Os Int

Amity Business School
Operations Strategy
(MBA 482 & MEL 415)
for
Class of 2011
As a courtesy to those around you
Please turn off your cell phones

and
Close your computers, except in the last row
Realm of Operations Strategy

• How should the organisation satisfy the requirements of its
customers?
• What intrinsic capabilities should the organisation try and develop
as the foundation of its long term success?
• How specialised should the organisation’s activities become?
• Should the organisation sacrifice some of its objectives in order to
excel at others?
• How big should the organisation be?
• Where should the organisation locate its resources?
• When should it expand or contract, and by how much?
Realm of Operations Strategy

• What should it do itself and what should it contract out to other
businesses?
• How should it develop relationships with other organisations?
• What type of technology should it invest in?
• How should organise the way it develops new products and
services?
• How should it bind together its resources into an organisational
structure?
• How should the organisation’s resources and processes be
improved and developed over time?
• What guiding principles should shape the way any organisation
formulates its operations strategy?
Initial Issues that come our way

1. What is ‘operations’ and why it is so important?
2. What is strategy?
3. What is operations strategy?
4. How should operations reflect overall strategy?
5. How can operations strategy learn from operational experience?
6. How do the requirements of the market influence operations
strategy?
7. How can the intrinsic capabilities of an operation’s resources
influence operations strategy?
8. What is the difference between the ‘content’ and the ‘process’ of
operations strategy?
9. What are operations strategy performance objectives?
10. What are operations strategy decision areas?
11. How do performance objectives relate to decision areas?
Operations Management : Definition

• An operations system is defined as one in which
– several activities are performed
– to transform a set of inputs into useful output
– using a transformation process.
• Operations Management is
– a systematic approach to
– address all the issues pertaining to
– the transformation process that converts some inputs
into output that are useful, and
– could fetch revenue to the operations system
Operations Management: Salient Aspects

• A systematic approach using scientific tools &
techniques and solution methodologies to analyse
problems
• Addressing several issues varying in terms of time
horizon, nature of decisions
• Addressing design & operational control issues in the
transformation process
• Focusing on keeping costs to the minimum
• Developing a set of measures to assess performance of
the system
Service – Manufacturing Continuum

Pure Product Pure Service
Ayurvedic Healing Treatment

Legal/Tax Consulting
Cyber Café – Telephone Booths
Emergency Maintenance Services
Facilities Maintenance
High quality restaurant meal
Fast food in a eat out joint
Customised durable goods
Fast moving commodities
Vending Machines
Adopted from Hill, T. (2005), Operations Management (Palgrave Macmillan), 2nd Edition, pp 14.
Service Operations: Salient Features

• Tangibility: Services are performances and
actions rather than objects, therefore having
poor tangibility
• Heterogeneity: High variability in the operation
system performance
• Simultaneous Production & Consumption:
Degree of customer contact is very high
• Perishability: Services cannot be inventoried as
in the case of manufactured products.
Manufacturing & Service

Similarities & Differences
Manufacturing Organisations Service Organisations
Differences
Physical durable product Intangible, perishable product
Output can be inventoried Output can’t be inventoried
Low customer contact High customer contact
Long response time Short response time
Regional, national, Intl. markets Local markets
Large facilities Small facilities
Capital intensive Labour intensive
Quality easily measured Quality not easily measured
Similarities
Is concerned about quality, productivity & timely response to its customers
Must make choices about capacity, location, layout
Has suppliers to deal with
Has to plan its operations, schedules and resources
Balance capacity with demand by a careful choice of resources
Has to make an estimate of demand
Operations
A key functional area in an Organisation
Finance
Operations
Marketing HRM
Operations Function Amity Business School
Linkages with other functions
Customer Layer Operations Support Layer
Ultimate Dealers Marketing Maintenance Quality

