Operations

Strategy
 Understanding
Competitive
Customer Wants and
Advantage
Needs
• A firm’s ability to achieve market • Understood by segmenting
and financial superiority over its customers based on their unique
competitors. wants and needs
– Order Qualifiers: basic customer
expectations
• Requires:
▪ minimum performance level
– Understanding of customer
required to stay in business
NEEDS and EXPECTATIONS
– Order Winners: goods and
– Building and leveraging
service features and performance
operational capabilities to
characteristics that differentiate
support desired competitive
one CBP from another
priorities
▪ Help win the customers
Evaluating Goods and Services
How Customers Evaluate
Goods and Services
Competitive Priorities Cost
• The strategic emphasis that a • Low prices can be achieved
firm places on certain by:
performance measures and ❑ High Productivity
operational capabilities within ❑ High Capacity Utilization
a value chain ❑ Achieving economies of scale
• Types: ❑ Efficient design and
operation of the supply chain
✓ Cost
❑ Improvement in Quality
✓ Quality
✓ Time
✓ Flexibility
✓ Innovation
Quality
 Time Flexibility
• Important source of competitive • Manifests in mass-
advantage customization strategies
• Customers demand:
– Quick response
• Mass Customization: ability
– Short waiting times to make goods and services
– Consistency in Performance that global customers require
• Reductions at any volume and time
– Accomplished by streamlining
and simplifying processes and
value chains
– Drive improvements in quality,
cost, and productivity
 Innovation OM and Strategic
Planning
• Discovery and practical • Strategy is a pattern or plan that
application or integrates an organization’s major
commercialization of a device, goals, policies, and action sequences
into a cohesive whole
method, or idea that differs
from existing norms • Effective Strategies:
– Developed around competitive
• Innovative companies focus on:
priorities
– Outstanding product research,
– Provide focus for an organization
design, and development
and exploits its core
– High product quality competencies
– Ability to modify production • Core Competencies:
facilities to produce new Strengths unique to an
products frequently organization
 Levels of
Strategic Planning
Strategy, P1
• Process of determining long-term
goals, policies, and plans for an • Corporate Strategy
organization – Defines businesses in which
corporations participate and
develop plans for:
• Helps an organization build a strong
position to achieve its goals, despite • Acquisition and allocation
unforeseen external factors of resources among
strategic business units
(SBUs)
• Business Strategy
– Helps make decisions about the
competitive priorities that SBUs
need to pursue to gain
competitive advantage
 Levels of Strategy, P2
• Functional Strategy
– Set of decision that each
functional area develops to
support its particular
business strategy
• Operations Strategy
– Set of decisions made
across value chains that
support implementation of
higher-level business
strategies
– Developed by translating
competitive priorities into
operational capabilities
Sustainability & Operations Global Supply Chains &
Strategy Operations Strategy

• Type of an organizational • Multinational Enterprise

strategy and is also considered – An organization that sources,
corporate strategy by some markets, and produces its
companies goods and services in several
– Requires innovation in value countries to minimize costs,
chains, operations design, and maximize profit, customer
day-to-day management satisfaction, and social
activities welfare.

• Dimensions
– Environmental
– Social
– Economic
 Operations Design
Infrastructure
Choices
• Decisions made for determining the • Focuses on non-process features
process structures that are best suited and the capabilities of an
for producing goods or creating organization
services
• Includes:
• Address:
– Workforce
1. Types of processes
– Operating Plans and Control
2. Value chain integration and
Systems
outsourcing
– Quality control
3. Technology
– Organizational structure
4. Capacity and facilities
– Compensation systems
5. Inventory and service capacity
– Learning and innovation
6. Trade-off analysis
systems
– Support Services