Charity Centre for Children and Youth Development

Charity Centre for Children and Youth Development exists to supporting HIV/AIDS education,
Persons living with disabilities, orphans and vulnerable children, youth and women in Solwezi
district of Zambia by providing them with, educational support (provision of school requisites
and literacy materials), health and life skills and vocational Training. These enables
disadvantaged members of our society live life of independence and contribute to the national
economy.

Elizabeth Bowers Zambia Education Fund

EBZEF empowers women, children, and their community in Lumwana West, NW Zambia, to
break the cycle of poverty through education. When Elizabeth Bowers (Beth), an aquaculture
Peace Corps Volunteer in the remote rural village of Lumwana West in NW Zambia.

David Shepherd Wildlife Foundation

David Shepherd Wildlife Foundation works at all levels of the illegal wildlife chain across
source, transit and demand countries to protect elephants in the wild and to fight for their
survival. There work ranges from engaging in the international policy arena to fighting for the
toughest legal protection for elephants, to funding ground-based conservation projects to ensure
elephants remain in their natural habitat and that human-elephant conflict is reduced.

UCZ Mwandi Mission Hospital American Partners

The purpose of the Corporation is: (1)to assist the Mwandi United Church of Zambia Mission
Hospital with its provision of healthcare to the people of Mwandi, Zambia in partnership with the
United Church of Zambia and local community members by supporting a holistic approach to
delivering health care and constructing needed facilities; (2)to expand resources for the Mwandi
United Church of Zambia Mission Hospital to provide increased support capability by involving
churches and other groups who have a common mission interest; and (3)to build and maintain
relationships with The United Church of Zambia and people of Mwandi to further the activities
of the Mwandi United Church of Zambia.

Keepers Zambia Foundation (KZF)

Keepers Zambia Foundation (KZF) was registered in January 1996 as a non–profit, non
governmental organisation in response to increasing poverty levels and deprivation among peri –
urban and rural based households of Zambia.Over a period of 23 years, KZF has grown from a
regional to a national organisation by expanding activities across ten provinces of Zambia.

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(c) State and describe the Two (2) extremes of the Transformation/Manufacturing: Service
continuum for and Two (2) main areas of Service package for most Operation organisations         
[5 Marks]

The goods and services continuum enables marketers to see the

relative goods/services composition of total products. A product's position on the continuum,
in turn, enables marketers to spot opportunities. ... Products that are a combination
of goods and services fall between the two ends. Service used to be conceptualized and defined
as being a special type of product. The existence of a continuum is admitted, allowing intangible-
tangible extremes as a basis to differentiate pure goods from pure services. The most common
perception is that there are packets of products that collect goods and services (Berry and
Parasuraman, 1992), distinguishing services by their four characteristics: intangibility,
heterogeneity, inseparability and perishability (Fisk et al, 1993).

After defining the service concept, operations can proceed to define the service-product bundle

(or service package) for the organization. It consists of five parts: service facility, facilitating
goods, information, explicit service and implicit services. ... Facilitating goods: sufficient
inventory, quality and selection.

References ;

Kotler, P, Bowen, J and Makens, J. (1996). Marketing for Hospitality and Tourism. Upper
Saddle River, NJ: Prentice Hall, p. 358. Amit, R.; Zott, C. (2001). Value creation in e-
business. Strategy Management Journal; Vol. 22, N.2, pp. 493– 520.
Anderson, J. C. (2004). From understanding to managing customer value in
business markets. In: Håkansson, H. et al. (Org.) Rethinking marketing –
developing a new understanding of markets. England: John Wiley & Sons,
2004, pp. 99-116. infobwana

QUESTION THREE

Managing Inventory is cardinal in Operations Management, elucidate the statement through the
following;

(a) What is Inventory and why is it important for them to be well managed in Global Operations
explain these in terms of their Advantages and Disadvantages          [5 Marks]

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Inventory is the goods available for sale and raw materials used to produce goods available for
sale.

Advantages

 To ensure a continuous supply of raw materials and supplies to facilitate unhandled

production.
 To maintain required quantity of finished goods for smooth sales operation and efficient
customer service. If not well managed

Disadvantages

 It compels a periodic review of all items; this itself makes the system somewhat
inefficient.
 Sometimes, the orders are placed at the irregular time periods which may not be
convenient to the producers or the suppliers of the materials.