Customer Retailers
Costing Planning Tooling
Core Operations Layer Material IT Design IE
Testing Assembly
Layer of
Innovation
Fabrication Machining
Innovation Supplier Layer
Strategy Service Delivery system
Sub-contractors Suppliers
Research &
Development Other service providers
Operations Management
A systems Perspective
Forecasting
PROCESSING
Labour Process & Purchasing & Goods
OUTPUT
Product Inventory
INPUT
Design Control
Material
Capital Operations Material & Services

Planning & Capacity
Control Planning
Feedback
Quality Maintenance Process
Management Management Improvement
Operations Management : Functions
Design of Operations Operational Control of Operations
Product Design & Development Forecasting

Process Design Production Planning and Control
Quality Management Supply Chain Management
Location and Layout of facilities Maintenance Management
Capacity Planning Continuous improvement of operations
• Design issues in Operations Management lay down

overall constraints under which the operations system
functions.
• Operational Control issues focuses on optimising the
use of available resources in the short-term while
delivering goods and services as per plan.
Operations Management: Challenges & Priorities

Challenges
• Quality Management issues need greater attention
• Long lead time for order fulfilment
• Low labour productivity offsets cost advantages
Priorities
• Acquire Capabilities to tolerate product proliferation
• Relate operations system to Customer/Market
• Develop systems and procedures that promote
learning
Operations Management & Strategy

• Strategy can be defined as follows:
‘Strategy is the direction and scope of an

organisation over the long term: ideally, which
matches its resources to its changing environment,
and in particular its markets, customers or clients
so as to meet stakeholder expectations.’
16
Operations Management & Strategy

• Strategy can be seen to exist at 3 main levels of corporate,
business and functional:
– Corporate level Strategy
• At the highest or corporate level the strategy provides long-range
guidance for the whole organisation
– Business Level Strategy
• Here the concern is with the products and services that should
be offered in the market defined at the corporate level
– Functional Level Strategy
• This is where the functions of the business (e.g. operations,
marketing, finance) make long-range plans which support the
competitive advantage being pursued by the business strategy.
17
Four Stages of Judging Operations’ Contribution to Strategy
18
The stages are described as follows:

• Stage 1 Internal Neutrality
Here the operations function has very little to contribute to
competitive success and is seen as a barrier to better
competitive performance by other functions.
• Stage 2 External Neutrality
Here the operations function begins to focus on comparing
its performance with competitor organisations.
• Stage 3 Internally Supportive
Here the operations function is one of the best in their
market area and aspires to be the best in market.
• Stage 4 Externally Supportive
In stage 4 the operations function is becoming central to
strategy making and providing the foundation for future
competitive success.
19
Measuring the Contribution of Operations to Strategy:

The Performance Objectives
• The five basic operation’s performance objectives

allow the organisation to measure its operation’s
performance in achieving its strategic goals. The
performance objectives are:
- Quality
- Speed
- Dependability
- Flexibility
- Cost
20
Quality
• Quality covers both the quality of the design of
the product or service itself and the quality of the
process that delivers the product or service.
• From a customer perspective quality
characteristics include reliability, performance
and aesthetics.
• From an operations viewpoint quality is related to
how closely the product or service meets the
specification required by the design, termed the
quality of conformance.
21
Speed
• Speed is the time delay between a customer request
for a product or service and then receiving that
product or service.
• The activities triggered from a customer request for a

product or service will be dependent on whether a
make-to-stock or customer-to-order delivery system
is in place.
• The advantage of speed is that it can be used to both

