Operations Strategies (10)

Strategy defined in business

Set broad long-term objectives towards overall goals. About patterns of decisions that influence the long-term directions

'Top-Down' perspective

Strategies from corporate, business decision infleunces, reflects what the whole business/group wants to do.

Market-based view (Porter 1980)

'Bottom-up' perspective

Day to day activity learning helps decision making on improvement that infleunce direction

'Outside-in' perspective

Supply chain and customers translate market position to influence decisions and set objectives

'Inside-out' perspective

Influence from business itself to suppliers and customers. Develops resources and processes to exploit capabilities in chosen market.

Operations strategy

plan for managing operations over long-term to acheive business goals = achieve competitive advantage

Corporate strategy (top-down perspective)

Overall plan, Decisions about the whole business, industries they should go into? what to acquire? not about the operation but the business

Business strategy (top-down)

how should the business compete?, what are the competitive priorities? what is the mission? what are the strategic objectives and how to compete?

Operations strategy (top-down)

Decide how to allocate resources to support business strategy (action plans) how to contribute to strategic objectives? how to manage the avaliable resources to activate functional objectives?

Market driven view

outside-in - strategy driven by rivalry of firms, power of customers/suppliers, threat of new products/companies competing (Porter 1980) OQ

Resource driven view

Strategy driven from exisiting resources/knowledge and its difficult to imitate (Lowson 1990)

Strategy in general

Planned (intended strategy) -> Emergents go into Deliberate action or unrealised (failed from external factors) -> If successful, Realised strategy

Starts with corporate organisation deciding what their postion is in the market, then make changes to theri operations

Strategic position (internal/external)

Rivalary among exisitng competitors (in the middle)

Surrounding it: Bargaining power of suppliers, threat of new entrants, bargaining power of buyers, threat of substitute products

Looks at position of business before decisions of how to allocate resources + operations strategies come into play

Once postion is established, then decide operations strategy

Cost leadership strategy

Exploit economies scale in the mass market, lower cost products/services competition

Differentiation strategy

Target mid market but not as price sensitive, products/services protected by IP, rarely highly competitive but find ways to stand out/ be distinctive.

Focus strategy

competing in the niche market, segmentation (specific segement in exisiting market identified)

Differentiation focus strategy

making premium products/services and charge premium prices as its niche

Cost focus strategy

competitive in cost within product or niche

Generic strategy (Porter,1990)

also influenced by trade offs between volume and variety

Contemporary (modern) operation strategies

Try to reduce trade offs between volume and variety, specifically MPOs.

OWs combined to create win - wins (strategic reconcilliation) - reconciling balance between trade offs

Mass customization

Efficiency of mass production and personalisation for differenciation

Delivers Flexibility, Cost and Dependability using 'modularity' E.g. LEGO fits everything

Lean operatios

Acheieving competitive advantage by aliminating all types of waste, aims for zero defects in process and product

Enables Quality, Cost and Dependability to be combined

Agile operations

Demand driven concept (responsiveness), reduce waste and sense changes in internal/external environment and respond effectively, efficiently and economically.

Delivers Speed, Cost and Dependability

Lean explained

Customer focus view valued, approach to planning and controls flow in operations, trying to improve operations performance - effectiveness of process, only make what is pulled by customer (demand driven)

Strive for perfection (errorfree/zero defects)

Transport waste

Excessive movement of materials, information and customers

Inventory

unnessary holding

Motion

Inefficient layouts, job/work designs

Waiting

period of inactivity between processes

Overprotection

output

Overprocessing

too many steps during transformation stage

Defects/Rework

Faulty items

Skills

Under-utilization of employees (enlargement and enrichement needed)

Organised workspace technique

Sort, shine, set, standardising, sustain

Identity work rate to fulfill demand technqiue

takt time

Control production (Kanban) strategy technique

visual cards on what to do, what are we currently doing and whats completed, doesnt move forward unless certain tasks are complete, cant do too many tasks at once

Level production load (Heijunka) technique

Volume and variety mix - for mass customisation strategies. levelling out, same amount of volume but with variety

Cell layout technique

U-shape multiskilled staff, feasible line balancing

Just - in - time (JIT) manufacturing technqiue

ratio of outputs to inputs

Automatic line stopping (Jidoka) technique

stops production if a fault in productions so theres no huge amount of faulty goods

Quick changeovers (SMED)

Single Minute Exchange of Die, instantaneous/doesnt interfere with process flow

Characteristic of Agile

Speed of delivery (creates dependability) and development, OQ

Fulfil Agile MPO

Modular desing used and postponement of creation of product

Promote flow of information with customers/suppliers, collaborative relationships (multiple sourcing)

Modualaty component have to create inventory of those modular parts for finished products

Form postponement

Shape of the products

Time postponement

Delay forward movement of goods until customer orders have been received

Place postponement

how printing press works, positioning of inventories downstream in centralized distribution

RFID (Radio Frequemcy Identification Devices) Agile

tags to track where deliveries are (location), helps reduce theft and shortens time windows.

EPOS (ELectric point of sale) Agile

Reorder alerts replenish of inventory required

EDI (Electronic Data Exchange) Agile

communication links through technology