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Operations Strategy Overview

Operations Strategy Overview. Key Points WORKING DEFINITION OF OPERATIONS STRATEGY COMPETITIVE PRIORITIES [OBJECTIVES IN CH. 2] STRATEGIC DECISION AREAS [POLICIES IN CH. 2]. 3 Keys For Understanding Operations Strategy [TOWARD A WORKING DEFINITION OF OPERATIONS STRATEGY].

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Operations Strategy Overview

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  1. Operations Strategy Overview Key Points • WORKING DEFINITION OF OPERATIONS STRATEGY • COMPETITIVE PRIORITIES [OBJECTIVES IN CH. 2] • STRATEGIC DECISION AREAS [POLICIES IN CH. 2]

  2. 3 Keys For Understanding Operations Strategy[TOWARD A WORKING DEFINITION OF OPERATIONS STRATEGY] • Primary function of operations strategy is to guide business in forming a set of operations capabilities that enables the firm to pursue its chosen competitive strategy over the long-term • Pattern of Decisions • Consistency of Decisions  Effective strategy

  3. Capabilities-Based Competition • Strategic capabilities can result from investments in any function. Examples include outstanding marketing channels, prowess in logistics, or information processing capabilities, as well as through operations. • Capabilities are likely to produce a SUSTAINABLE advantage since capabilities are hard for competitors to duplicate. • Capabilities are built through a stream of investments over time. The capabilities themselves can be thought of as asset which can be deployed as needed. • Advantage built on product features, advertising, etc. is not necessarily sustainable since competitors can quickly imitate.

  4. Competitive Priorities[OBJECTIVES] • Cost • Quality • Delivery performance • Flexibility • Innovativeness

  5. Operations Strategy Decision Categories[POLICIES] STRUCTURAL DECISIONS – "BRICKS AND MORTAR” POLICIES • Capacity -- amount, timing, type • Facilities -- size, location, specialization • Technology -- equipment, automation, linkages • Vertical Integration -- direction, extent, balance

  6. INFRASTRUCTURAL - POLICIES & SYSTEMS • Workforce policies and practices -- skill level, wage policies, training, and employment security • New product development process • Quality systems • Production Planning/Materials Control -- sourcing policies, centralization, decision rules • Organization

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