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Operations Strategy: Driving Business Excellence

Understand the role of operations strategy in business improvement, identify performance objectives, and learn about key influences on objectives. Explore the stages of operations strategy implementation and the relative importance of different objectives to the operation. Consider the influence of customers, competitors, and the stage of products in the life cycle. Discover the performance objectives of cost, quality, speed, dependability, and flexibility, and the impetus for strategy change.

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Operations Strategy: Driving Business Excellence

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  1. Chapter 2 Service Operations Strategy

  2. Learning points • To understand the role of operations strategy in business improvement • To identify performance objectives for operations function • To understand key influences on objectives

  3. Role of the operations function Supportive of business strategy Implementing business strategy Driving business strategy (proactive)

  4. Four-stage model Stage 1 - Internal neutrality Stage 2 - External neutrality Stage 3 - Internally supportive Stage 4 - Externally supportive Hayes & Wheelwright

  5. Relative importance of each objective to the operation Influence of customers - what are order-winning, qualifying and less important factors to them Influence of competitors - how does operation react to changes in way competitors behave Stage of products in life cycle - are services at introduction, growth, maturity or decline stage

  6. Competitive factors Low price High quality Fast delivery Reliable delivery Innovative products & services Wide range of products & services Ability to change timing of quantity of products & services Performance objectives Cost Quality Speed Dependability Flexibility (product/service) Flexibility (mix) Flexibility (volume and/or delivery) Competitive factors > Performance objectives

  7. 5 Performance Objectives Quality Speed Dependability Flexibility Cost

  8. Impetus for Strategy Change • Changes in the organization • Stages in the product life cycle • Changes in the environment

  9. Summary • Operations strategy can be passive/reactive to the overall business strategy or can seek to drive business excellence • Key performance objectives involve prioritizing in terms of the factors most important to your customer segment

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