Term Paper

On
“Operations Strategy in Bangladesh from 2000-2015”
Submitted To:

Dr. Md. Hasibur Rashid

Professor,

Department of MIS

University of Dhaka

Submitted By:

Kamal Hossen
(ID: 09-096)

Batch-9th

MBA Program

Department of MIS

University of Dhaka

Date of Submission: 31th January, 2019

Abstract
Operational strategies refers to the methods companies use to reach their objectives. By developing
operational strategies, a company can examine and implement effective and efficient systems for
using resources, personnel and the work process. Service-oriented companies also use basic
operational strategies to link long- and short-term corporate decisions and create an effective
management team. It is, therefore, operations strategy can be implemented to achieve a
competitive edge in the market and built core competencies which are the distinct capabilities of
the organizations. Management of companies often fails to understand operations strategy and its
benefits and challenges. This study involves an effort of collecting and analyzing data from
numerous sources to explore organizations strategy in Bangladesh from 2000 to 2015. In this
regard, numerous techniques of operations strategy have been identified.

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Contents
Abstract ........................................................................................................................................... 1

1. Introduction ............................................................................................................................. 3

2. Literature Review .................................................................................................................... 4

3. Methodology............................................................................................................................ 7

3.1. Objectives of the study ..................................................................................................... 7

3.2. Analysis of the study ........................................................................................................ 8

3.3. Limitations of the study.................................................................................................... 8

4. Operations Strategy in Bangladesh.......................................................................................... 9

4.1. Elements of Operations strategy in Bangladesh ............................................................... 9

4.2. Operations Strategy Practices......................................................................................... 10

4.3. Performance Objectives of operations strategy .............................................................. 13

4.4. Operations strategy challenges in Bangladesh ............................................................... 14

5. Conclusion and Recommendation ......................................................................................... 16

6. References ............................................................................................................................. 17

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 1. Introduction
Operations strategy manages resources needed to produce the company's goods and services.
Operations strategy is the plan that specifies the design and use of resources to support the business
strategy. This includes the location, size, and type of facilities available; worker skills and talents
required; use of technology, special processes needed, special equipment; and quality control
methods. The operations strategy must be aligned with the company's business strategy and enable
the company to achieve its long-term plan.

Operation Strategy is the most significant function for an business organization in fact. Operation
Strategy refers to a functional work for an organization in fact. This is a function of management
of an organization. It plans, organizes, decorates and controls the process in the production system
in an organization. A product or service is facilitated in the time of production by this operation
Strategy eventually. The activities of operation Strategy in an organization can be referred as the
significant and core function in fact. Operation Strategy also solves the production related
problems of the organization critically. Every business has certain defined objectives and
operations strategy is an effective method that helps the business to reach those objectives.
Operations strategy deals with the supply of both goods and services in service and manufacturing
industries. It also engages the responsibility of bringing the operation efficiency of using the
resources. Since operations strategy involves the value chain facilities, it may be helpful for
businesses to create core competencies and achieve distinct capabilities. Most often, the nature of
operations strategy depends on the nature of both the products and services that are produced and
offered by the business. On the other hand, the success of an organization depends on the proper
control of the business processes which isn’t possible without an effective operations strategy.
Operations strategy in a business can be implied through process reengineering, product design,
strategic capacity planning, improving supply chain management, improving waiting line,
inventory management, integrating technologies and so on. However, there are certain objectives
that drive businesses to implement organizations strategy in the business. Some of the common
objectives in this regard are related to quality, cost, and flexibility. When the operations strategy
helps the business achieve these objectives, it is deemed that the operations strategy was effective
and successful. In recent years, lots of studies have been made by many academics and
professionals to understand why some operations strategy results in success and why some doesn’t.

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This study focuses on the practices, challenges and other aspects of operations strategy in
Bangladesh. Understanding this will help individuals to get an idea about the current state and
potential areas for improvement of operations strategy practices in Bangladesh. In this regard, lots
of popular companies have been studied to address their organizations strategies covering from
2000-2015. Many important insights have been disclosed by the effort made for completing this
study.