reduce costs (by eliminating the costs associated
with make-to-stock systems) and reducing delivery
time leading to better customer service. 22
Dependability
Dependability refers to consistently meeting a promised
delivery time for a product or service to a customer.
• Thus an increase in delivery speed may not lead to customer
satisfaction if it is not produced in a consistent manner.
• Dependability can be measured by the percentage of
customers that receive a product or service within the
delivery time promised. In some instances it may even be
important to deliver not too quickly, but only at the time
required (for example a consignment of wet concrete for
construction!). Dependability leads to better customer service
when the customer can trust that the product or service will
be delivered when expected.
23
Flexibility
• Flexibility is the ability of the organisation to change what it does.
The following types of flexibility can be identified:
o product or service - to be able to quickly act in response to
changing customer needs with new product or service designs
o mix - to be able to provide a wide range of products or services
o volume - to be able to decrease or increase output in response
to changes in demand.
o delivery - this is the ability to react to changes in the timing of a
delivery.
• Flexibility can be measured in terms of range (the amount of the
change) and response (the speed of the change).
24
Cost
• Cost is considered to be the finance required to obtain
the inputs (i.e. transforming and transformed resources)
and manage the transformation process which produces
finished goods and services.
• If an organisation is competing on price then it is
essential that it keeps its cost base lower than the
competition. Then it will either make more profit than
rivals, if price is equal, or gain market share if price is
lower.
• Cost is also important for a strategy of providing a
product or service to a market niche, which competitors
cannot provide. Thus cost proximity (i.e. to ensure costs
are close to the market average) is important to
maximise profits and deter competitors from entering
the market. 25
The Performance Objectives from an

Internal and External Perspective
• We can categorise the benefits of excelling at the performance
objectives from an internal and external perspective.
• This is useful because even though a performance objective

may have little relevance in achieving performance that
external stakeholders, such as customers, value it may bring
benefits in improving the capability of operations from an
internal perspective.
• When we look at approaches to strategy we find that

competitiveness is not just a matter of simply improving
performance along specific external competitive dimensions,
but incorporates the development of internal capabilities that
provide specific operating advantages.
26
Operations management and strategy

requires analysis at three levels
Flow between Strategic

operations Analysis at the analysis
level of the
supply network
Flow between
processes Analysis at the
level of the
operation
Analysis at the Operation

level of the al analysis
Flow between resources process
Operations strategy is …
‘… the total pattern of decisions
…… that shape the long-term capabilities
…
… of any type of operation ...
… and their contribution to overall strategy…
… through the on-going reconciliation of market
requirements and operations resources …
… so as to achieve a sustainable fit between the two …
… whilst managing the risks of misalignment’.
How is operations strategy different

from operations management?
Operations management Operations strategy
Short-term Long-term
Timescale
e.g. capacity
decisions

Operations management Operations strategy
Micro Macro
Level of analysis
Concerned with
the macro
operation (level of
the firm)

Operations Operations strategy

management
Detailed Aggregated
Level of
‘Can we give tax ‘What is overall
aggregation
services to the business advice
(Concerned with
small business capability compared
resources at an
market in Antwerp?’ with other
aggregated level)
capabilities?’

Operations
Operations strategy
management
Concrete Philosophical
Level of ‘How do we ‘Should we develop
abstraction improve our strategic alliances
(Concerned with purchasing with suppliers?’
the conceptual) procedures?’
The sectoral scope of operations
strategy
Products or services?
Manufacturing or non-
manufacturing?
For profit or not-for-

profit?
What is operations strategy

about?
The four perspectives on operations strategy – top-

down, bottom-up, market requirements and
operations resources
Top-down
Operations
strategy should
interpret higher
level strategy
Operations
resources Market
requirements
Operations strategy
should build operations Operations strategy
capabilities should satisfy the
organisation’s markets
Operations
strategy should
learn from day-to-
day experiences
Bottom-up
Operations strategy must reflect four perspectives –

top-down, bottom-up, market requirements, and
operations resources
Corporate strategy
Business
strategy
Capacity
Supply networks Operations Top-down Quality
Process technology Speed
resources Market Dependability
Development and
organisation requirements Flexibility
Cost
Bottom-up
Operational
experience
Emergent sense of
what the strategy
should be
Top-down and bottom-up

perspectives of strategy for the
Metrology Company
Top down
Corporate strategy
Corporate objectives impact
on business objectives which,
in turn, influence Operations Business strategy
Strategy
Operations
strategy
Emergent sense of what

