OM - strategy

Why some Organizations fail?: 

Why some Organizations fail?

Competitiveness : 

Competitiveness How effectively an organization meets the wants and needs of customers relative to others that offer similar goods or services ?

Businesses Compete Using Marketing: 

Businesses Compete Using Marketing Identifying consumer wants and needs Pricing Advertising and promotion

Businesses Compete Using Operations: 

Businesses Compete Using Operations Product and service design Cost Location Quality Quick response Flexibility Inventory management Supply chain management Service

Reasons for failure: 

Reasons for failure Too much emphasis on short-term financial performance Failing to take advantage of strengths and opportunities Failing to recognize competitive threats Neglecting operations strategy Too much emphasis in product and service design and not enough on improvement Neglecting investments in capital and human resources Failing to establish good internal communications Failing to consider customer wants and needs

What is Operations Strategy?: 

What is Operations Strategy? is the total pattern of decisions which shape the long-term capabilities of any type of operations and their contribution to the overall strategy, through the reconciliation of market requirements with operations resources.

Difference between operations management & operations strategy: 

Difference between operations management & operations strategy

PowerPoint Presentation: 

Operations strategy is different from operations management Example: capacity decisions Time scale Short-term capacity decisions 1–12 months Demand Long-term capacity decisions 1–-10 years Demand Operations management Operations strategy

PowerPoint Presentation: 

Operations strategy is different from operations management Level of analysis Operations management Operations strategy Micro level of the process Macro level of the total operation

PowerPoint Presentation: 

Operations strategy is different from operations management Level of aggregation Operations management Operations strategy Detailed For example “Can we give tax services to the small business market ?” Aggregated For example “What is our overall business advice capability compared with other capabilities?”

PowerPoint Presentation: 

Operations strategy is different from operations management Level of abstraction Operations management Operations strategy Concrete For example “How do we improve our purchasing procedures?” Philosophical For example “Should we develop strategic alliances with suppliers?”

PowerPoint Presentation: 

Top-down perspective What the business wants operations to do Operations resources perspective What operations resources can do What day-to-day experience suggests operations should do Bottom-up perspective Market requirement perspective What the market position requires operations to do Operations strategy The four perspectives on operations strategy

PowerPoint Presentation: 

Corporate strategy Business strategy Top-down and bottom-up perspectives of strategy Operations strategy

PowerPoint Presentation: 

The strategy hierarchy Key strategic decisions Influences on decision making Business strategy What is the mission? What are the strategic objectives of the firm? How to compete? Customer/market dynamics Competitor activity Core technology dynamics Financial constraints Corporate strategy What business to be in? What to acquire? What to divest? How to allocate cash? Economic environment Social environment Political environment Company values and ethics Functional strategy How to contribute to the strategic objectives? How to manage the function’s resources? Skills of function’s staff Current technology Recent performance of the function

Strategy Formulation: 

Strategy Formulation Distinctive competencies Environmental scanning SWOT Order qualifiers Order winners

Strategy Formulation: 

Strategy Formulation Order qualifiers Characteristics that customers perceive as minimum standards of acceptability to be considered as a potential purchase Order winners Characteristics of an organization’s goods or services that cause it to be perceived as better than the competition

PowerPoint Presentation: 

Different competitive factors imply different performance objectives Competitive factors If the customers value these ... Performance objectives Then, the operations will need to excel at these ... Low price Cost High quality Quality Fast delivery Speed Reliable delivery Dependability Innovative products and services Flexibility (products and services) Wide range of products and services Flexibility (mix) Ability to change the timing or quantity of products and services Flexibility (volume and/or delivery)

PowerPoint Presentation: 

What you HAVE in terms of operations capabilities What you NEED to ‘compete’ in the market Operations resources Market requirements What you WANT from your operations to help you ‘compete’ What you DO to maintain your capabilities and satisfy markets Strategic reconciliation

PowerPoint Presentation: 

The challenge of operations strategy formulation An operations strategy should be: Appropriate ... Comprehensive ... Coherent ... Consistent over time ...

PowerPoint Presentation: 

An implementation agenda is needed When to start? Where to start? How fast to proceed? How to coordinate the implementation programme?

Productivity: 

Productivity Productivity A measure of the effective use of resources, usually expressed as the ratio of output to input Productivity ratios are used for Planning workforce requirements Scheduling equipment Financial analysis

Productivity: 

Productivity Partial measures output/(single input) Multi-factor measures output/(multiple inputs) Total measure output/(total inputs) Productiv ity = Outputs Inputs

Factors Affecting Productivity: 

Factors Affecting Productivity Capital Quality Technology Management

Other Factors Affecting Productivity: 

Standardization Quality Searching for lost or misplaced items Scrap rates New workers Safety Layoffs Labor turnover Design of the workspace Incentive plans that reward productivity Other Factors Affecting Productivity

Improving Productivity: 

Improving Productivity Develop productivity measures Determine critical (bottleneck) operations Develop methods for productivity improvements Establish reasonable goals Get management support Measure and publicize improvements Don’t confuse productivity with efficiency