2. Literature Review
Operations strategy is the result of the evolution of various strategic practices. Numerous studies
tried to identify the pattern and characteristics of operations strategy. Skinner (1985) made a
thorough review of the evolution of manufacturing leadership. His study suggested that the
scientific management period (1890 to 1920) witnesses the early days of operations management
emergence. Skinner also defined the 1920-1960 period as the golden age for the industrial
development in the US. Operations management during this period used to focus on the
improvements of operations strategy regarding labour productivity, motion study, production
control, and queuing theory (Bayraktar et al., 2007). However, the operations manager and
researchers during 1946-1970 were mainly dealt with optimizing problems that exist in functional
areas. Therefore, the focuses were narrowed within operations research and management science
application (Chopra et al., 2004). The growing popularity of operations management was also
observed by Chase and Prentis (1987) in the 1960s when they found that the scope of operations
management began to extend into the service organizations. Operations strategy deal with the input
and output and the proper utilization of resources to achieve some performance objectives. It is
also defined as the transformation process. In the study of Harry and Schroeder (2000), the Six
Sigma was introduced in this regard to concentrate on building an effective process of creating as
well as eliminating defects for product or services quality control. On the other hand, Filippini
(1997) argued that being one of the basic functional fields of an organization, operations
management was widely accepted in the 1980s. The practice of operations strategy commences
focussing on developing a new product, lowering cost, promoting service operations, improving
the manufacturing strategies when the Japanese manufacturing of products started getting success
in the global market.

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The study of Ward et al. (1998) on manufacturing firms found four distinct scales for
organizations’ competitive priorities that include – cost, quality, flexibility and the delivery time.
These scales were later established as the primary objectives of operations strategy. Brown et al.
(2013) also argued that operation strategy cannot focus on the core of manufacturing or services
activities. This is because their immediate supports must be taken into the consideration of the
market as well as delivery. In addition, Wright and Mechling (2002) identified some important
operations strategies such as forecasting, quality management, resource utilization etc. for small
service organizations.

Heizer (2006) provide suggestion that lowering the cost of the operation was the key function of
early practices of operations strategy especially in the 1980s. However, this key function was
shifted to quality from cost in the 1990s by linking the leanness with the information systems.
However, since the last decades, the practice of customization to fulfil customer requirements is
becoming popular in operations management. In this regard, Yang Hsu and Ching (2002) has
suggested PDC (Product design chain) in order to develop a framework that can link customers,
manufacturing planners and product design engineers. This PDC identified the key factors such as
the method for determining the way or process to shorten the project completion time and the way
to enhance the product manufacturing process.

However, Chopra et al. (2004) identified important insights into the design and management of
the transformation process in both manufacturing and service business organizations that create or
add value for society. Operations strategies are uniquely associated with these processes of design
and management. The current practices of operations strategy in business integrated many classical
functions that are under the label of common business processes (Bayraktar et al., 2007). Most
often the operations strategy started with the common approach of reengineering. In this regard,
Dess et al. (2003) found rule-based control is the most effective as well as appropriate in
organizations that have stable as well as predictable environments, unskilled and interchangeable
employees, critical consistency in product and service and so on. Roth (2007) highlights empirical
science and its contribution to operations strategy research and practice. Ferdousi (2009) identify
the benefits of lean manufacturing in many factories of Bangladesh. He also added that both
developed and developing countries to achieve performance improvement. This study has
evaluated the practice of operations strategy in Bangladesh for a specific period of 2000-2015.

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This discusses the operations strategy in contemporary societies as well through identifying current
practices and challenges.

Purpose of operations strategy

Operations strategy is only one part of overall business or corporate strategy, but it’s crucial for
competitiveness and success. Without a strong operations strategy, companies fail to keep up with
changing markets and lose out to more strategic competitors. Many companies, big and small, have
struggled with operations strategy, often lacking in comparison with technologically savvy
competitors. For example, Amazon, while constantly advancing technology such as drones for
delivery, has pushed aside myriad brick-and-mortar retailers.