the strategy should be
Day-to-day experience of
providing products and services
to the market reveals problems
and potential solutions which
become formalised into
Operations Strategy Operational experience
Bottom up
Top-down and bottom-up

perspectives of strategy for the Top down
Metrology Company Group building corporate capability
in high technology products and
services
Corporate objectives impact on Metrology division competes on
business objectives which, in ‘fast-to-market’ innovations
turn, influence Operations
Strategy
Operations must have fast and

flexible technology, supply
relationships, process and staff
Modular strategy provides flexibility

and innovation at relatively low cost
Experiment with ‘modular’ design

Day-to-day experience of providing of key products and components
products and services to the market
reveals problems and potential
solutions which become formalised
into Operations Strategy Customers confused by continual product
innovation and costs are increasing
Bottom up
Operations strategy reconciles the requirements

of the market with the capabilities of operations
resources
Strategic
reconciliation
Operations OPERATIONS Market

resources STRATEGY requirements
Operations strategy is the strategic reconciliation

of market requirements with operations resources
Tangible and Customer

intangible needs
resources
Operations Operations Performance Market

capabilities strategy objectives positioning
decision areas
Operations Competitors’
processes actions
Understanding Strategic decisions Required performance Understanding

resources Capacity Quality markets
and processes Supply networks Speed
Process technology Dependability
Development and Flexibility
organisation Cost
The ‘market requirements’ and ‘operations

resource’ analysis of the lighting company
Customers
Resources Professional theatres
Equipment (static, low margins)
Staff Exhibitions (slow growth,
Reputation low margins)
Relationships (internal Conferences etc. (fast
and external) growth, higher margins
Operations strategy Performance
Experience decisions objectives
Location Aesthetically innovative Market position
Virtual reality designs Traditionally
Capabilities Presentation advice differentiated on high
technology
Application of leading service level in theatre
Supplier development High customisation of
edge lighting and lighting solutions and exhibition markets,
sound technology Equipment racking innovation and service in
system Fast and dependable conference market
Articulation of client supply
requirements Organisational
structure
Staff meetings Competitors
Big groups dominating
Processes professional theatres
Integration of In-house operations
equipment supply and growing in exhibitions
client requirements market
Design process Conference market still
Supplier liaison fragmented
process
The market perspective analysis of the

garment company
CUSTOMERS
Segmentation
on: Age – youth
Purpose – general
PERFORMANCE
OBJECTIVES
Dependability MARKET POSITION
Speed of delivery Differentiation on:
Speed to market Innovative products
Time to market
Product mix flexibility Product range
Coordinated launches
COMPETITORS
Traditionally weak in:
promotion
design innovation
Resources
Tangible: The operations resource perspective
Equipment
Staff analysis of the lighting company
Intangible:
Reputation
Relationships
(internal and
external)
Experience
Operations strategy decisions
Capabilities Location
Application of Virtual reality technology
leading-edge lighting
and sound technology Organisational structure
Articulation of Staff meetings
client requirements Equipment tracking systems
Supplier development
Processes
Integration of
equipment supply and
client requirements
Design process
Supplier liaison
process
Operations Market
resources requirements
What you What you What you What you

HAVE DO WANT NEED
to maintain from your
in terms of your operations to
operations capabilities to ‘compete’
help you in the
capabilities and satisfy ‘compete’
markets market
Strategic
reconciliation
Operations strategy is …..
‘… the decisions which shape the long-term

capabilities of the company’s operations and
their contribution to overall strategy through
the on-going reconciliation of market
requirements and operations resources …’
Profit Output Profit
Total assets = Total assets × Output
Profit Revenue Cost

Output = Output Output
Average Average
revenue cost
Output Output Fixed assets Capacity

= ×
Total Capacity Total assets× Fixed assets
assets
Utilisation Working Productivity of
capital fixed assets
Operations strategy Capacity Supply Process Development and

decision areas network technology organisation
Decomposing the ratio profit/total assets to derive the

four strategic decision areas of operations strategy
Operations strategy decision areas are
partly structural and partly infrastructural
Supply network Process Development and

