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‘What is meant by strategy?

 Strategy is the mechanism/process by which an
organisation/business make decisions on how to utilize their
resources

‘ What are the basic factors that determine organisationǯs

strategy?
 Vision
 Mission
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‘ What is meant by Vision of an Organisation?
 Defines the desired or intended future state of an organization or
enterprise in terms of its fundamental objective and/or strategic
direction.
 Vision is a long term view
 It is a source of inspiration.
 For example a charity working with the poor might have a vision
statement which read "A world without poverty"
6
   

o provide a safe, all weather, cost effective, and

environment friendly travel solution for the
Indian/Europian/American families
M


‘ What is meant by Mission of an Organisation?
Defines the fundamental purpose of an organization or an
enterprise, basically describing why it exists and what it does to
achieve its Vision.

‘ What was the DzMissiondz that came out of the Vision of

Ratanata?
ata Nano
 Vision should significantly stretch the resources and capabilities
of the farm
 Vision should inspire people in the organization to achieve
things they never thought possible
 Vision should unite people in the organization toward the
pursuit of one common goal
6

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‘ Does Vision and Mission means the same?

 Both are related

 he vision is more broad and future oriented Ȃ the goal on the
horizon
 he mission is more focused Ȃ how you will get to the horizon
w6
 M

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‘ Mc Donalds
 he vision is to be the worldǯs best quick service restaurant
experience. Being the best means providing outstanding quality,
service, cleanliness, and value, so that we make every customer in
every restaurant smile

‘ PVR Cinemas
 Our long-term vision is to remain Indiaǯs most premium and most
preferred Retail Entertainment Company. o achieve this vision, we
continue to provide the highest exhibition standards at our cinemas
besides increasing the number of cinemas under operation on a
pan India basis. We further look forward to bringing allied retail
entertainment concepts and complete the entertainment
experience for our customers.


w
 M
Vision

Mission

Business
Strategy

Operations Marketing
& Supply Finance
Chain HR
Strategy I
w
 M
6
Our long-term vision is to remain Indiaǯs most
premium and most preferred Retail Entertainment
Company.

 We continue to provide the highest exhibition standards at our cinemas besides

increasing the number of cinemas under operation on a pan India basis.
 We further look forward to bringing allied retail entertainment concepts and
complete the entertainment experience for our customers.

 arget customers are high income families, individuals, corporates

 o expand into 25 cities in the south India by 2010
 o bring the latest in entertainment technology
 o provide customized solution to different customer segment

Operational Strategy
 PVR uses Aircooled environment instead of Air Conditioning in ier
II cities
 PVR provides samosas instead of hotdogs in ier II cities

Ô


w
 
‘ he strategy that identifies the firmǯs targeted customers and sets
time frames and performance objectives for the business.

‘ Strategy determines the utilization of structural and infrastructural

elements of the organisation

‘ Structural elements are tangible resources like buildings, equipment.

‘ Infrastructural elements are the people, policies, decision rules,

organisation structure, organisation values.
×  w
 
‘ Functional strategy translates a business strategy into specific actions
for the functional areas such as marketing, HR and Finance.

‘ Functional strategies should align with the overall business strategy

and with each other.

‘ Eg., Marketing Strategy: PVR Cinemas has tied up with Facebook,

Visa Platinum and Amex Card.
%
 
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‘ Operations and supply chain strategy is a functional strategy that
indicates how structural and infrastructural elements within the
operations and supply chain areas will be acquired and developed to
support the overall business strategy.

‘ Objective
 o determine the right mix of structural and infrastructural
elements based on the clear understanding of the performance
dimensions valued by customers and the trade-off involved
 he Ops & Supply Chain strategy should be aligned to business
strategy
 o support the development of core competency of ops and
supply chain

  
‘ Core competency are organizational strengths or abilities, developed
over a period of time, that customers find valuable and competitors
find difficult or even impossible to copy.

‘ Amul Ȃ Core competency is in sourcing high quality milk from

cooperative at low cost

‘ Nokia Ȃ Core competency is in faster new product development

‘ Dell computers Ȃ Core competency is in supply chain network

‘ What is the core competency of Maruti Suzuki?

‘ What is the core competency of Microsoft?

‘ What is the core competency of Intel?

%
 
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‘ Engineer-to-Order
 means customer Ǯs specifications require unique engineering
design or significant customization.
 usually customer is highly involved in the product design
 Inventory will not normally be purchased until needed by
manufacturing.
 Delivery lead time is long because it includes not only purchase
lead time, but also design lead time.