To be effective and competitive, all parts of a company must work together. All departments
should contribute to the company mission and have strategies underlying the overall
corporate/business strategy. In addition to having an operations strategy, they should also have
functional area strategies in finance, IT, sales, marketing, human resources, and possibly other
departments, depending on the type of business.

“An operations strategy should guide the structural decisions and the evolution of operational
capabilities needed to achieve the desired competitive position of the company as a whole,” says
Tim Laseter in his article "An Essential Step for Corporate Strategy.”

These days, however, it’s not enough to simply follow best practices. Companies must innovate,
not just play catch-up to practices already mastered by competitors.

Authors Steven C. Wheelwright and Robert H. Hayes categorized types of organizations based on
a company’s attitude toward operations:

Stage 1, Internally Neutral: The operations function is reactive and viewed as a necessary evil.

Stage 2, Externally Neutral: The operations function adopts best practices and tries to match the
competition.

Stage 3, Internally Supportive: The operations function tries to provide support for the overall
business strategy.

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Stage 4, Externally Supportive: The operations function provides competitive advantage for the
company, and sets the industry standard.

Core operational strategy

Different sources use different terms to describe strategy areas. Here’s one way to categorize core
strategies:

Corporate: Overall company strategy, driving the company mission and interconnected
departments

Customer-Driven: Operational strategies to meet the needs of a targeted customer segment

Core Competencies: Strategies to develop the company’s key strengths and resources

Competitive Priorities: Strategies that differentiate the company in the market to better provide a
desired product or service

Product or Service Development: Strategies in product design, value, and innovation

3. Methodology
3.1. Objectives of the study
 To outline the scope of operations strategy in Bangladeshi companies
 To assess different operations strategies in different organizations;

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  To identify the challenges of implementing an operations strategy;
 To provide recommendations for implanting organizations strategy.

3.2. Analysis of the study

The study is done based on the secondary sources. The secondary data was collected from
numerous research and articles conducted on the implication of organizations strategy in
Bangladesh. In addition, data analysis has been made using various techniques. Numerous
software such as MS Word and PowerPoint has been used to conduct analysis, graph and figure.

3.3. Limitations of the study

Discussing the operations strategy from 2000-2015 is not an easy task. There are hundreds of
companies in Bangladesh and going through each of the company isn’t possible. Therefore, twenty
organizations have been selected to analyze operations strategy in Bangladesh. These companies
are operating within 2000-2015 so that accurate analysis can be made. Since the sample size is
small, it may not illustrate the entire scenario of the picture. So, these were the limitations of these
study. Following are the limitations:

1. Each Organization wants to maintain information confidentiality.

2. Employees may provide wrong information.
3. Many aspects are not discussed because of short time.
4. Lack of experience.
5. I am not able to obtain more information because of secrecy.
6. Latest data are not available.
7. Entrance in every desk and talk to every employee is not possible.

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 4. Operations Strategy in Bangladesh
In this section, this study explains the operations strategy in Bangladesh from a different
perspective such as elements, common techniques, key performance objectives, and key
challenges of operations strategy in Bangladesh. This multi-dimensional description can be
facilitating in digging into the practice of operations strategy (Slack & Lewis, 2002).

4.1. Elements of Operations strategy in Bangladesh

Operations activities are responsible for producing and delivering the desired product and services
to customers. Operations strategy is a set of processes that encompass activities including planning,
implementing and thoroughly supervising the entire production and delivery procedures in the best
possible way (Hayes, 2006). Some people used to think operations as the daily activities as well
as tactics that transform raw materials or actions into a final or finished product or service.
However, operations strategy tends to be on a higher level that determines appropriate approaches
and goals towards operations management. Mahmood et al. (2001) identified operation activities
in companies like Runner and Walton may include – obtaining as well as transporting raw
materials, dealing with the suppliers, conducting the steps that transform raw materials into parts,
assembling the vehicles, maintaining quality and so on. Operations strategy for these companies
is responsible for managing and optimizing the entire path of the value chain. In this regard, the
operations strategy may contribute to product design, facility layout and capacity planning and so
on.

