Operation Strategy Competitive Advantage

Operations Strategy
Unified, comprehensive and integrated plan designed to ensure that the basic objectives of the enterprise are achieved
. . . . William F Glueck

Components of Strategic Management

Define mission and objectives of an organisation Scanning the environment Decide organisational strategy after SWOT analysis Implementing the chosen strategy

Operations Strategy
An action plan for appropriate use of 5Ms to produce goods / Sift Marketing Pvt Ltd service as per organisational goals & objectives 2

Goals of any Operations Strategy

Improved Quality
o
o o

Technology improvement Reduced problem generators Training & development

Minimising response time Better communication Reduced unwanted activities, improved productivity Improvement in production-delivery value chain Better product designs Reduced wastage
3

Improved Responsiveness
o o o

Reduced Cost
o o o Sift Marketing Pvt Ltd

Operations Priorities
Cost Product quality Reliability Coping with changes in demand Delivery speed Delivery reliability Range of products New product introduction speed

Sift Marketing Pvt Ltd

Operations Priorities contd

Cost
o
o

o o o

Market very large Product commodity-like; customers cannot distinguish products of one firm from those of another Competition is fierce Failure rate high After all, there can only be one low-cost producer, which usually establishes the selling price Goal in establishing the proper level of product quality is to focus on the requirement of customers (e.g. childs first two wheeled bicycle v/s bicycle of a worldclass cyclist) After sales support 5

Product quality
o

Sift Marketing Pvt Ltd

Operations Priorities contd

Reliability
o
o o

Error-free products Product specifications must match the intended use Adherence to tolerances essential; process quality is critical

Coping with changes in demand

o

o o o

Ability to effectively deal with dynamic market demand over the long term Investment in new technology Investment in capacity Buffer capacity

Sift Marketing Pvt Ltd

Operations Priorities contd

Delivery speed
o
o o o

Ability to deliver more quickly than competitors Better prices possible More orders possible Function of inventory, rework, distance traveled, multi-skilled operators, set-up times, downtimes, etc.

Delivery reliability
o

o o

Ability of the firm to supply on or before a promised delivery due date; credibility issue Penalties avoided Cancellations avoided
7

Sift Marketing Pvt Ltd

Operations Priorities contd

Range of products
o
o o

Customisation Different market segments addressed Cope with changes in demand

New product introduction speed

o o

First entrant advantage Organisation Structures (more than one superior)

Sift Marketing Pvt Ltd