supply chain- BA Level 2400 words
Applewatts
Ch2_OperationsStrategy_L6-2.ppt
Operations Strategy
Alex Hill and Terry Hill
Learning objectives
- Understand LEVELS of strategy within business
- Distinguish between day-to-day and strategic ROLES
- Identify how different levels of strategy INTERFACE with each other
- Appreciate importance of understanding MARKETS
- Understand different strategic APPROACHES
- DEVELOP and IMPLEMENT an operations strategy
Lecture outline
- INTRODUCTION
- What is STRATEGY?
- LEVELS of strategy within a business
- DEVELOPING a strategy
- IMPLEMENTING a strategy
- Critical REFLECTIONS
- SUMMARY
What is strategy?
DIRECTION
WHAT to do
What is strategy?
HOW to do it
IMPLEMENTATION
DIRECTION
WHAT to do
| > | KEY IDEA |
| Operations strategy concerns developing the CAPABILITIES of an organisation to reflect the NEEDS of its customers and markets |
Levels of strategy
CORPORATE
Levels of strategy
CORPORATE
BUSINESS UNIT
FUNCTIONAL
Levels of strategy
CORPORATE
BUSINESS UNIT
Corporate
DIRECTION OF TOTAL BUSINESS
IMPLEMENTATION
Levels of strategy
Where to INVEST or DIVEST
SALES REVENUE priorities
Allocation of investment FUNDS
DIRECTION OF BUSINESS UNIT
Levels of strategy
Business unit
MARKETS in which it competes
Where to GROW its business
Nature of COMPETITION
Relevant COMPETITIVE CRITERIA
WHICH functional tasks to invest in
HOW to invest in these tasks
IMPLEMENTATION
DIRECTION OF FUNCTION
Levels of strategy
Functional
IMPLEMENTATION
Support COMPETITIVE DIMENSIONS within a market for which it is solely
or partly RESPONSIBLE
Meeting competitive REQUIREMENTS
Selecting APPROACHES to attain improvement goals
Implement the PLAN
Levels of strategy
Functional
Levels of strategy
Functional
Developing a strategy
Developing a strategy
Developing a strategy
Developing a strategy
| > | KEY IDEA |
| Understanding MARKETS is the FIRST step in strategy development |
Developing a strategy
Understanding customer requirements
| > | KEY IDEA |
| Customer PURCHASES are not only based on the service or product specification, but also a wide RANGE of CRITERIA such as price, delivery speed and quality conformance |
Developing a strategy
Understanding customer requirements
QUALIFIERS
ORDER-WINNERS
WIN you the order once
you are on the shortlist
Get and keep a service or product on
a customer’s SHORTLIST
| > | KEY IDEA |
| Understanding CUSTOMER requirements: AVOID general descriptions IDENTIFY and WEIGHT order-winners and qualifiers |
| > | KEY IDEA |
| All functions must be involved in the discussion on HOW to GAIN, RETAIN and GROW CUSTOMERS and MARKETS |
A recap of the operations process is valuable at this point
Developing a strategy
Operations process
| Operations process | Pit stop | Factory | Restaurant |
| TRANSFORMED resources | Materials Information Customers | ||
| TRANSFORMING resources | Facilities Staff | ||
| OUTPUTS | Goods Services |
This table can be used to frame a discussion, or printed for students to fill in during the clips
Developing a strategy
Understanding customer requirements
| Key market requirements | Pit stop | Factory | Restaurant |
| ORDER-WINNERS | |||
| QUALIFIERS |
This table can be used to frame a discussion, or printed for students to fill in during the clips
Developing a strategy
- What is the OPERATIONS process?
- What are the key MARKET requirements?
