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Operations Strategy

Operations strategy of the various business and their aspects are discussed briefly and throughout this ppt

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yatinverma2510
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27 views23 pages

Operations Strategy

Operations strategy of the various business and their aspects are discussed briefly and throughout this ppt

Uploaded by

yatinverma2510
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPT, PDF, TXT or read online on Scribd
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Operations Strategy and

Competitiveness
By
Dr. Abhay K Srivastava
OBJECTIVES
 Operations Strategy
 Competitive Dimensions
 Order Qualifiers and Winners
 Strategy Design Process
 A Framework for Manufacturing Strategy
 Service Strategy Capacity Capabilities
 Productivity Measures
2-3

What is Operations Strategy?

• Operations strategy is concerned


with setting broad policies and plan
for using the resources of a firm to
best support its long-term
competitive strategy.
Operations Strategy
Strategy Process Example

Customer Needs More Product

Corporate Strategy Increase Org. Size

Operations Strategy Increase Production Capacity

Decisions on Processes
and Infrastructure Build New Factory
Competitive Dimensions
 Cost or Price
– Make the Product or Deliver the Service Cheap
 Quality
– Make a Great Product or Deliver a Great Service
 Delivery Speed
– Make the Product or Deliver the Service Quickly
 Delivery Reliability
– Deliver It When Promised
 Coping with Changes in Demand
– Change Its Volume
 Flexibility and New Product Introduction Speed
– Change It
 Other Product-Specific Criteria
– Support It
Dealing with Trade-offs
For
Forexample,
example, ififwe
wereduce
reducecosts
costsby
byreducing
reducingproduct
product
quality
qualityinspections,
inspections, we
wemight
mightreduce
reduceproduct
productquality.
quality.

For
Forexample,
example, ififwe
we
improve
improvecustomer
customer Cost
service
serviceproblem
problemsolving
solving
by
bycross-training
cross-training Flexibility Delivery
personnel
personnel to
todeal
deal with
withaa
wider-range
wider-rangeofof Quality
problems,
problems, they
theymay
may
become
becomeless
lessefficient
efficientat
at
dealing
dealingwith
withcommonly
commonly
occurring
occurringproblems.
problems.
Order Qualifiers and Winners
Defined
Order qualifiers are the basic criteria
that permit the firm’s products to be
considered as candidates for purchase
by customers

Order winners are the criteria that


differentiate the products and services
of one firm from another Ex Product
Price, product quality
Order Qualifier and Order Winner
 It describes marketing oriented
dimensions that are key to competitive
success.
 It also changes with time

 Ex- Earlier Price and Quality were

considered as Order winning criterion


for Japanese cars, now it has become
order qualifiers and features and safety
are considered as order winner criterion
Service Breakthroughs
 A brand name car can be an
“order qualifier” Ex- Hyundai,
Maruti

Repair services can be “order


winners” Ex- Maruti
Examples: Warranty, Roadside Assistance,
Leases, etc.
Strategy Design Process
Strategy Map What it is about!
Financial Perspective Improve Shareholder Value

Customer Perspective Customer Value Proposition

Internal Perspective Build-Increase-Achieve

Learning and Growth Perspective A Motivated and Prepared


Workforce
Kaplan and Norton’s Generic
Strategy Map
In the Kaplan and Norton’s Generic Strategy
Map, under the Financial Perspective, the
Productivity Strategy is generally made up from
two components:

1. Improve cost structure: Lower direct and


indirect costs
2. Increase asset utilization: Reduce working
and fixed capital
Kaplan and Norton’s Generic
Strategy Map (Continued)
In the Kaplan and Norton’s Generic Strategy
Map, under the Financial Perspective, the
Revenue Growth Strategy is generally made
up from two components:
1. Build the franchise: Develop new sources of
revenue
2. Increase customer value: Work with
existing customers to expand relationships
with company
Kaplan and Norton’s Generic
Strategy Map (Continued)
In the Kaplan and Norton’s Generic Strategy
Map, under the Customer Perspective, there
are three ways suggested as means of
differentiating a company from others in a
marketplace:

1. Product leadership
2. Customer intimacy
3. Operational excellence
Kaplan and Norton’s Generic
Strategy Map (Continued)
In the Kaplan and Norton’s Generic Strategy
Map, under the Learning and Growth
Perspective, there are three principle
categories of intangible assets needed for
learning:

1. Strategic competencies
2. Strategic technologies
3. Climate for action
2-15

Operations Strategy Framework


Operations Strategy Framework
Customer Needs

New product : Old product

Competitive
dimensions & requirements

Quality, Dependability, Speed, Flexibility, and Price

Enterprise capabilities
Operations
Operationsand Suppliercapabilities
& Supplier Capabilities
R&DR&D Technology SystemsSystems
Technology People
People Distribution
Distribution

Support Platforms
Financial management Human resource management Information management
Steps in Developing a
Manufacturing Strategy

 1. Segment the market according to the


product group
 2. Identify product requirements, demand
patterns, and profit margins of each group
 3. Determine order qualifiers and winners for
each group
 4. Convert order winners into specific
performance requirements
Operations Strategy in
Services
 Aligned with corporate strategy

 Focus on service delivery systems


What is Productivity?
Defined
Productivity is a common measure
on how well resources are being
used. In the broadest sense, it can
be defined as the following ratio:
Outputs
Inputs
Total Measure Productivity
Total Measure Productivity = Outputs
Inputs

or
= Goods and services produced
All resources used
Partial Measure Productivity

 Partial measures of productivity =

 Output or Output or Output or Output


Labor Capital Materials Energy
Multifactor Measure
Productivity
 Multifactor measures of productivity =

 Output .
Labor + Capital + Energy

or

 Output .
Labor + Capital + Materials
Example of Productivity
Measurement
 You have just determined that your service
employees have used a total of 2400 hours of
labor this week to process 560 insurance
forms. Last week the same crew used only
2000 hours of labor to process 480 forms.
 Which productivity measure should be used?
 Answer: Could be classified as a Total
Measure or Partial Measure.
 Is productivity increasing or decreasing?
 Answer: Last week’s productivity = 480/2000 = 0.24,
and this week’s productivity is = 560/2400 = 0.23. So,
productivity is decreasing slightly.

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