Operations Management Lesson 5 (Chaps 3 + 4?)

Link between strategy and operations

Strategy sets direction and operations translates that into action

4 perspectives on operations strategy

• Top-down perspective

• Bottom-up perspective

• Inside-out perspective

• Outside-in perspective

top-down perspective

reflect what the whole group or business wants to do

bottom-up perspective

learn from day-to-day activities so as to cumulatively build strategic capabilities

outside-in perspective

translate intended market position so as to provide the required objectives for operations decisions

inside-out perspective

develop resources and processes so that their capabilities can be exploited in their chosen markets

relationship between ‘business model’ and ‘operating model’

they overlap, with the operating model indicating how processes, resources, technology, people, measures and responsibilities are to be organised to support the business model

core concepts

key technologies that make up the product (i.e. LED lights, computer chips, battery)

linkages

how the components interact with each otherto create a cohesive system or process.

strategy

total pattern of decisions and actions that position the organisation in its environment and that are intended to achieve its long-term goals

operations strategy

pattern of strategic decisions and actions that set the role, objectives and activities of the operation. It can be used to articulate a vision for the contribution of operations to organisational success

operations strategy content

specific decisions that are taken to achieve specific objectives

operations strategy process

procedure that is used within a business to formulate its strategy

how are the four perspectives of operations strategy reconciled

give a good idea of how the content of operations strategy is developed and how operations excellence can act as a key source of competitive advantage

• operations strategy matrix

• line of fit

• importance-performance matrix

process of operations strategy

• formulation

• implementation

• monitoring and control

formulation

process of clarifying the various objectives and decisions that make up the strategy, and the links between them

monitoring

tracking ongoing performance and diagnosing data to make sure that the changes are proceeding as planned and providing early indications of any deviation from plan

control

evaluation of the results from monitoring so that activities, plans and performance can be assessed with the intention of correcting future action if required

creativity

ability to move beyond conventional ideas, rules or assumptions in order to generate significant new ideas

innovation

the act of introducing something new with potential to be practical and give commercial return

innovation S-curve

impact of innovation over time, slow at first, increasing in impact, then slowing down before levelling off

radical innovation

requires completely new knowledge and/or resources, making existing services and products obsolete

incremental innovation

builds upon existing knowledge and/or resources

concept generation

where innovative ideas become the inspiration for new service or product concepts

ideas come from

inside R&D, staff, competitor activity, customers, open sourcing, crowdsourcing and lead users

concept screening

examining its feasibility, acceptability, and vulnerability in broad terms to ensure that it’s a sensible addition to the company’s service or product portfolio

preliminary design

identification of all the component parts of the service or product and the way they fit together

approaches to reduce design complexity

• standardisation

• commonality

• modularisation

design evaluation and improvement

re-examining the design to see if it can be done in a better way, more cheaply or more easily

best-known tool: quality function deployment (QFD)

prototyping and final design

providing the final details that allow the service or product to be created or delivered

issues to consider for product and service innovation

• understanding capacity requirements

• deciding how much of the innovation process to outsource

• determining technology needs, organisational structure and methods to compress the innovation process

technologies to support innovation process

• computer aided design (CAD)

• digital twins

• knowledge management tecnologies