[play the clips from Le Mans, Modern Times and Dinner Rush]
While students are watching the clips, ask them to think about the questions shown above
Developing a strategy
Operations process
| Operations process | Pit stop | Factory | Restaurant |
| TRANSFORMED resources | Materials Information Customers | ||
| TRANSFORMING resources | Facilities Staff | ||
| OUTPUTS | Goods Services |
- Car
- Rain tyres
- Raw material
- Pit stop
- Mechanics
- Spanners
- Car with
- rain tyres
- Factory
- Production line
- Operator
- Spanner
- Widget
- Raw material
- Order details
- Customer
- Restaurant
- Kitchen
- Equipment
- Chef
- Waiter
- Food
- Drink
- Service
Developing a strategy
Operations process
| Operations process | Pit stop | Factory | Restaurant |
| TRANSFORMED resources | Materials Information Customers | ||
| TRANSFORMING resources | Facilities Staff | ||
| OUTPUTS | Goods Services |
Developing a strategy
Understanding customer requirements
| Key market requirements | Pit stop | Factory | Restaurant |
| ORDER-WINNERS | Delivery speed | Price | Product design Service design |
| QUALIFIERS | Delivery reliability Quality conformance Price | Quality conformance | Quality conformance Delivery reliability Price |
Developing a strategy
Understanding customer requirements
| > | KEY IDEA |
| Understanding CUSTOMER requirements: AVOID general descriptions IDENTIFY and WEIGHT order-winners and qualifiers |
What is strategy?
DIRECTION
WHAT to do
What is strategy?
HOW to do it
IMPLEMENTATION
DIRECTION
WHAT to do
Developing a strategy
The process of strategy development
Developing a strategy
The process of strategy development
Developing a strategy
The process of strategy development
| > | KEY IDEA |
| Understanding MARKETS is DIFFICULT Identifying SOLUTIONS is EASY Making it HAPPEN is DIFFICULT |
Developing a strategy
The process of strategy development
Developing a strategy
The process of strategy development
Developing a strategy
The process of strategy development
Alternative APPROACHES
- TOP-DOWN vs BOTTOM-UP
- MARKET-DRIVEN vs MARKET-DRIVING
Developing a strategy
Top-down approach
FUNCTIONAL
CORPORATE
BUSINESS UNIT
Day-to-day EXPERIENCES and LEARNING
Consolidated into formal STRATEGY
Developing a strategy
Bottom-up approach
EMERGING sense of what strategy should be
Developing a strategy
Market-led orientation
MARKET DRIVES OPERATIONS
MARKET
OPERATIONS
Developing a strategy
Market-driving orientation
OPERATIONS DRIVES MARKET
MARKET
OPERATIONS
Developing a strategy
Alternative approaches
- What are their strategic OBJECTIVES?
- What is their STRATEGY to achieve these objectives?
- What APPROACH has been used to develop and implement this strategy?
Ask students to think about the three points above while watching the clip from each film
Developing a strategy
Alternative approaches
| Aspect | Prison Camp | Restaurant |
| Strategic OBJECTIVES | ||
| STRATEGY for meeting these objectives | ||
| PROCESS of developing and implementing strategy |
Developing a strategy
Alternative approaches
| Aspect | Prison Camp | Restaurant |
| Strategic OBJECTIVES | ESCAPE from the camp Get 250 men out | Make MONEY Produce GOOD FOOD |
| STRATEGY for meeting these objectives | Create SMOKE SCREEN DIG 3 TUNNELS | PRIMO Market-driving Resource-based CRISTIANO Market-driven Market-led |
| PROCESS of developing and implementing strategy | TOP-DOWN PLANNED | BOTTOM UP EMERGENT |
Critical reflections
- Operations helps gain FIRST sale whilst also securing the SECOND sale
- MARKET or marketing-led?
- Moving to a BUSINESS-LEVEL strategic debate
Critical reflections
| > | KEY IDEA |
| Operations help GAIN first sale Whilst SECURING second sale |
Summary
- What is STRATEGY?
- Direction and Implementation
- LEVELS of strategy
- Corporate - Business - Functional
- Strategy DEVELOPMENT
- Understand market
- Develop capability to support or drive market
- Market REQUIREMENTS
- Order-winners and Qualifiers
- APPROACH to developing strategy
- Top down vs Bottom up
- Market-led vs Resource-based
