![5
Level Key Strategic Decisions Influences on
decision making
Corporate
Strategy
[3-5 years
ahead]
What business to be in (now & in
the future)?
What business to acquire or divest?
How to allocate financial resources?
Setting corporate values
How to manage the relationships
between businesses?
Environment:
Market, political &
social
Company
ownership:
Values, ethics
OPERATIONS STRATEGY
Levels of strategic decision making](https://image.slidesharecdn.com/operations-strategy-ppt-250112093720-9db903f7/85/operations-Strategy-in-supply-chain-process-5-320.jpg)
-operations-Strategy-in supply chain process
- 2. 2 Definition of a strategy Little agreement amongst either practitioners or academics Misleading to attempt a single definition “Operations strategy is the total pattern of decisions which shape the long term capabilities of any type of operation and their contribution to overall strategy” Slack Operations Strategy, Prentice Hall, 2002 OPERATIONS STRATEGY
- 3. 3 3 LEVELS OF STRATEGY Corporate Strategy Corporate Head Office Business Level Strategy Company A Company Β Functional Strategies Marketing Finance R & D Sales HR R & D Production Marketing Sales OPERATIONS STRATEGY
- 4. 4 EXAMPLE: 3 LEVELS OF STRATEGY Corporate Strategy BAYER S.A. Various OPERATIONS STRATEGY Business Level Strategy Pharma Pesticides Chemicals Plastics Functional Strategies Marketing Finance R & D Sales HR
- 5. 5 Level Key Strategic Decisions Influences on decision making Corporate Strategy [3-5 years ahead] What business to be in (now & in the future)? What business to acquire or divest? How to allocate financial resources? Setting corporate values How to manage the relationships between businesses? Environment: Market, political & social Company ownership: Values, ethics OPERATIONS STRATEGY Levels of strategic decision making
- 6. 6 OPERATIONS STRATEGY Corporate Strategy Often is not obvious to participants that an organization has a corporate strategy
- 7. 7 Term Definition A personal example Mission Overriding purpose in line with the values or expectations of stakeholders Be healthy and fit Vision or strategic intent Describes aspirations for the future, without specifying the means that will be used to achieve those desired ends of the organization To run the marathon Goal General statement of aim or purpose in line with the mission. Maybe qualitative Lose weight and strengthen muscles Objective Quantification (if possible) or more precise statement of the goal Lose 10 Kg by 1 September and run marathon in 2006 The Terminology of Strategy OPERATIONS STRATEGY
- 8. 8 Term Definition A personal example Core competences Resources, processes or skills which provide “competitive advantage” Proximity to a fitness centre, supportive family and friends and past experience of successful diet Strategies Long term direction Associate with a collaborative network (e.g. join running club), exercise regularly, compete in marathons locally, stick to appropriate diet The Terminology of Strategy OPERATIONS STRATEGY
- 9. 9 Term Definition A personal example Strategic architecture Combination of resources, processes and competences to put strategy into effect Specific exercise and diet regime, appropriate training facilities, etc. Control The monitoring of action steps to: Assess effectiveness of strategies and actions Modify strategies and/or actions as necessary Monitor weight, miles run and measure times: if satisfactory progress, do nothing; if not, consider other strategies and actions OPERATIONS STRATEGY
- 10. 10 List of some Customer Needs necessary to develop business strategy Low Price Ability to satisfy customer’s requirements more cost-effectively than competition Product feature /performance The extend to which a product out-performs the offerings of competition or offers more product features Quality & Reliability The extend to which customers’ expectations are satisfied or exceeded by the product or service, and continue to be satisfied After sales service The effectiveness with which customers queries or complaints are handled Customization The ability of the operations system to tailor its output to meet special customers’ requirements Rapid Innovation The ability of OS to generate and launch new products into market fast Volume Flexibility Ability to cope with abrupt market request Fast & Reliable Delivery Fast & reliable service OPERATIONS STRATEGY
