Production Operations
Management
Operations Strategy
U. Akinc
Bus 241
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Linking
Corporate
strategy
with
operations
strategy
Bus 241
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Operations Strategy

Corporate Strategy

Product Plans

Competitive Priorities

Positioning/Operations Strategy
Bus 241
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Corporate Strategy
Mission
Relating the Organization’s Efforts to its Long
Term Future.
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What Business are we in?
Who are Our Customers?
What are our Concepts and Beliefs?
How Do We Measure Performance
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Growth?
Profits?
Market Share?
Innovation?
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Corporate Strategy
Environment:
Scanning the Environment for Opportunities
and Threats:

Competition

Market

Economic Trends

Social and Political Changes
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Corporate Strategy
Distinct Competencies:
Organization’s Unique Strengths-- those that
are difficult for others to duplicate
Examples:


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Competent Workforce
Advantageous Location
Innovative Capability
Technology
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Operations Strategy

Corporate Strategy

Product Plans

Competitive Priorities

Positioning/ Operations Strategy
Bus 241
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Product Plans
Strategic Product Line Related Choices to Leverage
Company’s Distinct Competencies
 The market(s) served
– Low End
– High End
– Both


Scope of Product Line
– Wide
– Narrow
Availability
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Product Life Cycles
Pressures to Introduce New Products:

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Competition
Expired Patents
Technological Innovation
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Product Plans

A. Enter Early and Exit Late
From Introduction to Decline

B. Enter Early and Exit Early
From Introduction to Maturity

C. Enter Late and Exit Late
From Maturity to Decline
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Operations Strategy

Corporate Strategy

Product Plans

Competitive Priorities

Positioning/Operations Strategy
Bus 241
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Competitive Priorities
Companies Compete on the Basis of:
 Quality
Performance
 Conformance
 Service

Price
 Time

Introduction
 Delivery


Flexibility
Volume
 Product Mix

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Operations Strategy

Corporate Strategy

Product Plans

Competitive Priorities

Positioning/Operations Strategy
Bus 241
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A. Structure:
Design & Creation of the Transformation
System
Vertical Integration
 Technology
 Scale of Process/Capacity
 Location/Layout
 Positioning Strategy

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Positioning Trade off
High
Customization
Process Focus
Project
Job Shop
Intermediate
Focus
Batch
Product Focus
Line
Continuous
None
Low
Low Volume
One-of-a-kind
Moderate
Volumes
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High
Volume
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Positioning the Process
 Product
Focused (Organizing the Productive
resources around the Product)
 High Volume
 Limited variety Products/Services
 Line Flows
 Special Purpose Equipment
 Low Labor Skills
 Capital intensive/ High Automation
 Efficient
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Positioning Strategy(cont.)

Process Focused (Organizing the Productive
Resources According to Capability)
 Low Volume
 Wide Variety /High Customization
 Not as Efficient/ Highly Flexible
 General Purpose Equipment
 High Skilled and Highly Trained Workforce
 Jumbled and Complex Work Flow
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B. Infra-Structure
(The use of the Transformation System)
1. Work-Force policies
2. Quality Policy
3. Operating System
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