An effective operations management effort must have a mission so it knows where it is going and a strategy so it knows how to get there. Achieving Competitive Advantage through Operations in a global business context is a process that includes setting the mission and various strategic decisions.
Operations Strategy Development
Beginning with SWOT analyses, organizations position themselves, through their strategy, to have a competitive advantage. A SWOT analysis is a formal review of internal strengths and weaknesses and external opportunities and threats.
Key Success Factors and Core Competencies:
A successful strategy requires determining the firm’s key success factors and core competencies. Key success factors (KSFs) are those activities that are necessary for a firm to achieve its goals.
Core competencies are the set of unique skills, talents, and capabilities that a firm does at a world-class standard.
The process of developing operations strategy
The process of developing operations strategy includes the 1) setting of corporate mission, 2) business strategy, 3) product and service plans, 4) competitive priorities, and 5) finalizing operations strategy
1) A corporate mission is a set of long-range goals unique to each organization and includes statements about the kind of business the company wants to be in, who its customers are, its basic beliefs about business, and its goals of survival, growth, and profitability.
2) A business strategy is a long-range game plan of an organization and provides a road map of how to achieve the corporate mission. These strategies are embodied in the company's business plan, which includes a plan for each functional area
3) A
Product and service strategy is a long-range game plan for the production
of a company’s products/services and provides a road map for what the
production or operations managers
must-do if business strategies are to be achieved.
Operations strategies include decisions on such issues as
what new products or services must be developed and when they must be introduced into production, what new facilities are
required and when they
are needed.
4) Competitive advantage implies the creation of a system that has a unique advantage over competitors. The idea is to create customer value in an efficient and sustainable way.
1. Competing on Differentiation: Differentiation is concerned with providing uniqueness. Differentiation should be thought of as going beyond both physical characteristics and service attributes to encompass everything about the product or service that influences the value that the customers derive from it.
2. Competing on Cost: It means achieving maximum value, as perceived by the customer; A low-cost strategy does not imply low value or low quality.
3. Competing on Response: response includes the entire range of values related to timely product development and delivery, as well as reliable scheduling and flexible performance. Flexible response may be thought of as the ability to match changes in a marketplace where design innovations and volumes fluctuate substantially
5) The Operations Strategy includes the following
elements:
(1) Positioning the production system
(2) product/service plans
(3) outsourcing plans
(4) process and technology plans
(5) strategic allocation of resources
(6) facility plans, capacity, location and layout.
References:
1. Gaither, N., & Frazier, G. (1999). Production and operations management.
2. Heizer, J. (2016). Operations management, 11/e. Pearson Education India.
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