- 11. 11 QUESTION Match the following order winners with the products or services from the list Products/services a. IKEA b. Rolex c. UPS d. Domino Pizza e. PC’s f. Easy Jet g. Tailor h. Toyota order winners 1. Low Price 2. Product feature /performance 3. Quality & Reliability 4. After sales service 5. Customization 6. Rapid Innovation 7. Volume Flexibility 8. Fast & Reliable Delivery OPERATIONS STRATEGY
- 12. 12 Considering Customer Needs ANSWER 1. Low Price f. Easy Jet 2. Product feature /performance b. Rolex 3. Quality & Reliability h. Toyota 4. After sales service h. TOYOTA 5. Customization g. Tailor 6. Rapid Innovation e. PC’s 7. Volume Flexibility a. IKEA 8. Fast & Reliable Delivery d. Domino Pizza, c. UPS OPERATIONS STRATEGY
- 13. 13 Contents of an operations strategy Success factors Super market Fast food Telephone services Petrol stations On-line shopping Financial services Low price Wide variety Quality Delivery Fast response Reliability OPERATIONS STRATEGY
- 14. 14 Approaches to determining operations strategy Fast food restaurants have a rather sort list on the menu. Could they extend it and still supply all items in as short a delivery period? OPERATIONS STRATEGY
- 15. 15 Approaches to determining operations strategy Trade – off (see-saw) Examples: Low Price vs. Available Variety Delivery time vs. Flexibility Quality vs. Absolute Cost Personalized attention vs. Low cost of service High quality service vs. Staff salaries Performance Objective 2 Performance Objective 1 Performance Objective 1 Performance Objective 2 One aspect of performance can be improved at the expense of others OPERATIONS STRATEGY
- 16. 16 Can you always compromise? For example in the case of airplanes we can trade off in cruising speed , passenger comfort but not in safety. Approaches to determining operations strategy Trade – off OPERATIONS STRATEGY
- 17. 17 Can you always compromise? For example in the case of airplanes we can trade off in cruising speed , passenger comfort but not in safety. Performance Objective 2 Performance Objective 1 Performance Objective 2 Performance Objective 1 Move the pivot (=> continuous improvement) Approaches to determining operations strategy Trade – off OPERATIONS STRATEGY
- 18. 18 Order Qualifiers and Winners Order qualifiers? They are the basic criteria that permit the firms products to be considered as candidates for purchase by customers. Order winners? They are the criteria that differentiates the products and services of one firm from another. OPERATIONS STRATEGY
- 19. 19 Service Breakthroughs A brand name car can be an “order qualifier” Repair services can be “order winners” Examples: Warranty, Roadside Assistance, etc. OPERATIONS STRATEGY
- 20. 20 Order Qualifiers and Order Winners Order Qualifiers and Order Winners 2-7 EXAMPLES of EXAMPLES of •Order Qualifiers and Order Qualifiers and •Order Winners? Order Winners? A company will enter in its supplier list only these suppliers that are accredited to one of the ISO 9000 quality standards. Order Qualifiers? Order Winners? OPERATIONS STRATEGY
- 21. 21 Order Qualifiers and Order Winners Order Qualifiers and Order Winners 2-7 ANSWER ANSWER OQ OQ OW OW Fast food Fast food Availability Right type of food Low cost Speed of service Perceived value for money Cleanliness Easy Jet Easy Jet Availability Convenience speed Value for money Dependability Reliability University University Range of courses Reputation Accessibility Reputation Accessibility Cost OPERATIONS STRATEGY
- 22. 22 Stage Volume slow decline rapid slow Competitive priority Order winners Product characteristics capability novelty availability quality speed cost dependability cost Competitors: few increasing many declining Customers innovators early adopters bulk of market laggards Order qualifiers reputation Price, range quality dependability Typical products OPERATIONS STRATEGY
- 23. 23 END