Since this study covers the practices of operations strategy in Bangladesh during 2000-2015, it has
made a summary of the common elements that were found in the practice of operations strategy in
Bangladesh. Common operations strategy elements such as product design, location, process
design, and inventory management were seen in some manufacturing companies like Pran,
Beximco, BSRM, Akij, and so on. In contrast, service industry includes healthcare industry,
consulting firm, training institution where the common operations elements were quality
management, scheduling, reliability and maintenance (Islam et al., 2011).

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 Figure: Elements of operations strategy

4.2. Operations Strategy Practices

Businesses constantly look for methods and techniques to improve their product as well as service
appeals to ensure business growth. In Bangladesh, the practice of operations strategy is growing
since last few decades (Dornier et al., 2008). Therefore, this report puts an effort to explore some
critical insights into the implementation of operations strategy from 2000 to 2015. Since the total
number of companies operating in Bangladesh is very large, twenty popular companies have been
chosen to thoroughly illustrate operations strategy practices in their regular business activities.
This section identifies the different techniques of operations strategy in Bangladesh from 2000-
2015.The study found numerous examples of numerous techniques of operations strategy practised
by many business organizations. Aarong is a popular brand for personal and household goods.
Since its inception, it exploits various operations strategy. It has implemented capacities and
facilities plan. Since 2000, it has increased 9 outlets around the country to increase sales and attract
more customers. It has also incorporated a process design strategy. Once it used to sell goods
produced by itself. In recent time, it manages to collect finished products from different suppliers
especially for household goods. It also offers home delivery services along with store selling.
Operations strategy has also been taken to bring changes in the payment system. It now allows
online payment through credit card. This practice can also be seen for Rokomari.com where buyers
can make an online payment to get their desired books. Walton is our local brand that is producing
numerous electronic products. Its most common operations strategy is outsourcing. Most of the
parts of its products come from China and later assembled in local facility plants. Prothom-Alo is
a popular daily newspaper in the country. It has shifted to e-paper incorporating technologies as
its greatest operations strategy. It also introduced subscription system to read their news on the

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web. Akij is one of the largest conglomerates of the country that has constantly implemented
horizontal integration. This operations strategy has been incorporated by other companies
including – Beximco, Bashundhara Group, Pran and so on. The following table summarizes the
common operations strategies practices in Bangladesh that have been found from studying
different organizations.

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Operations strategy of PRAN RRL plastic limited:

Product Production Customer Orders

Forecasts Plan

Master Schedule

Inventory Material Requirements

Status Records Planning (MRP)

Planned Order Released Work

release Orders

Capacity
Requirements
Planning

Work Orders
Purchase
Orders
Loading &
Storage Scheduling

Manufacturin
g
Products

To Customer

Figure: Operations strategy of PRAN RFL plastic

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 4.3. Performance Objectives of operations strategy
In the early 80s, cost, quality, flexibility etc. scales were used as the performance objectives of
operations strategy. Nahmias & Cheng (2008) found it necessary for businesses to evaluate or
measures the outcome and impact of implementing an operations strategy. There are many ways
available to measure the effectiveness and efficiency of operations strategy to determine whether
it is going well or not. However, many companies prefer financial indicators to measures such
performance which doesn’t necessarily always portray the actual scenario. There are lots of
situations where the positive financial result may explain something else. For example, one may
encounter a situation in which the net income of the company is increasing along with the operating
expenses. So, financial parameters are not accurate in explaining operations strategy.

This study explains the success and failure to achieve key performance objectives by the
companies. It has been evident that most of the companies were successful in achieving their
performance objectives (Gorm Rytter, Boer, and Koch, 2007). Walton designs its facilities in
certain locations where adequate employees are available that reduces the cost of manufacturing.
Many companies nowadays sell product online that reduces the necessity for building outlets. For
example, Yellow and Ecstasy now offer online purchase opportunity for customers that reduce the
pressure for extending brick and mortar stores. Prothom-Alo reduces its printing pressure through
e-paper. Many small and medium enterprises are involving a partnership with other companies to
increase the speed of their delivery. For example, many restaurants are partnered with Food Panda
which is a food delivery company. On the other hand, small fashion brands are in collaboration
with Pathao to deliver their products to customers within the minimum time.

