The document presents a strategy presentation on operations strategy. It defines operations strategy as the total pattern of decisions that shape a company's long-term operations capabilities and contributions to the overall business strategy. It discusses Hayes and Wheelwright's four stages of operations contribution and how operations can progress from internally neutral to driving business strategy. The presentation uses Amazon as a case study, outlining its customer fulfillment network strategy and how it achieves one-day delivery, strong quality management, and an omnichannel approach to meet customer needs.

1. A presentation on
OPERATION STRATEGY
Under the guidance of
Dr. Prasanta Kumar Mohanty
Presented by
Rhitiq Pattnaik 200402100004
Sunanda Priyadarshini 200402100026
Kiran Patnaik 200402100039

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INTRODUCTION
No organization can plan in detail every aspect of its future actions; there is always same
degree of uncertainty about what conditions will exist in the future.
All organizations need the ‘backdrop’ of a well-understood strategic direction, so they know
where they are heading and how they could get there.
Once the operations function has understood its role in the business, it needs to formulate a
set of general principles which will guide its decision making.

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WHAT IS STRATEGY?
The word “strategy” is derived from the Greek word “strategos” meaning “leading an
army”.
Strategy is a plan of action designed to achieve a long term goal.
It is how the mission of a company is accomplished.
It unites an organization, provides consistency in decisions, and keeps the organization
moving in the right direction.

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BUSINESS STRATEGY
Business Strategy
Marketing Strategy Operations Strategy Financial Strategy
• Price
• Product
• Place
• Promotion
• Cost
• Quality
• Delivery
• Flexibility
• Inventory
• Financing
• Financial
Management of
Ongoing Operations

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BUSINESS STRATEGY
Setting broad
objectives that
direct an
enterprise towards
its overall goal.
Planning the path
that will achieve
these goals.
Stressing long-term
rather than short
term objectives.
Dealing with the
total picture rather
than stressing
individual activities.
Being detached
from the confusion
and distractions of
day-to-day
activities.

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OPERATION STRATEGY
Nigel Slack and Michael Lewis define the term.
“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,”

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OPERATIONS OF A COMPANY
A company’s operations are
the activities to produce and
deliver a product or service.
Operation management includes
planning, implementing, and
supervising the production.
Operation strategy goes a level
higher to determine operations
approaches and goals.

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ROLE OF OPERATION STRATEGY
Nowadays, t’s not enough to simply follow best practices. Companies must innovate, not just
play catch-up to practices already mastered by competitors.
To be effective and competitive, all parts of a company must work together. All departments
should contribute to the company mission and have strategies underlying the overall
corporate/business strategy.
Without a strong operations strategy, companies fail to keep up with changing markets and lose
out to more strategic competitors.

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HAYES AND WHEELWRIGHT’S FOUR STAGES OF
OPERATION CONTRIBUTION
Professor Robert H. Hayes and Steven C.
Wheelwright of Harvard university developed a four
stage model which can be used to evaluate the role
and contribution of the operations function.

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FOUR STAGES OF OPERATIONS CONTRIBUTION
Increasing
Strategic
Impact
Redefining Industry
Expectations
Clearly the best in
the Industry
As good as
Competitors
Holding the
organization back
Stage-1
Correct the
worst
problems
Stage-2
Adopt best
Practice
Stage-3
Link Strategy
with
operations
Stage-4
Give an
Operation
advantage
Implementing
strategy
Supporting
Strategy
Driving
Strategy
Increasing Operation Capabilities
Internally
neutral
Externally
neutral
Internally
Supportive
Externally
Supportive

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PERSPECTIVES ON OPERATION STRATEGY
Operations
strategy
Top-down
Perspective
Bottom-up
Perspective
Market
requirement
Perspective
Operation
resources
Perspective
What the business
wants operations
to do.
What the market
positions requires
operation to do.
What day-to-day
Experience suggest
operation to do
What Operation
Resources can
do

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CORE OPERATIONAL STRATEGY AREAS
Corporate
Product or Service
Development
Customer-Driven
Core
Competencies
Core
Competencies

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CASE STUDY OF AMAZON

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AMAZON’S OPERATION STRATEGY
• Amazon has adopted the customer fulfillment
networking (CFN) strategy that emphasize to augment
gross profit margins.
Customer Fulfillment
Network (CFN)
Strategy:
• Amazon keeps a complete record of all of its customers. Amazon
main a data base that knows that when and what a customer
orders.
• If a customer has not been placing order for some time then
Amazon sends him an e-mail coupon containing information
regarding entirely different or related product line to stimulate
customers for reordering.
Customer
Centric
Strategies:

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• The Objective of decision is to maximize operational output in order to
fulfill the customer satisfaction.
• Their operations management is focused on continuous improvements
to raise the quality of e-commerce business.
Quality
Management:
• Amazon created the two-day shipping standard. It then moved
to one-day. Now, it's expanding its ability to offer same-day
delivery in more markets.
One Day Delivery:
• Amazon CEO Jeff Bezos still personally reads
customer-complaint emails sent to him.
Customer Review:

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• Omnichannel retailing refers to transacting across multiple
channels.
• It is the main key to its success.
Omnichannel
Strategy:
• Recently Amazon has adopted this technology, it provides
make-up testing technology to amazon.
Virtual Make-Up
Tech:
• Amazon began testing delivery drones.
• A hybrid aircraft that’s capable of vertical takeoff and
landing as well as sustained forward flight.
Delivery using
Drone:

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TIPS FOR OPERATION STRATEGIES
Take a Global
View
Have a Strong
Mission
Statement
Gain
Competitive
Advantage
with
Differentiation
Gain Insights
from a SWOT
Analysis
Track Progress

18. THANK YOU
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