Capacity
technology organisation
Structural issues
Infrastructural
issues
The operations strategy matrix
Resource usage
Quality
Performance objectives
Speed
competitiveness
Dependability Operations strategy
Market
Flexibility
Cost
Supply Process Development

Capacity and
network technology organisation
Decision areas
Market-Based Approach to Operations Strategy

48
Market-Based Approach to Operations Strategy

• Using this approach an organisation makes a
decision regarding the markets and the
customers within those markets that it intends to
target.
• The organisation’s market position is one in

which its performance enables it to attract
customers to its products or services in a more
successful manner than its competitors.
49
Resource-Based Approach to Operations Strategy

• A resource-based view of operations strategy
works from the inside-out of the firm, rather
than the outside-in perspective of the market-
based approach.
• Here an assessment of the operations

resources and processes leads to a view of the
operations capability
50
Reconciling the Market-Based and

Resource-Based Strategy Approaches
• It has been found that not all companies pursue
strategy in accordance with a pure market-based
approach and it has been found that
competitiveness is not just a matter of simply
improving performance along specific competitive
dimensions, but incorporates the development of
capabilities that provide specific operating
advantages.
• Thus the resource-based view of strategy is that
operations takes a more active role in providing
long-term competitive advantage. 51
Reconciling the Market-Based and

Resource-Based Strategy Approaches
• What makes the development of operation strategy
particularly challenging is that not only should the
market-based and resource-based views of strategy
need to be considered at a point in time, but the
changing characteristics of markets and the need to
develop operations capabilities over time means a
dynamic as well as a static view of strategy is
required.
52
Reconciling the Market-Based and Resource-Based

Strategy Approaches 53
Operations Strategy Formulation

• In the following approach to operations strategy Hill proposes that the
issue of the degree of ‘fit’ between the proposed marketing strategy
and the operation’s ability to support it is resolved at the business level
in terms of meeting corporate (i.e. strategic) objectives.
• Thus Hill provides an iterative framework that links together the
corporate objectives; which provide the organisational direction, the
marketing strategy; which defines how the organisation will compete in
its chosen markets, and the operations strategy; which provides
capability to compete in those markets.
• The framework consists of five steps:
- Define corporate objectives
- Determine marketing strategies to meet these objectives
- Assess how different products win orders against competitors
- Establish the most appropriate mode to deliver these sets of
products
- Provide the infrastructure required to support operations 54
Step 1: Corporate Objectives

• Step 1 involves establishing corporate objectives
that provide a direction for the organisation and
performance indicators that allow progress in
achieving those objectives to be measured.
• The objectives will be dependent on the needs of
external and internal stakeholders and so will
include financial measures such as profit and
growth rates as well as employee practices such
as skills development and appropriate
environmental policies.
55
Step 2: Marketing Strategy

• Step 2 involves developing a marketing
strategy to meet the corporate objectives
defined in step 1.
• This involves identifying target markets and
deciding how to compete in these markets.
• This will require the utilisation of
product/service characteristics such as
range, mix and volume that the operations
activity will be required to provide.
56
Step 3: How Do Products Win Orders in the Market Place?

• This is the crucial stage in Hill’s methodology where any
mismatches between the requirements of the organisation’s
strategy and the operations’ capability are revealed. This step
provides the link between corporate marketing proposals and
the operations processes and infrastructure necessary to
support them.
• This is achieved by translating the marketing strategy into a
range of competitive factors (e.g. price, quality, delivery
speed) on which the product or service wins orders. These
external competitive factors provide the most important
indicator as to the relative importance of the internal
operations performance objectives discussed earlier in this
chapter. Next Figure provides examples of how different
(external) competitive factors will require a focus on the
corresponding (internal) performance objectives.
57
58
• Figure does not imply a one-to-one relationship between