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 Figure: Performance objectives of operations strategy

Government organizations incorporate technologies. Initiating emergency numbers such as 999,

106, 16263 etc. provide instant services to people. Some studies found that it has improved the
quality of government services in recent times. Telecommunication companies such as Robi and
GP give compensation for any call drop in the network that enhances their service reliability. Many
companies redefined their work process. Nowadays, they offer work opportunity in multiple shifts.

Performance Objectives
Performance Objectives
Quality
Speed
Dependability
Flexibility
Cost

4.4. Operations strategy challenges in Bangladesh

Most of the businesses have a fairly clear and understandable idea of the strategy and mission of
the organizations. Businesses encounter numerous issues and challenges due to inconsistent
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alignment between organizations and its different parts. Therefore, understanding the challenges
can facilitate us to identify the ways to overcome them. This study tries to address some common
challenges in operations strategy that most of the companies encounter.

Globalization is perhaps the most common challenges encountered by our domestic businesses.
Globalization allows an easy interaction as well as integration among the people, companies,
government and other institutions of different nations. It is often driven by the advancement in
information technologies, transportation technology and a reduction in trade barriers. Operations
manager receives competition from both across the street to across the world. Companies who seek
ways to compete internationally require improving quality and lower price of the products. But
faulty value chain system and current infrastructural system are key obstacles in this regard for the
businesses. There is no facility for international payment through PayPal and Skrill. Besides, there
are little local suppliers who can provide quality machinery to companies to improve product
quality. As a result, many companies require to purchase supplies and machinery from other
countries which increase the cost. Therefore, lowering the cost becomes difficult for the business
to compete internationally. Akij purchases its machinery from Germany, Walton outsources parts
of its products from China, and healthcare sector purchases the latest diagnostic and treatment
equipment from the U.S and Germany (Islam & Sobhani, 2010). If there were adequate local
suppliers of these, businesses can lower prices for their products and services.

The practice of ethical conduct is also a major challenge in operations strategy implementation.
Organizations should consider the potential effects of new technologies, defective services, and
business deals on the safety of people and the sustainability of the environment. For example,
many pharmaceutical companies sell poor medicines that aren’t curing diseases which sometimes
appear to be fatal for the people. Pran was accused of mixing chemicals in their food products
which are harmful to us. Besides, the textile and automobile industry is posing a great threat to the
environment. There are plenty of examples can be found regarding ethical conduct. Operations
strategy regarding the compliance of ethical conduct is challenging. The use of sustainable energy,
recycling of wastage, energy efficient equipment, etc. can increase the operational cost that can be
the result of failure to achieve cost efficiency.

Aside these, there were some other challenges found in Bangladesh while implementing operations
strategy by different business organizations.

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 Common Challenges to Operations Strategy
 Infrastructural
 Poor Organizational Leadership
 Faulty Value Chain System
 Political Instability
 Lack of corporate environment
 Inability to solve unsystematic risk factors
 Environment

5. Conclusion and Recommendation

The success of a business doesn’t come from producing and selling products. It depends on lots of
things and efforts. Operations management is perhaps one of the most significant additions to the
business environment. Many successful businesses are surviving and competing in the market
through effective operations strategy. In Bangladesh, operations management is being practised

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since decades. However, the popularity of this didn’t grow that much compared to other companies
in the international business environment. This study has made a thorough investigation into the
current scenario of operations strategy in Bangladesh since 2000. It has identified common
operations management elements that drive operations manager to design and implement
operations strategy. This study has also identified common operations strategy practices in some
popular companies of the country. It has been seen that they used numerous techniques of
operations strategies in which some are outdated in the current scenario. In addition, the challenges
identified were crucial to developing a new path towards operations strategy in Bangladesh.

