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Operations and Supply Strategy Overview

This chapter discusses operations and supply chain strategy. It covers key topics such as operations strategy, competitive dimensions, order qualifiers and winners, developing a manufacturing strategy, service strategy capabilities, and measuring productivity. Operations strategy involves setting policies and plans to optimize the use of resources in support of competitive strategy. Competitive dimensions include factors like cost, quality, delivery speed and reliability, and flexibility. Order qualifiers are basic criteria for consideration, while order winners differentiate one firm from others. Productivity is measured by comparing various outputs to inputs.

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Kabeer Jan
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75 views10 pages

Operations and Supply Strategy Overview

This chapter discusses operations and supply chain strategy. It covers key topics such as operations strategy, competitive dimensions, order qualifiers and winners, developing a manufacturing strategy, service strategy capabilities, and measuring productivity. Operations strategy involves setting policies and plans to optimize the use of resources in support of competitive strategy. Competitive dimensions include factors like cost, quality, delivery speed and reliability, and flexibility. Order qualifiers are basic criteria for consideration, while order winners differentiate one firm from others. Productivity is measured by comparing various outputs to inputs.

Uploaded by

Kabeer Jan
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd

Chapter 2.

Operations and Supply Strategy


 Operations Strategy & Competitive Dimensions
 Order Qualifiers and Winners
 Strategy Design Process
 A Framework for Manufacturing Strategy
 Service Strategy Capacity Capabilities
 Productivity Measures

1
Operations Strategy & Competitive Dimensions
Setting broad policies and plans to utilize the
firm’s resources optimally to support its longer
term competitive strategy.

2
Competitive Dimension
 Competitive Dimensions include:
 Cost or Price
 Make the Product or Deliver the Service Cheap
 Quality
 Make a Great Product and (not or) deliver a Great Service ( X vs
Mercedes)
 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, more frequently then GM or Ford, who is this company?
 Other Product-Specific Criteria
 Support It

3
Trade-Offs
 Focus and trade-offs, can’t do it all at the same time
 Lexus can’t be made and sold for $25,000. T or F?
 A few examples:
 Generally low-cost strategy is not compatible with
flexibility or speed of delivery
Cost

Flexibility Delivery

Quality
 High quality and low cost tend to be incompatible
 Straddling occurs when a firm seeks to mimic a
competitor’s position while trying to maintain their
original (successful) position.

4
Order Qualifiers and Winners

 Order qualifiers are the basic criteria that permit the


firm’s products to be considered as candidates for
purchase by customers
 Through the 1980s  “nobody got fired buying IBM
products”

 Order winners are the criteria that differentiate the


products and services of one firm from another
 Caterpillar  “48 hours parts/service guarantee”

 Class examples:

5
Steps in Developing a Manufacturing Strategy
1. Segment the market according to the product group
2. Identify product requirements, demand patterns,
and profit margins of each group
3. Determine order qualifiers and winners for each
group
4. Convert order winners into specific performance
requirements

6
Service Strategy Capacity Capabilities
 Process-based
 Capabilities derived from activities that transform material
or information and provide advantages on dimensions of
cost and quality
 Systems-based
 Operating capabilities that are broad-based involving the
entire operating system and provide advantages of short lead
times and customize on demand
 Organization-based
 Organizational ability to master/implement (learn) new
technologies, faster new plant/product introductions
 These capabilities are more difficult to replicate thus provide
a strong operations-based competitive advantage

7
Productivity
 A common, seemingly simple but very complicated
measure
 How a country, region, industry, company, business
unit, department, ... uses its resources (relative to
others).
 Broadly defined as the ratio of OUTPUTS to INPUTS
 Total, partial, or multifactor measures:

8
Productivity Example

9
Some Partial Productivity Measures
 Business  Productivity Measure
 Restaurant  Meals per hour
 Retail Store  Sales per square foot (meter)
 Chicken Farm  Kilo of meat per Kg. of feed
 Utility Plant  Kilowatt per ton of coal
 Paper Mill  Tons of paper per cord of wood

10

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