Production Operations

Management

Operations Strategy
U. Akinc

Bus 241 1
 Linking
Corporate
strategy
with
operations
strategy

Bus 241 2
 Operations Strategy
Corporate Strategy

Product Plans

Competitive Priorities

Positioning/Operations Strategy

Bus 241 3
 Corporate Strategy
Mission
Relating the Organizations Efforts to its Long
Term Future.
What Business are we in?
Who are Our Customers?
What are our Concepts and Beliefs?
How Do We Measure Performance
Growth?
Profits?
Market Share?
Innovation?

Bus 241 4
 Corporate Strategy
Environment:
Scanning the Environment for Opportunities
and Threats:
Competition
Market
Economic Trends
Social and Political Changes

Bus 241 5
 Corporate Strategy
Distinct Competencies:
Organizations Unique Strengths-- those that
are difficult for others to duplicate
Examples:
Competent Workforce
Advantageous Location
Innovative Capability
Technology
Bus 241 6
 Operations Strategy
Corporate Strategy

Product Plans

Competitive Priorities

Positioning/ Operations Strategy

Bus 241 7
 Product Plans
Strategic Product Line Related Choices to Leverage
Companys Distinct Competencies
The market(s) served
Low End
High End
Both
Scope of Product Line
Wide
Narrow
Availability
Bus 241 8
 Product Life Cycles

Pressures to Introduce New Products:

Competition
Expired Patents
Technological Innovation
Bus 241 9
 Product Plans
A. Enter Early and Exit Late
From Introduction to Decline

B. Enter Early and Exit Early

From Introduction to Maturity

C. Enter Late and Exit Late

From Maturity to Decline

Bus 241 10
 Operations Strategy
Corporate Strategy

Product Plans

Competitive Priorities

Positioning/Operations Strategy

Bus 241 11
 Competitive Priorities
Companies Compete on the Basis of:
Quality
Performance
Conformance
Service

Price
Time
Introduction
Delivery

Flexibility
Volume
Product Mix
Bus 241 12
 Operations Strategy
Corporate Strategy

Product Plans

Competitive Priorities

Positioning/Operations Strategy

Bus 241 13
A. Structure:
Design & Creation of the Transformation
System

Vertical Integration
Technology
Scale of Process/Capacity
Location/Layout
Positioning Strategy
Bus 241 14
 Positioning Trade off

High

Process Focus
Customization

Project
Job Shop

Intermediate
Focus
Batch

Product Focus
Line
None Continuous

Low

Low Volume Moderate High

One-of-a-kind Volumes Volume

Bus 241 15
 Positioning the Process
ProductFocused (Organizing the Productive
resources around the Product)
High Volume
Limited variety Products/Services
Line Flows
Special Purpose Equipment
Low Labor Skills
Capital intensive/ High Automation
Efficient

Bus 241 16
 Positioning Strategy(cont.)
Process Focused (Organizing the Productive
Resources According to Capability)
Low Volume
Wide Variety /High Customization
Not as Efficient/ Highly Flexible
General Purpose Equipment
High Skilled and Highly Trained Workforce
Jumbled and Complex Work Flow

Bus 241 17
B. Infra-Structure
(The use of the Transformation System)

1. Work-Force policies
2. Quality Policy
3. Operating System

Bus 241 18