PGP-18-234 Submission – 6: Operations Strategy Varun Singh

Q1. How can TQM be adopted as an operations strategy?

TQM is an effective system for integrating the quality development, quality maintenance and
quality improvement efforts for the various groups in an organization so as to enable
production and service at the most economical levels which will allow for full customer
satisfaction. TQM puts quality the heart of everything done by an operation.
The following are the key elements that TQM stresses upon
a) Examining all costs that are related to quality, especially failure costs
b) Getting things ‘right first time’, that is, designing-in quality rather than inspecting in it
c) Developing the systems and procedures that support improvement
d) Meeting the needs and expectations of the customers
e) Covering all parts of the organization
f) Including every person in the organization

The following table provides various TQM elements in the four operations strategy decision
categories:

Q2. What is the role played by ‘Vision’ in strategy formulation?

Vision is a goal that the organization desires to achieve in the future. Strategy is a long term,
large scale plan of how to achieve the vision set.
A vision is an over-riding idea of what the organization should be. Often it reflects the
dream of the founder or leader. Your company's vision could be, for example, to be "the
largest retailer of apparels in India," "the maker of the finest chocolate bars in New York," or
"the management consultant of choice for non-profit organizations in the Southwest." A
vision must be sufficiently clear and concise that everyone in the organization understands it
and can buy into it with passion.
Strategy is one or more plans that will be used to achieve the vision. To be "the largest
retailer of apparels in India" you might have to decide whether it is a better strategy for you
to buy other retailers, try to grow a single retailer or a combination of both. A strategy looks
PGP-18-234 Submission – 6: Operations Strategy Varun Singh

inward at the organization, but it also looks outward at the competition and at the
environment and business climate.

Q3. Can one formulate a strategy without a Vision? What would be the
consequences?
Strategy cannot be formulated without a vision. This is because strategy is a sequence of
actions or plans which are set towards achieving a mission. Take an example of a football
match. Putting the ball into the goal post is the vision and all moves are strategies developed
towards achieving it. Without a goal post, strategy on how to play cannot be developed. If
there is a strategy without a vision, it will be haphazard and will not lead to anything
profitable.

Q4. How is the marketing strategy of a company related to the

operations strategy?
While marketing strategy is a plan of action designed to promote and sell a product or a
service, operations strategy concentrate on the manufacturing and supply chain phase of the
product. Marketing strategy is more about making the product visible to the customer and
take it to them psychologically whereas operations strategy is about the physical aspect of the
product. Operations strategy is mainly concerned with the cost part of the profit, marketing
strategy generates customers and hence revenue.

Q5. What is the connection between capital and operations budgeting

and operations strategy?
An operational budget is a detailed projection of the company's revenues and expenses for
the upcoming fiscal year. These budgets record the expected cash flows from the firm's
buying and selling activities and their effects on the income statement. Operational budgets
generally cover one fiscal year.

Future needs for purchases of fixed assets are incorporated into a capital budget. These
budgets identify the assets needed, the sources of funding and the expected returns. Capital
budgets affect changes on the long-term assets portion of the balance sheet.

Both budgets have connections with operations strategy. As the operations strategy involves
the decision of purchase of new equipment, for example, capital budgeting is to be done
accordingly.