Session-4,5,6

1. Session-4,5,6 ECE AND EEE

2. Strategic Decisions

3. Operation Strategy: • Operation strategy is concerned with setting broad policies and plans for using the resources of a firm to best support its long term competitive strategy.

4. Operations Strategy Strategy Process Example Customer Needs More Product Corporate Strategy Increase Org. Size Operations Strategy Increase Production Capacity Decisions on Processes and Infrastructure Build New Factory

5. Competitive Dimensions • Cost or Price • Quality • Delivery Speed • Delivery Reliability • Coping with Changes in Demand • Flexibility • New Product Introduction Speed

6. Trade-off • To deal with the trade off existing among the various dimensions - • Skinner suggests the companies to go for concepts like- • Plant Within a Plant • Straddling

7. PLANT WITHIN A PLANT: a concept in which different locations within a facility are dedicated to different product lines. Each location is operated according to its own strategy to minimize the confusion associated with shifting from one type of strategy to another. • STRADDLING: occurs when a company seeks to match what a competitor is doing by adding new features, services, or technologies to existing activities

8. Order qualifiers and Order Winners • Order qualifiers are the basic criteria that permit the firms products to be considered as candidates for purchase by customers • Ex: A brand name car • Order Winners are the criteria that differentiates the products and services of one firm from another • Ex: Repair services, warranty, assistance etc.

9. Norton and Kaplan:Strategy Design Process Strategy Map What it is about! Financial Perspective Improve Shareholder Value Customer Perspective Customer Value Proposition Internal Perspective Build-Increase-Achieve Learning and Growth Perspective A Motivated and Prepared Workforce

10. Kaplan and Norton’s Generic Strategy Map

11. Kaplan and Norton’s Generic Strategy Map In the Kaplan and Norton’s Generic Strategy Map, under the Financial Perspective, the Productivity Strategy is generally made up from two components: • Improve cost structure: Lower direct and indirect costs • Increase asset utilization: Reduce working and fixed capital In the Kaplan and Norton’s Generic Strategy Map, under the Financial Perspective, the Revenue Growth Strategy is generally made up from two components: • Build the franchise: Develop new sources of revenue • Increase customer value: Work with existing customers to expandrelationships with company

12. Kaplan and Norton’s Generic Strategy Map (Cont.) In the Kaplan and Norton’s Generic Strategy Map, under the Customer Perspective, there are three ways suggested as means of differentiating a company from others in a marketplace: • Product leadership • Customer intimacy • Operational excellence In the Kaplan and Norton’s Generic Strategy Map, under the Learning and Growth Perspective, there are three principle categories of intangible assets needed for learning: • Strategic competencies • Strategic technologies • Climate for action

13. Strategic Management Involves Five Steps Step1 : Select the corporate mission and major corporate goals. Step2: Analyze the opportunities and threats or constraints that exist in the external environment. Also analyze the strengths and weaknesses that exist in internal environment. Step3: Formulate strategies that will match the organization's strengths & weaknesses with the environment's threats and opportunities. Step 4: Implement the strategies. Step5: Evaluate and control activities to ensure that the organization's objectives are achieved.

14. Operation Strategy in Manufacturing • Main objectives are- • To translate required competitive dimension (obtained from marketing) into specific performance requirements for operation • To make the plans necessary to ensure that operation capabilities are sufficient to accomplish them

15. Steps in Developing a Manufacturing Strategy- • 1. Segment the market according to the product group • 2. Identify product requirements, demand patterns, and profit margins of each group • 3. Determine order qualifiers and winners for each group • 4. Convert order winners into specific performance requirements

16. Operation Strategy in Services • What Services are- • Services include high degree customer contact. • Services are produced and consumed at the same time. • Services varies from customer to customer • Uniformity is output is low • Measuring the service is a difficult task

17. Service Strategy: Focus and Advantage • Treatment of the customer • Speed and convenience of service delivery • Price • Variety • Quality of the tangible goods • Unique skills that constitute the service offering

18. Productivity: • Productivity is a common measure on how well resources are being used. In the broadest sense, it can be defined as the following ratio: • Output/Input • Output: goods and services • Input: material, labor, energy.

19. Elements of Production and Operation Strategy Operations strategy comprises six components : • Positioning the production system. • Focus of factories and service facilities, • Product/Service design and development, • Technology selection and process development, • Allocation of resources to strategic alternatives, and • Facility planning.