Chapter 2: Operations and Supply Chain Strategy

What are the 3 levels of planning?

Corporate Strategic Planning

Business Unit Strategic Planning

Functional Strategic Planning

Corporate Strategic Planning

addresses the portfolio of businesses owned by the firm, broad in scope

Business Unit Strategic Planning

how your business unit should compete

Functional Strategic Planning

SBU has functional groups such as finance, marketing, internal operations etc.

What are the 3 concerns for operation strategy?

Critical Customer

Value Proposition

Competitive Priorities

Critical Customer

most critical to firm's current and future success, receives the firm's focus

Value Proposition

tangibles and intangibles that customers expect from a firm

Core Capabilites

unique and superior operational abilities that stem from the routines, skills and processes that the firm develops and uses; they come from processes, planning systems, supply chain relationships, technology, people and culture

What are the 5 competitive properties?

Quality

Timeliness

Cost

Innovation

Flexibility

Product-Related Competitive Priorities

- Quality

- Timeliness

- Cost

Process-Related Competitive Priorities

pertain to how supply chain operations are run overtime

- Innovation

- Flexibility

Timeliness

delivered or available to customers in a timely fashion

Lead Time

amount of time that passes between the beginning and ending of a set of activities

Order-to-Delivery Lead Time

time between when the customer orders the product to when they receive the product

Innovation

both radical and incremental changes in process and products

Flexibility

how well a company can respond to the changes

What are the 3 models used in operations strategy?

Strategic Profit Model

Balanced Scorecard Model

Supply Chain Operational Reference Model

Strategic Profit Model

shows how operational changes affect the overall performances of a business unit, system of financial metrics ultimately leading to the return for all stakeholders

Balanced Scorecard Model

an integrative approach for developing strategic, organizational levels metrics, uses a mix of financial and non-financial metrics, it is the framework for translating overall corporate strategy into operational terms

Supply Chain Operational Reference Model

identifies basic management practices at different operational levels for benchmarking and strategy deployment