Chap14

© Nigel Slack and Michael Lewis 2003

Level 1 - Fit

This chapter examines the second level of the operations strategy process – achieving sustainability

Level 2 - Sustainability

Level 3 - Risk

Align resources with requirements

Develop sustainable competitive advantage

Include impact of uncertainty In

crea

sin

g c

om

ple

xity


Lev

el o

f m

arke

t re

qu

irem

ents

Level of operations resource capability

Sustainability is maintaining ‘fit’ whilst extending operations capability and the requirements of the market

Line

of fit

Y

X

A

x2

y2B

Cy1

x1


Quality

Per

form

ance

ob

ject

ives

Capacity Supply Network

Process Technology

Development and

Organization

Resource Usage

Mar

ket

Co

mp

etit

iven

ess

Decision areas

Initial operations strategy matrix for CAG Recycling Services

Speed

Dependability

Flexibility

Cost

X X X

X X X

= Criticalintersections

X


Quality

Per

form

ance

ob

ject

ives


Process Technology

Development and

Organization

Resource Usage

Mar

ket

Co

mp

etit

iven

ess

Decision areas

Speed

Dependability

Flexibility

Cost

X

X


X

Operations strategy matrix for CAG Recycling Services after acquiring the high volume public authority consortium contract

X

X

X

X

X

X

X

X

X

X


Quality

Per

form

ance

ob

ject

ives


Process Technology

Development and

Organization

Resource Usage

Mar

ket

Co

mp

etit

iven

ess

Decision areas

Speed

Dependability

Flexibility

Cost

X

X


X

X

X

X

X

X

X

X

X

X

X

Operations strategy matrix for CAG Recycling Services as they anticipated future recycling legislation

X

X

X


Lev

el o

f m

arke

t re

qu

irem

ents

Level of operations resource capability

y1

x1

Fit over time at CAG Recycling Systems

y2

y3

y4

y5

x2 x3 x4

C

F

G

D

E


Value chain relationships

Competitive rivalry

Potential substitutes

Potential new entrants

Difficult to copy

Difficult to move

Scarcity

No substitutes

Achieving sustainability through barriers to entry and imitation

OPERATIONS RESOURCES

MARKET REQUIREMENTS

‘Static’ sustainability – barriers to entry

and imitation


Examine the performance of operations processes

Operations innovation

Develop new insights and capabilities

Compare this performance against objectives

Single-loop learning in operations


Reduced performance of operations processes

Operations innovation less easy

Insights and capabilities less useful

Performance objectives less appropriate

The potential limitations of single-loop learning

Shifts in technology, processes or markets,

leading to improved competitor performance


Double-loop learning questions the appropriateness of operations performance

Operations innovation

Develop new insights and capabilities

Compare this performance against objectives

Question the relevance of objectives

Develop new (more relevant) objectives

Examine the performance of operations processes


Single loop

Double loop

Time

Single and double-loop learning over time


YY

Quality

Per

form

ance

ob

ject

ives


Process Technology

Development and

Organization

Resource–based capability trajectories

Req

uir

emen

t-b

ased

m

arke

t tr

ajec

tori

es

Decision areas

Categorising path dependencies using the operations strategy matrix

Speed

Dependability

Flexibility

Cost

Trajectories of development


Performance based on ‘old’

technology

‘Disruptive’ technological

change

Performance required by

‘bottom end’ of the market

Performance based on ‘new’

technology

Performance required by ‘top end’ of the

market

Zone of market-acceptable

performancePerformance of goods and

services based on the

technology

A BTime

‘Disruptive’ technological change (Adapted from Christensen, C.M. (1997) The Innovator’s Dilemma, Harvard Business School Press, Boston, MA).