‘ Example
 Ship building
 Aircraft
 Luxury goods
%
 
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‘ Make-to-Order
 means that the manufacturer does not start to make the product
until a customerǯs order is received.
 usually made from standard items but may include custom-
designed components as well.
 Delivery lead time is reduced because there is little design time
required and inventory is held as raw material

‘ Example
 Furniture
 Restaurant
%
 
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‘ Assemble-to-order
 means that the product is made from standard components that
the manufacturer can inventory and assemble according to a
customer order.
 Delivery lead time is reduced further because there is no design
time needed
 Inventory is held ready for assembly

‘ Example
 Luxury cars
 Desktop computers/laptops
 Restaurant
%
 
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‘ Make-to-stock
 means the supplier manufactures the goods and sells from
finished goods inventory.
 Delivery lead time is shortest

‘ Example
 Cars
 FMCG
 Consumer Electronics
À %
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‘ Structural Elements
 Capacity
 Outsource/Sub-contracting
 Warehouses
 Distribution Centres
 echnology
 ransportation
 Computer Systems

‘ Infrastructural Elements
Organisation structure, manpower
 Forecasting techniques
 Supplier selection process, criteria


 



‘ Duality

‘ ime

‘ Flexibility

‘ Cost
D  
‘ Duality
 is defined as the characteristics of a product or service that bear
on its ability to satisfy stated or implied needs.

‘ Sub dimension of Duality

 Performance Duality:
What are the basic operating characteristics of the product or
service? Eg: comfartable ride in Honda City car
 Conformance Duality:
Was the product or service performed to specifications? Eg
Honda is expected to give mileage of 15kmpl, maintenance free
Reliability Duality:
Will the product work for a long time without failing or
requiring maintanence? Eg: Chinese goods are known for low
reliability
 
‘ ime
 has two basic characteristics: speed and reliability.
‘ Sub dimension of ime
 Delivery Speed:
How quickly the operations or supply chain function can fulfill a
need, once it has been identified. Eg., Dominos Pizza in 30 mins
 Delivery Reliability:
Ability to deliver products and services when promised.
Measured by percentage of orders delivered by promised time
very crucial for supply chain of perishable items like food, meat,
flowers
reliability in terms of supply of correct order, no shortage/excess
 Delivery window is the acceptable time range in which deliveries can
be made.

‘ A firm can have long lead times and still have high degree of delivery
reliability. Public Provident Fund versus Investment in private banks
×   
‘ Flexibility
 How quickly operations and supply chains can respond to the
unique needs of customers.

‘ Sub dimension of Flexibility

 Mix Flexibility:
ability to produce wide range of products or service Eg.,
Dominos Pizza, Pizza Hut, Subway, ata Motors, Maruti
 Changeover Flexibility:
ability to provide new product with minimal delay
 Volume Flexibility:
ability to produce what ever volume the customer needs


‘ Direct Cost like Raw Material, machine, people

‘ Indirect Cost like administration, marketing

‘ Overheads like water, security


 %

 



‘ Can we have superior quality of product at low price?

‘ We will have to trade-off the one performance dimension with the

other based on the business strategy, target customer

‘ KingFisher & KingFisher Red Airlines - what is the difference?

x
   
  


‘Value Index
Performance Value Index

Importance in a scale
d
  of (1-5) Indica V2 Honda Jazz Indica V2 Honda Jazz

3 2 5 6 15
Performance Duality (Mileage,
Comfort, Maintanence)
Delivery Speed 1 5 5 5 5

After-Sales Support 2 3 4 6 8

Cost 4 5 2 20 8

37 36

As per the Value Index arrived, we will select Indica. But we will
have to go beyond the cumulative figure many times as it may
mislead us many times
%

D   

%

 

‘ Order Dualifiers are performance dimensions on which

customers expect a minimum level of performance.
 Superior performance on an order qualifier will not, by
itself give a company a competitive advantage
 Example: Duality of the product

‘ Order Winners are performance dimensions that

differentiate a companyǯs products and services from
competitiors
 Cost, delivery speed, flexibility
 Example: People go to Big Bazaar to buy the branded
goods are they provide the same at the lowest price



r Case Study : Catherineǯs Confectionaries
r Ô : Introduction to Operations & Supply Chain
Management - Cecil C.Bozarth & Robert .Handfield
r Pg No : 40
M

 
r Internals 35 marks
‘ Midterm est 10 marks
‘ Case Presentation 5 marks
‘ Duiz/Assignment 20 marks

g Externals 65 marks