The direction and scope of an organisation over the long-term: which achieves advantage for the organisation through its configuration of resources within a challenging environment, to meet the needs of markets and to fulfil stakeholder expectations
10 Strategic Decisions
Differentiation: UniquenessCost: Low priceResponse: Flexibility, Reliability and Timeliness
OPERATIONS STRATEGYIN ACTIONCase Study 2.3 (Andrew Greasley, 2009)
Group Members Miranda Nasasara Nathan Williams Subhi Pradhan
Case Study Questions Discuss how operations can provide strategic advantage Discuss the performance of the company in terms of the five performance objectives
Table of Contents Case Study Summary Define the role of Strategy Levels of Strategy Operations Strategy and Its Importance Strategic advantages Five performance objectives Conclusion/Recommendations References
Case Study Summary Companies restructuring to tackle negative changes in the economy through its operations Corporate Strategy →Operations Strategy i. Dell the undisputed leader (PC industry) ii. Schefenacker Vision Systems (car wing mirrors)
Strategy: An Overview “ Strategy is about setting broad objectives that direct an enterprise towards its overall goal” (Slack and Lewis, 2008). “Strategy is about doing the right things” (Collins, 2008)
Levels of Strategy Corporate Strategy Business Unit Strategy Functional Area Strategies
Operations Strategy & Its Importance “This concerns the pattern of strategic decisions and actions which set the role, objectives and activities of operations” (Slack et al., 2004).
Strategic Advantage Through Operations Achieving Strategic Advantage Through Operations a) Competing on Differentiation b) Competing on Cost c) Competing on Response
Q1: Dell Operations SystemOPERATIONS STRATEGIC ADVANTAGEBuild-to-Order Manufacturing and Low Price/ Increase Market shareMass customizationDirect Selling Intelligence about customer preferences and needs; Quality feedback; SpeedVirtual Integration and Information Immediate Access to Customers andSharing PartnersCommitted to Just-in-Time Inventory Cost advantage; Speed
Schefenacker Vision SystemsOPERATIONS STRATEGIC ADVANTAGEDirect supply to car assembly Entry into international business Cost EffectiveVirtuosity Increase market share Expand the value chainLean productions Reduction of waste in supply chain
Q2: Definition of Five Performance ObjectivesWhat is Five Performance Objectives? Definition: “A criterion against which to evaluate the performance of operations.” (Slack et. al., 2004)
The ‘Sand cone’ model of Operations Excellence Source: , Ferdows, K. and Meyer, D (1990) Lasting Improvements In Manufacturing Performance. The Journal Of Operations Management, Pg 168–184.
Five Performance ObjectivesEXCELLENT OPERATIONS GIVES THE ABILITY TOPERFORMANCE IN …. COMPETE ON…Cost Low PriceQuality High QualitySpeed Fast DeliveryDependability Reliable DeliveryFlexibility Frequent new products/services Wide range of products/services Changing the volume of product/service deliveries Changing the timing of product/service deliveries Source: Slack and Lewis (2001)
Dell/SchefenackerDell Schefenacker Well known brand. Able to satisfy most Cheap. demanding customers. Good quality. Cost effective. Able to alter production Able to design and build for customer demand. better parts. Good warranties. Extra space for production cells.
Discussion Question 1 How well do you think Dell’s manufacturing strategy supports its competitive priorities for the personal computer market? What changes, if any, would you like to suggest?
Recommendations What about the non-expert buyers? Dells supply chain is shrinking1. HPs retailing prowess,2. Apples product design and3. Acers low costs
References Collins, D. J. and M. G. Rukstad. (2008) Can you say what your strategy is? Harvard Business Review. 82-90. ReComparison (2011) Dell vs HP. Available at www.recomparison.com. [Last Accessed on 15th November, 2011]. Greasley, A. (2009) Operations Strategy in Action. 2nd edn, Chichester, England: John Wiley & Sons. Helium Leak Detector (2011) Best Quality Laptop Computer Brands-Comparison of All Well-Known Laptop Computer Manufacturing Companies in the Marketplace. Available at www.heliumleakdetector.com . [Last Accessed on 15th November, 2011] Ferdows, K. and Meyer, D (1990) Lasting Improvements In Manufacturing Performance. The Journal Of Operations Management, 168–184.
Cont… Lewis, M. and Slack, N. (2008) Operations strategy . 2nd edition, Harlow: FT Prentice-Hall. Prahalad, C.K. and Hamel, G. (1990) The core competence of the corporation’, Harvard Business Review. 68(3):79–91. Reisinger, D. (2010) Dell’s HP Opportunity: 10 Things It Can Do to Capitalize on Mark Hurd’s Departure. Channel Insider. Slack, N. and Lewis, M. (2001) Operations Strategy . European Edition, FT Prentice-Hall: Financial Times. Slack, N., Chambers, S. and Johnston R. (2004) Operations Management. 4th Ed., Harlow: Pearson Education. The Manufacturers US (2010) Schefenacker, Clear View. The Manufacturer. Available on www.themanufacturers.com. [Last Accessed on 14th November, 2011].