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Many factors shape and form the operations strategy of a corporation, for example, the ever increasing need for globalizing products and operations and thus reducing the unit cost, creating a technology leadership position, introducing new inventions, taking advantage of mass customization, using supplier partnering, and looking for strategic sourcing solutions. All of these factors require an external or market-based orientation; these are the changes that take place in the external environment of the company. Traditionally, strategic decisions were thought of as "big decisions" made by general managers. However, big strategic decisions may not be the only source of competitive advantage for the firm. Jay Barney wrote, "Recent work on lean manufacturing suggests that it is the simultaneous combination of several factors that enables a manufacturing facility to be both very high quality and very low cost. This complicated system of numerous interrelated, mutually supporting small decisions is difficult to describe, and even more difficult to imitate, and thus a source of sustained competitive advantage." Barney contrasted big and small decisions further, "Recognizing that small decisions may be more important for understanding competitive advantages than big decisions suggests that the study of strategy implementationthe process by which big decisions are translated into operational realitymay be more important for understanding competitive advantage than the study of strategy formulation." The strategy expressed as a combination of a few big and hundreds of small decisions leads to setting up competitive priorities for improving operational practices through investments in various programs. These competitive priorities place different and diverse demands on manufacturing. These demands, sometimes called manufacturing tasks, can be organized into three distinctly different groups: product-related demands, delivery-related demands, and cost demands. The emphasis given to these priorities and the state of the organization determine the nature and level of investments deemed necessary to implement the operations strategy. These investments in operational practices are expected to lead to better operational performance, as measured and evaluated internally using indicators like reject rates in the manufacturing process, production schedule fulfillment, and others. Through investments firms create and acquire resources that can isolate them from negative market influences and can serve as a source of competitive advantage for them. These investments can be made in tangible assets
(e.g., machinery and capital equipment) and intangible assets (e.g., brand names and the skills of individual employees). A distinction has to be made between investments aimed at creating resources and those aimed at creating capabilities. Few resources on their own are productive. Productive activity requires the cooperation and coordination of teams of resources. An operational capability is the capacity for a team of resources to perform some task or activity. While resources are the source of a firm's capabilities, capabilities are the main source of its competitive advantage. Capabilities are not evaluated in themselves, and they cannot be thought of as absolute values. They have to be evaluated relative to the capabilities of competitors. This is the reason for distinguishing between competitiveness dimensions (like the 3 Ps from the marketing mix: price, place, and product) and capability-based dimensions (like cost-timequality measures). They show the two sides of the same coin: the internal capabilities and their evaluation in the market.
general trends exist across markets, these may not be stable over time. For example, in the late 1990s delivery speed and product customization were frequent order winners, while product quality and price, which previously were frequent order winners, tended to be order qualifiers. Hence, firms need to develop different strategies to support different marketing needs, and these strategies will change over time. Also, since customers' stated needs do not always reflect their buying habits, Hill recommends that firms study how customers behave, not what they say. When a firm's perception of order winners and qualifiers matches the customer's perception of the same, there exists a "fit" between the two perspectives. When a fit exists one would expect a positive sales performance. Unfortunately, research by Sven Horte and Hakan Ylinenpaa, published in the International Journal of Operations and Production Management, found that for many firms a substantial gap existed between managers' and customers' opinions on why they did business together. The researchers found that favorable sales performance resulted when there was a good fit between a firm's perception of the strengths of a product and customer perception of the product. Conversely, when firms with high opinions about their competitive strengths had customers who did not share this opinion, sales performance was negative.
product, the process, and the organization become more standardized. The production process moves closer to the continuous flow end of the process spectrum. When this happens, both the product and the process become increasingly vulnerable to the introduction of new offerings of similar function (i.e., substitute products) by other producers. Then, the company has to decide when and how to abandon the product and process that they perfected and in which they invested so much. As the product moves through its life cycle, the requirements for the product and for the production process change. During the early part of the life cycle a production facility with high flexibility (i.e., a job shop) can generate order winners such as customization. For a mature product a dedicated facility (i.e., a flow shop) can produce high quality and low cost, which are the order winners for many, but not all, mature products. Terry Hill noted that different product characteristics require different production processes, and without communication between marketing, which identifies the order winners and qualifiers, and operations, which develops the operational capabilities to deliver these characteristics, market success cannot be achieved. Hill developed a toolproduct profilingto ascertain a certain level of fit between process choices and the order-winning criteria of the products. The purpose of profiling is to provide comparison between product characteristics required in the market and the process characteristics used to manufacture the products and make the necessary adjustments.
Read more: Order-Winning and Order-Qualifying Criteria - strategy, organization, system, advantages, school, model, company, business, competitiveness http://www.referenceforbusiness.com/management/Ob-Or/Order-Winningand-Order-Qualifying-Criteria.html#b#ixzz1dQ0R2JDE