competitive factor and performance objectives. This is
because of the interrelationships between the performance
objectives, for example speed will be partly dependent on
other performance objectives such as cost and
dependability. Thus the figure shows that a particular
external competitive factor will provide an indication of the
relative importance of the internal performance objective.
• At this stage it is necessary to clarify the nature of the

markets that operations will serve by identifying the relative
importance of the range of competitive factors (i.e.
customers and competitors) on which the product or service
wins orders. Two measurements systems are described
which do this.
59
Measuring the relative importance of the

competitive factors – Customers (Hill)
• Hill distinguishes between the following types of competitive
factors which relate to securing customer orders in the
marketplace.
- order-winning factors – They are key reasons for customers
purchasing the goods or services and raising the performance
of the order-winning factor may secure more business
- qualifying factors – Performance of qualifying factors must be
at a certain level to gain business from customers, but
performance above this level will not necessarily gain further
competitive advantage.
- From the descriptions above it can be seen that it is therefore
essential to meet both qualifying and order-winning criteria in
order to be considered and then win customer orders. 60
Measuring the Relative Importance of the Competitive Factors –

Customers and Competitors (Slack)
• This uses two dimensions – importance and performance – to
help operations managers prioritise performance objectives.
- The relative importance of a competitive factor is assessed in terms
of its importance to internal or external customers using a 9 point
scale of degrees of order-winning, qualifying and less important
customer viewed competitive factors.
- The relative performance of a competitive factor against
competitor achievement. A 9 point performance scale (rating from
consistently better than the nearest competitor to consistently
worst than most competitors) is used for each performance
objective.
• The next step is to plot each importance rating and
performance rating in an importance-performance matrix.
This indicates what customers find important in achieved
performance when compared with competitor performance. 61
The importance-performance matrix is divided into 4 zones.
62
Zones
The zones are defined as follows:
• Appropriate - Performance objectives in this zone are satisfactory in
the short to medium term, but there should be a wish to improve
performance towards the upper boundary of the zone.
• Improve - Performance objectives below the lower bound of the

appropriate zone will be candidates for improvement.
• Urgent Action - Here performance objectives are far below what the
customer requires and so should be improved to ‘same as’ or ‘better
then’ competitor performance.
• Excess? - Here too many resources may be being used to achieve

this level of performance. There is a possibility that they could be
deployed to a less well performing area.
63
Influences on the Relative Importance of the Competitive Factors

The measures above have considered the influence of customers
(Hill) and customers and competitors (Slack) on the relative
importance of the competitive factors. These influences are
now considered in more detail.
- Customers will value a range of competitive factors for any particular
product/service, thus it is necessary to identify the relative importance
of a range of factors. Competitors
- Competitor actions will also influence the basis on which competition is
based and may require a change in priorities of the competitive factors
used by the organisation. The Product/Service Life Cycle
- The product/service life cycle (PLC) provides one way of generalising
customer and competitor behaviour over time. The PLC is an attempt to
describe the change in sales volume for a particular product or service
from being introduced into a market until its withdrawal.
64
• Step 4 Delivery System Choice (Structural Decisions) and

Step 5 Infrastructure choice (Infrastructural Decisions)
– Steps 4 and 5 of Hill’s methodology involves putting the
processes and resources in place which provide the required
performance as defined by the performance objectives.
– Hill categorises operations decision areas into delivery system
choice, which is often referred to as structural decisions and
infrastructure choice, which is often termed infrastructural
decisions.
o Delivery system choice concerns aspects of the organisation’s
physical resources such as service delivery systems and capacity
provision.
o Operations Infrastructural decisions describe the systems,
policies and practices that determine how the structural
elements covered in step 4 are managed.
65
Achieving Strategic Fit –