(b) Mention and briefly Five (5) types of Inventory that Operation Managers may
consider in terms of their necessity and effectiveness. Explain the principles of
how much to Order and how much to hold in Inventory Management                              
[10 Marks] 

 Raw Materials/Components:
 Finished Goods:
 Work In Progress:
 MRO Goods:
 Packing Materials:
 Safety Stock:

Principles of how much to order and how much to hold in inventory are ;

1. Demand Forecasting

Depending on the industry, inventory ranks in the top five business costs. Accurate demand
forecasting has the highest potential savings for any of the principles of inventory management.
Both over supply and under supply of inventory can have critical business costs. Whether it is
end-item stocking or raw component sourcing, the more accurate the forecast can be.

12
Establishing appropriate max-min management at the unique inventory line level, based on lead
times and safety stock level help ensure that you have what you need when you need it. This also
avoids costly overstocks. Idle inventory increases incremental costs due to handling and lost
storage space for fast-movers.

2. Warehouse Flow

The old concept of warehouses being dirty and unorganized is out dated and costly. Lean
manufacturing concepts, including 5S have found a place in warehousing. Sorting, setting order,
systemic cleaning, standardizing, and sustaining the discipline ensure that no dollars are lost to
poor processes.

The principles of inventory management are not any different from other industrial processes.
Disorganization costs money. Each process, from housekeeping to inventory transactions needs a
formal, standardized process to ensure consistently outstanding results.

3. Inventory Turns/Stock Rotation

In certain industries, such as pharmaceuticals, foodstuffs and even in chemical warehousing,

managing inventory down to lot numbers can be critical to minimizing business costs. Inventory
turns is one of the key metrics used in evaluating how effective your execution is of the
principles of inventory management.Defining the success level for stock rotation is critical to
analyzing your demand forecasting and warehouse flow.

4. Cycle Counting

One of the key methods of maintaining accurate inventory is cycle counting. This helps measures
the success of your existing processes and maintain accountability of potential error sources.
There are financial implications to cycle counting. Some industries require periodic 100%
counts. These are done through perpetual inventory count maintenance or though full-building
counts.

5. Process Auditing

Proactive error source identification starts with process audits. One of the cornerstone principles
of inventory management is to audit early and often. Process audits should occur at each
transactional step, from receiving to shipping and all inventory transactions in between.By
careful attention to each of these critical core principles, your business can increase efficiency
and reduce costs.

(C) What are the implications of Ordering Cost and Holding cost in terms of Advantages and
Disadvantages. What is Economic Order Quantity (EOQ) and Production Order Quantity
(POQ) why they recommended as the best practice to manage Inventory in Global Operations     
[10Marks]

The Economic Order Quantity model is a commonly used element of a continuous review
inventory system. It is based on a formula that calculates the most economical number of items

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 a business should order to minimize costs and maximize value when re-stocking inventory
The production order quantity is a type of inventory policy that computes the order quantity POQ
POQ POQ that minimizes the total annual inventory costs, that consists of the sum of the annual
setup costs and the annual holding costs.
Advantages
 Minimizing Storage Cost – Storing inventory may be extremely expensive for any
operation, especially small businesses. The main advantage pertaining to the EOQ model is the
customized recommendations that are provided regarding the most economical number of units
per order. Locating this number can aid with suggesting larger or smaller quantities per order to
take advantage of potential bulk buying or options. This could easily reduce storage costs as you
develop a thorough understanding of how much inventory is needed. 
 Business Specific – Maintaining sufficient inventory levels to match customer demand is
a balancing act for many small businesses. Another advantage pertaining to the EOQ model is
that it is able to provide specific numbers particular to the business regarding how much
inventory needs to be held, when to re-order it, and how many items are needed to be ordered.
This can smooth out the re-stocking process and ultimately results in enhanced customer service.
Disadvatanges
 Math Complications – While the model can be beneficial and help in understanding
inventory, the EOQ model requires a thorough understanding of algebra, which may be a
disadvantage for small business owners that are lacking math skills. Effective EOQ models
require detailed data to calculate several figures. The benefit to resolving the math is the ability
to determine how much inventory should be attached to each order at the lowest possible counts.
EOQ software could be another option if you find yourself lacking algebra and math skills.
 Assumption Based – Utilizing EOQ models assume steady demand of a business product,
which is not the case for majority of organizations. There is seasonality for all types of
businesses, and there needs to be an accounting for inventory during peak periods. It assumes
fixed costs of inventory units, ordering charges, and holding charges. This inventory model
requires continuous monitoring of inventory levels.