Recommendation

Some new techniques and methods should be introduced in operations management practice of
Bangladesh. In this regard, important factors that work as an obstacle to the creation of a congenial
atmosphere for the success of operations strategy should be identified and removed at the very
beginning phase. The partnership between the public and private companies should be encouraged
and developed in order to attain business processes such as product design, specification, capacity
planning, aggregate planning, improving supply chain, reengineering, introducing just in time
service, bringing efficiency in the inventory management, and so on. New techniques ensure that
the work focuses the efforts of making incremental changes of working. On the other hand, new
techniques should have the ability to encourage managers to undertake any decisions according to
the specific circumstances of the business. Besides, operations strategy should encourage creativity
in operational activities of the business.

6. References
 Bayraktar, E., Jothishankar, M.C., Tatoglu, E. and Wu, T., 2007. Evolution of operations
management: past, present and future. Management Research News, 30(11), pp.843-871.
 Brown, S. and Bessant, J., 2013. Strategic operations management. Routledge.
 Chase, R.B. and Prentis, E.L., 1987. Operations management: A field rediscovered. Journal
of Management, 13(2), pp.351-366.

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 Chopra, S., Lovejoy, W. and Yano, C., 2004. Five decades of operations management and
the prospects ahead. Management Science, 50(1), pp.8-14.
 Dess, G.G., Lumpkin, G.T. and Eisner, A.B., 2003. Strategic management: Creating
competitive advantages. Burr Ridge, IL: McGraw-Hill.
 Dornier, P.P., Ernst, R., Fender, M. and Kouvelis, P., 2008. Global operations and logistics:
Text and cases. John Wiley & Sons.
 Ferdousi, F., 2009. An investigation of manufacturing performance improvement through
lean production: A study on Bangladeshi garment firms. International Journal of Business
and Management, 4(9), p.106.
 Filippini, R., 1997. Operations management research: some reflections on evolution, models
and empirical studies in OM. International Journal of Operations & Production
Management, 17(7), pp.655-670.
 Gorm Rytter, N., Boer, H. and Koch, C., 2007. Conceptualizing operations strategy
processes. International Journal of Operations & Production Management, 27(10), pp.1093-
1114.
 Harry, M. and Schroeder, R., 2000. The Breakthrough Management Strategy Revolutionizing
the World’s Top Corporations.
 Hayes, R., 2006. Operations, strategy, and technology: pursuing the competitive
edge. Strategic Direction, 22(7).
 Heizer, J., 2006. Principles of Operations Management: Student Value Edition. Prentice
Hall.
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manufacturing industry in Bangladesh. Business Review, 5(2), pp.127-147.
 Islam, M.A., Khan, M.A., Obaidullah, A.Z.M. and Alam, M.S., 2011. Effect of entrepreneur
and firm characteristics on the business success of small and medium enterprises (SMEs) in
Bangladesh. International Journal of Business and Management, 6(3), p.289.
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 Nahmias, S. and Cheng, Y., 2009. Production and operations analysis (Vol. 6). New York:
McGraw-hill.

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 Roth, A.V., 2007. Applications of empirical science in manufacturing and service
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 Skinner, W., 1985. The taming of lions: How manufacturing leadership evolved. The Uneasy
Alliance: Managing the Productivity-Technology Dilemma. KB Clark, RH Hayes and C.
Lorenz.
 Slack, N. and Lewis, M., 2002. Operations strategy. Pearson Education.
 Ward, P.T., McCreery, J.K., Ritzman, L.P. and Sharma, D., 1998. Competitive priorities in
operations management. Decision Sciences, 29(4), pp.1035-1046.
 Wright, C.M. and Mechling, G., 2002. The importance of operations management problems
in service organizations. Omega, 30(2), pp.77-87.
 Yang, C.L., Hsu, T.S. and Ching, C.Y., 2002. Integrating the thinking process into the
product design chain. Journal of Industrial Technology, 18(2), pp.2-6.

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