Trade-Offs, Focus and Agility
– Step 3 of Hill’s methodology involves providing a ‘fit’
between the external competitive factors derived from
the market position and the internal performance
objectives derived from the operations processes and
resources (infrastructure).
– Some of the concepts underlining the idea of how this
fit can be achieved are now discussed in terms of the
concepts of trade-offs, focus and agile operations.
66
Trade-Offs
• The idea of trade-offs can be used to help us understand
the way in which the performance objectives relate to one
another. The original idea of trade-offs is that there is a
trade-off relationship between competitive objectives,
such as cost, quality, delivery etc. that means to excel in
only one objective usually means poor performance in
some or all of the others. Thus an attempt to be good at
everything will lead to being mediocre at everything.
• The existence of trade-offs means that optimum solutions
must be sought within the inherent limits (constraints) of
the operation.
67
Focus
• The concept of focus is to align particular market demands
with individual facilities to reduce the level of complexity
generated when attempting to service a number of different
market segments from an individual organisation.
• This is because it is difficult and probably inadvisable for
operations to try to offer superior performance over
competitors across all of the performance objectives. Usually
organisations succeed when they organise their resources
and compete across one or two performance objectives.
• Also the capabilities of the organisation will usually mean that
it can do some things better than others and a strategy that
uses inherent strengths will be more likely to offer a
competitive advantage.
68
Agile Operations
• The aim of agile operations is to be able to respond quickly to
changing market demand in order to retain current markets
and gain new market share.
• Agile operations aims to serve fast changing markets in which
customers demand both high quality service and low cost.
• Thus an agile operations strategy aims to overcome trade-offs
by developing the capability of its resources. Attempts to do
this have included the use of process technology and process
redesign.
69
Mass Customisation
Mass customisation is an attempt to combine high variety and
high volume output in order to provide the customer with
customised products at a relatively low price.
Literatures describe 3 levels of customisation.

• Customer-contact customisation - This is where the product
or service is tailored to individual needs.
• Adaptive customisation - This is where a standard product or

service can be customised to meet individual needs.
• Presentation customisation - This is where standard products

are presented differently to different customers.
70

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Amity Business School

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Please turn off your cell phones

Realm of Operations Strategy

Realm of Operations Strategy

Initial Issues that come our way

Operations Management : Definition

Operations Management: Salient Aspects

Service – Manufacturing Continuum

Ayurvedic Healing Treatment

Service Operations: Salient Features

Manufacturing & Service

Customer Layer Operations Support Layer

Ultimate Dealers Marketing Maintenance Quality

Costing Planning Tooling

Core Operations Layer Material IT Design IE

Capital Operations Material & Services

Operations Management : Functions

Design of Operations Operational Control of Operations

Product Design & Development Forecasting

• Design issues in Operations Management lay down

Operations Management: Challenges & Priorities

Operations Management & Strategy

‘Strategy is the direction and scope of an

Operations Management & Strategy

Four Stages of Judging Operations’ Contribution to Strategy

The stages are described as follows:

Measuring the Contribution of Operations to Strategy:

• The five basic operation’s performance objectives

• The activities triggered from a customer request for a

• The advantage of speed is that it can be used to both

The Performance Objectives from an

• This is useful because even though a performance objective

• When we look at approaches to strategy we find that

Operations management and strategy

Flow between Strategic

Analysis at the Operation

How is operations strategy different

Operations management Operations strategy

How is operations strategy different

How is operations strategy different

Operations Operations strategy

How is operations strategy different

For profit or not-for-

What is operations strategy

The four perspectives on operations strategy – top-

Operations strategy must reflect four perspectives –

Top-down and bottom-up

Emergent sense of what

Top-down and bottom-up

Operations must have fast and

Modular strategy provides flexibility

Experiment with ‘modular’ design

Operations strategy reconciles the requirements

Operations OPERATIONS Market

Operations strategy is the strategic reconciliation

Tangible and Customer

Operations Operations Performance Market

Understanding Strategic decisions Required performance Understanding

The ‘market requirements’ and ‘operations

The market perspective analysis of the

What you What you What you What you