References ;
Wendell M. Stewart, ‘Physical Distribution: Key to Improved Volume and Profits’, Journal of Marketing,
vol. 29 (Jan. 1965) pp. 65–70. 15. Anily, S., Federgruen, A.: One warehouse multiple retailer systems with
vehicle routing costs.Management Science36, 92–114 (1990)16. Archibald, B., Silver, E.: (s,S)policies
under continuous review and discrete compoundPoisson demands. Management Science24, 899–908
(1978)17. Archibald, T., E., S.S.A., L.C., T.: An optimal policy for a two depot inventory problem withstock
transfer. Management Science43(2), 173–183 (1997)

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QUESTION FOUR

The Process of Operations Strategy needs to be well formulated for it to meet Organisation’s
business strategy. Elucidate the following;
(a) What is Operations strategy and what does seek to achieve in Operations Management in
terms of the Operations Resources Objectives and Market Requirements?             [5 Marks]

Operations strategies drive a company's operations, the part of the business that produces and
distributes goods and services. ... “Operations strategy is the total pattern of decisions which
shape the long-term capabilities of any type of operations and their contribution to the
overall strategy This operations strategy binds the various operations decisions and actions into
a cohesive consistent response to competitive forces by linking firm policies, programs, systems,
and actions into a systematic response to the competitive priorities chosen and communicated by
the corporate or business strategy.
The role of operations strategy is to provide a plan for the operations function so that it can make
the best use of its resources. Operations strategy specifies the policies and plans for using the
organization's resources to support its long-term competitive strategy.

(b) A good Process formulation must follow a rigorous approach. List Seven (7) steps that you
would follow in order to arrive at good typical process of Operation Strategy formulation and
emphasize this through 4Cs with a comprehensive definition and description of this
same 4Cs acronym.                                                                                                         [10 Marks]

The seven (7) steps are;

1. Understand the need for a strategic plan.

2. Set goals.
3. Develop assumptions or premises.
4. Research different ways to achieve objectives.
5. Choose your plan of action.
6. Develop a supporting plan.
7. Implement the strategic plan.

The 4Cs to help emphasize and formulate a good typical process of operation strategy .

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The 4 C’s of marketing, which consist of Consumer wants and needs, Cost, Convenience, and
Communication, are arguably much more valuable to the marketing mix than the 4 P’s. They
focus not only on marketing and selling a product but also on communication with the target
audience from the beginning of the process to the very end. The 4 P’s focus on a seller-oriented
marketing strategy, which can be extremely effective for sales. However, the 4 C’s offer a more
consumer-based perspective on the marketing strategy like;

1. Customer Wants and Needs

The first C in this marketing mix is the customer’s wants and needs. Instead of focusing on the
product itself, the first C focuses on filling a void in the customer’s life. This marketing strategy
is important for businesses that are interested in seeking an understanding of their customers.
Once you understand your customer, it becomes much easier to create a product that will be of
benefit to them. The customer makes the purchase decision and is, therefore, the most valuable
resource in any marketing strategy.

2. Cost

The Second C in this marketing mix is cost. Don’t confuse the cost of your product with its price.
Price is only a small segment of the overall cost of buying a product to a customer. It is
important to determine of overall cost – not price – of your product to the customer. Cost not
only includes price of the item, but also may include things such as the time it takes for the
customer to get to your location in order to buy your product, or the cost of gas that it takes to get
them there. Cost can also include the product’s benefit, or lack-there-of, to the customer.

3. Convenience

The Third C within this marketing mix is convenience. Convenience is similar to “place” in the
4P’s marketing strategy. However, these two are very different. Place simply refers to where the
product will be sold. Convenience is a much more customer-oriented approach to this marketing
strategy. Once you have analyzed your customer’s habits, you should be able to know whether
they shop online or in stores as well as what they are willing to do to buy your product. The
overall cost of the product will determine in part its convenience to your target audience. The
goal is to make the product cost effective and simple enough for the customer to attain the
product without having to jump through hoops.

 4. Communication

The fourth and final C in this marketing mix is communication. Communication is always key to
business marketing; without it, the 4 C’s would not be effective. Communication is similar to the
fourth P, promotion; however, it is very different.

