According to slack and lewis ‘’operation strategy is thetotal pattern of decisions which shape the long termcapabilities of any type of operations and theircontribution to the overall strategy, through thereconcilliation of market requirements with operationsresources’’
Building operations strategy on competitive priorities: Operation strategy should be linked with business strategy. On the other hand , the business strategy should take into account the realities of strength and weakness of production. Likewise operation strategy must be consistent with business strategy and formulated to support the goals of business organization .
In 1970’s and early 80’s operation strategy was neglected. Late 80’s and early 90’s many companies developed the strategies that have quality and time as their major concern.Strategy formulation: To formulate an effective strategy the distinctive competencies are taken into account. The factors that could have either positive or negative effect on the firm must be critically examined(SWOT analysis)
In formulating a successful strategy, a firm must take into account both order qualifiers and order winners.Examples of distinctive competencies; Dimensions Competencies Price Low cost Quality High perfomance design, high quality Time Rapid delivery Flexibility Variety, volume Service Superior customer service Location convenience
Even though firms have tended to emphasise traditional strategies based on cost minimisation or product differentiation, many firms are now adopting strategies based on quality and time.Quality based strategyTime based strategy
Elements of operation strategy:1.Positioning the production system: The two basic types of product design are custom and standard2.Focus of factories & service facilities: According to wickham skinner, “a factory that focuses on a narrow product mix for a particular market niche will out perform the conventional plant, which attempts a broader mission”
3.Product/service design & development: The activities in operation, Marketing & engineering functions related to product/service design & development are intense as the new product/service are developed.4. Technology selection and Process development: Combining high- technology equipment with conventional equipment and devising affective overall production schemes are indeed challenges.
5. Allocation of resource to Strategic alternatives: Cash and capital funds, capacity, works, engineers, machines, materials, and other resources are available in varying degrees for each firm. Because for most companies the vast majority of the firms resources are used in production/operations.
6.Facility plans: Capacity, location and layout: How to provide the long-range capacity to produce the products/services for a firm is crucial part of setting the operations strategy. Land may need to be purchased, specialized technologies may have to be developed, new equipment may need to be made or purchased and installed.