2. 2
Operation & Supply Strategy
Setting broad policies and plans for
using the resources of a firm to best
support the firm’s long-term competitive
strategy
3. 3
Operations Strategy
Strategy Process
Example
Customer Needs
More Product
Corporate Strategy
Increase Org. Size
Operations Strategy
Decisions on Processes
and Infrastructure
Increase Production Capacity
Build New Factory
4. 4
Competitive Dimensions
Cost or Price
– Make the Product or Deliver the Service Cheap
Quality
– Make a Great Product or Deliver a Great Service
– Design Quality/ Process Quality
Delivery Speed
– Make the Product or Deliver the Service Quickly
Delivery Reliability
– Deliver It When Promised
Coping with Changes in Demand
– Change Its Volume
Flexibility and New Product Introduction Speed
– Change It
Other Product-Specific Criteria
– Support It
5. 5
Dealing with Trade-offs
For example, if we reduce costs by reducing product
For example, if we reduce costs by reducing product
quality inspections, we might reduce product quality.
quality inspections, we might reduce product quality.
For example, if we
For example, if we
improve customer
improve customer
service problem solving
service problem solving
by cross-training
by cross-training
Flexibility
personnel to deal with a
personnel to deal with a
wider-range of
wider-range of
problems, they may
problems, they may
become less efficient at
become less efficient at
dealing with commonly
dealing with commonly
occurring problems.
occurring problems.
Cost
Delivery
Quality
6. 6
Order Qualifiers and Winners
Defined
Order
qualifiers are the basic
criteria that permit the firms
products to be considered as
candidates
for
purchase
by
customers
Order
winners are the criteria that
differentiates the products and
services of one firm from another
7. 7
Service Breakthroughs
A brand name car can be an
“order qualifier”
Repair services can be “order
winners”
•
Examples: Warranty, Roadside Assistance,
Leases, etc
8. Operations Strategy
Framework
8
Customer Needs
New product : Old product
Competitive
dimensions & requirements
Quality, Dependability, Speed, Flexibility, and Price
Enterprise capabilities
Operations andSupplier capabilities
Operations & Supplier Capabilities
R&D
R&D
Technology
Systems
Technology Systems
People
People
Distribution
Distribution
Support Platforms
Financial management
Human resource management
Information management
9. 9
What is Productivity?
Defined
Productivity is a common measure
on how well resources are being
used. In the broadest sense, it can
be defined as the following ratio:
Outputs
Inputs
13. Example of Productivity
Measurement
You have just determined that your service
employees have used a total of 2400 hours of labor
this week to process 560 insurance forms. Last
week the same crew used only 2000 hours of labor
to process 480 forms.
Which productivity measure should be used?
Answer: Could be classified as a Total Measure or
Partial Measure.
Is productivity increasing or decreasing?
Answer: Last week’s productivity = 480/2000 = 0.24,
and this week’s productivity is = 560/2400 = 0.23.
So, productivity is decreasing slightly.
13
14. 14
Problem-1
Amity Corporation received the data below
for its rodent cage production unit. Find the
Total Productivity.
Output
Input
50,000 Cages Production Time: 620 Lb Hour
SP: Rs. 3.5/Unit Wages: Rs. 7.5 per hour
Raw material: Rs. 30000
Component Parts: Rs. 15350
