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Production Operations ManagementOperations StrategyU. Akinc
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Linking Corporate strategy with operations strategy
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Operations StrategyCorporate StrategyProduct PlansCompetitive
PrioritiesPositioning/Operations Strategy
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Corporate StrategyMissionRelating the Organizations Efforts to
its Long Term Future.What Business are we in?Who are Our
Customers?What are our Concepts and Beliefs?How Do We Measure
PerformanceGrowth?Profits?Market Share?Innovation?
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Corporate StrategyEnvironment:Scanning the Environment for
Opportunities and Threats:CompetitionMarketEconomic TrendsSocial
and Political Changes
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Corporate StrategyDistinct Competencies:Organizations Unique
Strengths-- those that are difficult for others to duplicate
Examples:Competent WorkforceAdvantageous LocationInnovative
CapabilityTechnology
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Operations StrategyCorporate StrategyProduct PlansCompetitive
PrioritiesPositioning/ Operations Strategy
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Product PlansStrategic Product Line Related Choices to Leverage
Companys Distinct Competencies The market(s) served Low End High
End BothScope of Product Line WideNarrowAvailability
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Product Life CyclesPressures to Introduce New
Products:CompetitionExpired PatentsTechnological Innovation
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Product PlansA. Enter Early and Exit Late From Introduction to
Decline
B. Enter Early and Exit EarlyFrom Introduction to Maturity
C. Enter Late and Exit LateFrom Maturity to Decline
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Operations StrategyCorporate StrategyProduct PlansCompetitive
PrioritiesPositioning/Operations Strategy
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Competitive Priorities
Companies Compete on the Basis
of:QualityPerformanceConformanceServicePriceTimeIntroductionDeliveryFlexibilityVolumeProduct
Mix
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Operations StrategyCorporate StrategyProduct PlansCompetitive
PrioritiesPositioning/Operations Strategy
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Structure:Design & Creation of the Transformation System
Vertical Integration Technology Scale of Process/Capacity
Location/Layout Positioning Strategy
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Customization High LowLow VolumeOne-of-a-kindModerate
VolumesHigh VolumeNoneProcess Focus
IntermediateFocusProduct FocusProjectJob
ShopBatchLineContinuousPositioning Trade off
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Positioning the ProcessProduct Focused (Organizing the
Productive resources around the Product)High VolumeLimited variety
Products/ServicesLine FlowsSpecial Purpose Equipment Low Labor
SkillsCapital intensive/ High AutomationEfficient
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Positioning Strategy(cont.)Process Focused (Organizing the
Productive Resources According to Capability)Low VolumeWide Variety
/High CustomizationNot as Efficient/ Highly FlexibleGeneral Purpose
EquipmentHigh Skilled and Highly Trained WorkforceJumbled and
Complex Work Flow
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B. Infra-Structure (The use of the Transformation System)
1. Work-Force policies2. Quality Policy3. Operating System
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