Promotion of a product is used to sway customers in order to get them to buy a product.
Promotion can often be manipulative and ineffective. However, communication is (again) a
customer-oriented approach to the task of selling products. Communication requires interaction

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between the buyer and seller. This marketing strategy can very easily be implemented through
the use of social media.

Marketing a product on your social media sites, or even including links to your social media
profiles can be very beneficial to your customers. This allows them to interact with your brand
on a personal level and will eventually lead to greater brand loyalty among your customers.

(c)Ken Platts of Cambridge University has written about the nature of Operations Strategy
Process. His generic description of the process is referred to as the 5Ps. Identity and briefly
explain these 5Ps in terms of characteristics and significance in the process of Operations
Strategy formulation, for effective implementation                                             [10 Marks]

The Canadian management scientist Henry Mintzberg distinguished five visions for strategy for
organisations. He calls them the 5 P’s of Strategy. They stand
for Plan, Pattern, Position, Perspective and Ploy.
These five components allow an organisation to implement a more effective strategy. A strategy
is aimed at the future, concerns the long term and involves different facets of an organisation.
Competition is always a factor, but it would be a mistake to develop strategies only aimed at
competitors. The strategies should also take into account the organisational culture and the other
possibilities and developments within an organisation.

According to Mintzberg, developing a good strategy is difficult. With the help of the 5 P’s of
Strategy, you can at least include as many different aspects as possible and approach the strategy
from different perspectives.

1) Plan

It is always better for the organizations to have a plan of action much in advance to be prepared
for any unforeseen internal and external situations. And a well-planned strategy is a plan to deal
with such situations. A plan needs to be made with a long-term and a futuristic approach in mind
with its execution and development followed up in a detailed and intricate manner.The
business goals and objectives can be attained with a good plan plus it enables the management
and the key employees of the company with a clear vision and mission in hand.

2) Ploy

The facet of ploy is also one of the strategic options to beat the competition in the market and
gain the advantage. In this scenario, the organizations can come up with something very
outlandish and unexpected and surprise the market environment that also creates the waves of the
ruckus within the minds of the competitors.It can be a well placed promotional tool or a feature
in the product or service that is sure to outsmart and beat the competitors as a ploy.

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3) Pattern

As mentioned earlier, the aspect is the plan in the 5 P’s of Strategy model by Mintzberg focuses
on the intended strategy but the aspect of pattern comes into the picture where the strategies have
already been implemented before. The earlier patterns that have worked wonders for the
organization before are an integral part of developing the new strategy. The regular pattern that
has been quite successful in nature is used in the decision making flow and process. The
strengths of such patterns are included in the future strategies as intentionally or unintentionally,
there is a consistent positive behavior of employees and internal teams is displayed towards these
patterns and are well accepted without any prejudice and issues.

4) Position

The aspect of position in formulating the organizational strategy needs to be carefully

understood, designed, planned, and executed as it will define the overall position of the
organization in the market considering all the internal and external factors.

It focuses on how the organization wants to portray itself in the market and in the minds of the
consumers that will gain it a competitive advantage. What will be the core values, unique selling
propositions, nature and attributes of the offerings of products and services, and the
overall brand strength and value proposition? Working on all these factors in a detailed manner
will help the organization carve a distinctive position in the market with an edge over others.

5) Perspective

The facet of perspective in the model of 5 P’s of Strategy is quite indifferent to all of the above-
mentioned paths this one draws a larger perspective keeping the organization at the focal
point.The organization formulates the strategy by dwelling on the crucial and important details
such as how does the target audience think about the organization? How do employees of the
company perceive the management and the brand as a whole? What is the perspective of the
investors and other stakeholders of the organization? The culmination and thought patterns of all
these individual perspectives work as the valuable source of information for the company and
help it to make a strategic choice.

References ;

Mulder, P. (2018). 5 P’s of Strategy by Henry Mintzberg. Retrieved [insert date] from toolshero:
https://www.toolshero.com/strategy/5-ps-of-strategy/, Mintzberg, H. (1978). Patterns in strategy
formation. Management science, 24(9), 934-948.

1. Mintzberg, H. (1987). The strategy concept I: Five Ps for strategy. California management review,
30(1), 11-24.

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 2. Mintzberg, H. (2000). The rise and fall of strategic planning. Pearson Education,
ManagementStudyGuide.com and the content page url. ,

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