PRESENTATION ON
OPERATONS STRATEGY
CHAPTER 2
January 31,
2019
Presenters
• Kajal Pradhan 120
• Amir Shrestha 106
• Binith Nyaupane 112
• Nabindra Manandhar 128
2
Introduction to operation strategy
• Long-term plan for using major resources
• Shape the long-term capabilities of company’s
operation
• Resources should be configured to achieve objectives.
• Some of the major long-term issues include
- How large do we make our facilities?
- What will supply chain look like?
- How do we ensure quality
3
Competitive weapons
-Cost
- Quality
- Dependability
- Flexibility
- Time or speed
4
Cost or price
• Offering product at a low price relative to competition
• Typically high volume products
• Can use lower skill labor
• Low cost does not mean low quality
5
Quality
• Refers to materials , workmanship , design and service
• Focus on the requirements of the customer
• The level of quality vary : aimed to serve
• Advantage of higher-quality products : higher prices
• Goal of process quality : error-free products.
6
Dependability
• Quality of a product is as good as expected;
-means no defective
-product to move to customer
• Deliver a product to a customer at a certain
time and date
7
Flexibility
• Ability to respond to change
• Flexibility is concern with
- capable of producing many products
-meet the different delivery time of customer .
Example :
Company will use truck to transport product to a
customer if customer is no in a hurry
8
Time or speed
• First that can deliver often wins the race
• Reduce time gap :place order and receives
• Install equipment which carries out process faster
9
Linkage between Corporate , Business and Operation
Strategy
• Strategy= road map that helps to achieve objectives
• Problem= counter with strategy
• 3 levels of strategy
10
Corporate strategy
Business strategy
Functional strategy
Operations strategy
Marketing strategy Finance strategy
11
Corporate strategy
• Highest level of strategy
• Philosophy,direction,techniques to achieve objective
• Concerns with whole corporation as unit
• Overall vision of the organization
• Main focus=survival of the organization
12
Business strategy
• Concerned with how a business should compete
• Include divisions, product lines or other business within
organization
• Positioning strategies to secure identity,position
• Increase business value for corporate and stakeholders
• Maintain low-price,product differentiation
13
Functional strategy
• Level of the operating divisions and departments.
• Strategic issues related to business processes and value
chain
• Strategies in R&D, operations, manufacturing e.t.c
• Involve the development and coordination of resources
• Business level strategies can be effective and efficient
• Providing input to business and corporate strategy
14
Operation strategy
• Helps to define methods of producing goods or service
offered to customer
• Translates corporate to operation strategy
• Focusing on core competency
• Decision regarding processes , infrastructure and
capabilities
• Consistent with other departments
15
Components of Operation Strategy
• Designing of the product system
• Facilitates production and services
• Product or service design and development
• Technology selection, development and process development
• Allocation of resources
• Focus on facilities planning
January 31, 2019 16
Designing of the product system
• Key element – positioning the production system
• Types
– Custom individual customer’s need
– Standard mass production
January 31, 2019 17
Facilitates production and services
• Planed way to accomplish task- specialization
• Objectives to deliver products and services
• Achievements (cost, time and quality)
January 31, 2019 18
Product or service design and development
• Different stages in product life cycle
• Well developed product have long life
• Its impact on quality and cost
January 31, 2019 19
Technology selection, development and
process development
• Selection of applicable technology for production
• Nature of products & services determine technology
• Technology beneficial in long-run is accepted
January 31, 2019 20
Allocation of resources
• Resources are limited in an organization
• Capital, manpower, material, machineries &
equipments
• Focus on allocation of these resources
January 31, 2019 21
Focus on facilities planning
• Proper placement of facilities boosts efficiency
• Location & layout of facilities determine
competiveness
• Minimize wastage of time and resources
January 31, 2019 22
Service Strategies
• Design, develop and implement service management
as organizational capabilities
• It relates with;
Why should customer buy this service?
Why should they buy from us?
What form does the pricing structure take?
Service Portfolio Management
Demand Management
23
Service Strategy
• How to place a service in the market?
• begins with entrepreneur idea & unmet need
• service strategy defines the portfolio of services to
be offered and the customers to be supported
24
Service Strategies focus
A. Customers
• Recognize need of customer loyalty
• Welcome complaints
B. Employees
• Happy staffs = happy customers
• Customer-centric
25
Manufacturing Strategies
• Should match with marketing strategies
• Flexible and speed marketing with flexible and fast
manufacturing,
• Example: Flexibility vs mass production
• Dell (purely you), hp (consistent high quality and
innovative product)
• How to contribute to competitive advantage of
business
26
Manufacturing Strategies focus
• Customers requirements [features customization]
• Competitors position
• Manufacturing capabilities
• Options available to manufacture
• Outputs that are to be manufactured and
alternatives
• Reduction of cost without sacrificing quality
27
Production on demand and Mass production
Fixed cost and inventory management
28
Cost and Quality ; Delivery and Flexibility
COST QUALITY
DELIVERY FLEXIBILITY
29
Delivery and Flexibility
Reduce the cycle time and provide flexible manufacturing
30
Quality and Cost
Cheap supplies without differing quality standards
31
Flow of P/M Manufacturing outputs Competitive
Analysis
Job Batch JIT Cost Qual Flexibil Deliv Company
Shop ity ity ery position
Market
Competitors
Company target
Manufacturing Levels
Human Organization Production sourcing Process facilities
Resource structure & planning technology
control and control
MANUFACTURING STRATEGIES WORKSHEET 32
STEPS IN STRATEGIES DEVELOPMENT
Business variety Market standardization Growth
strategies volume of market
Success cost Quality Availability Features
Factors
Strategic capacity / facilities
decisions workforce
information management system
process technology
Tactics cost Quality Short Cycle process
reduction management time design
33
