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Operations Strategy

Week 1

Agenda

• Introduction (3 minutes) • Review of Syllabus (30 minutes)

• How to succeed in analyses/exercises • Final analysis paper

• Rules of Engagement (5 minutes) • Online Meetings and Learning (20 minutes) • Mid-semester and End of Semester Evaluations (2 minutes) • Lecture & In-Class Exercises (50 minutes)

• Introduction to Operations Strategy • Assignments for Week (5 minutes)

Introduction

Review of Syllabus

How to Success in Analyses/Final Analysis

5 Components to be Successful at Case Studies

1. The Hidden Problem 2. The Decision Matrix 3. The Finances 4. The Implementation Plan 5. Risks and Mitigation

The Hidden Problem

Typically, a case has two problems. There will be a primary problem, and the “hidden” problem. The hidden problem will not explicitly be stated in the case, but it is what we are really looking to answer. Targeting this hidden problem will make your analysis move from good to great.

The Decision Matrix

Most cases will provide multiple alternative solutions, and you should present more than one option that you considered on the road to attaining a solution. A combination of the following can help you get to a decision that will lead to your recommendation: • Pros & Cons. It is imperative to convey the pros and cons for each alternative

before reaching a final decision. This will help us understand your thought process and reasoning behind your final recommendation. • Decision Matrix. A decision matrix combines your options; it compares 3-5

important qualities that the case might outline (using class concepts, for example, 4 V’s, 4 Perspectives, Pareto Charts, ROI, feasibility, cost, or time to implement).

The Finances

No matter what type of case you are analyzing, numbers and finances are always expected in your analysis – regardless of the discipline. You are expected to make inferences about the expenses your solution requires based on general knowledge, your own experiences, and what you’ve learned in your program. As long as the finances you provide have support, they will most likely be considered a viable solution.

The Implementation Plan

The implementation plan will most likely be the largest portion of your analysis. The implementation plan should include the “who, what, when, where, why and how” of your recommended solution. It is a good idea to break your content down in a timeline – both short term (1-5 years), and long term (6-20 years).

Risks and Mitigation

Any solution has associated risks, however, in your analysis, it is important to describe how you plan to mitigate them. First, identify 2- 4 major risks associated with your possible solution, then provide ways to minimize/eliminate them. Imagine what types of questions you might be asked about the risks, and think about how to answer the potential questions when writing your analysis.

Rules of Engagement

Expectations of Behavior

In this course, I’d like our discussions to be informed, respectful, thoughtful, and engaged. This is a very discussion-based course where participation will be key to the course content and experience.

What are the ground rules we should follow to make this happen?

Source: www.teachingcenter.wustl.edu

Expectations of Behavior • 100% attendance; no missed classes. • Everyone participates with video ON; if you do not want to share your location please use a background image • Show respect for others • Respect the speaker, even when you do not agree with or respect the point the speaker is making • List carefully; do not interrupt, even when you are excited to respond • Try not to generalize about groups (even groups you identify with) and do not ask another person to speak as a representative of a

group • Keep an open mind; enter the classroom dialogue with the expectation of learning something new. Look forward to learning about

and being challenged by ideas, questions, and points of view that are different from your own! • Do not monopolize the conversation; give others a chance to contribute to the discussion • Support an atmosphere of learning and group. Approach discussions as an opportunity to ”think out loud”. Allow yourself and

others to revise and clarify ideas and positions in response to new information and insights.

Source: www.teachingcenter.wustl.edu

Expectations of Behavior

• Raise ideas, perspectives or solutions that you think have not been adequately or not yet raised.

• Support your arguments with evidence and examples. • Try not to make assumptions; ask questions to learn more about others perspectives,

especially those that are different from your own. • Talk with me if there are patterns in the discussion that are troubling or that are

impeding full engagement by you or others. • Do not bully fellow students:

• Defined as repeated and/or aggressive behavior likely to intimidate or intentionally hurt, control or diminish another person, physically or mentally (that is not speech or conduct otherwise protected by the 1st amendment)

• Do not plagiarize • Do not harass fellow students or the professor

Source: www.teachingcenter.wustl.edu

Online Meetings & Learning

What happens when your team goes 100% remote?

Common Challenges

• Lack of face-to-face interaction • The social aspect of work • Lack of face-to-face supervision • Reduced access to managerial support and communication • Remote managers may be thought of as being “out of touch” with employee needs

• Lack of access to information • Added time and effort needed to locate information from coworkers • Getting answers to simple questions • Lack of “mutual knowledge” translates to lower willingness to give coworkers the

benefit of the doubt in difficult situations

Common Challenges

• Social isolation • Distractions at home • Kids • Pets • Sitting on a sofa/living room floor/bed! • Ensure that you have dedicated work space!

• Lack of communication with Customers

How to Support Remote Employees • Established structured daily check ins • Provide several different technology communication options

• Email • Chat/messaging functionality – good for simpler, less formal conversations and time-

sensitive communications • Adopt tools your team is already using • Embrace all kinds of IM’s – but set ground rules • Respect work/life balance • Promote face-to-face communication too!

• Video – gives participants many of the visual cues that they have if they were face- to-face & provides increased “mutual knowledge”, helps reduce the sense of isolation, good for sensitive or complex conversations

Presenting Remotely

• Make it personal • Convey warmth and presence • Get used to delayed feedback • Make it interactive

Successful Learning Remotely

• Dress as if you are in the Classroom • Keep your microphone muted unless asking a question or engaging in discussion • Keep your video ON throughout the entire class • Check your video and audio when entering your class session • Think background, minimize distractions around you • Look into the camera instead of looking at the screen • Type quietly, mute is necessary • Don’t eat during a Zoom class session • Focus on Class

How to Run a Great Virtual Meeting

How to Run a Great Virtual Meeting • Use video • Always provide a dial-in option • Test the technology ahead of time • Make sure faces are visible

• Participants must sit close to their webcam to help recreate the intimacy of an in-person meeting

• Stick to the basics – set clear objectives, use an agenda, set meeting ground rules, take breaks, clearly outline next steps/timing/accountability after each section & at the end of the meeting

• Minimize presentation length • Use an icebreaker • Assign a facilitator • Call on people • Capture real-time feedback • Don’t be afraid to tackle tough issues • Practice once or twice while you are

still together

Making Team Meetings Less Remote • Point your camera out the window

Making Team Meetings Less Remote • Desk Show and Tell

Making Team Meetings Less Remote • Two truths and a lie

Making Team Meetings Less Remote • Team Coffee or Team Lunch • Eating together promotes bonding!

Making Team Meetings Less Remote • Practice your elevator pitch in 30 seconds or less!

Mid-semester and End of Semester Evaluations

Introduction to Operations Strategy

Key Questions

• Why is operations excellence fundamental to success? • What is strategy? • What is operations strategy and how is it different from operations management? • How should operations strategy reflect overall strategy? • How can operations strategy learn from operational experience? • How do the requirements of the market influence operations strategy? • How can the intrinsic capabilities of an operation’s resources influence operations

strategy? • What is the “content” of operations strategy? • What is the “process” of operations strategy? • How is operations strategy developing?

All operations transform input resources into products and services

Transformed resources

Transforming resources

People Facilities (technology, buildings, etc.)

Materials Information Customers

Transforming resources (people, facilities) are organised to form processes

Products and services

Transformed resources (materials, information, customers) have value added as they move through the operation’s processes

Figure 1.1 All operations transform input resources into products and services Source: Slack and Lewis, Operations Strategy PowerPoints on the Web, 4th edition © Pearson Education Limited 2015

Operations management and strategy requires analysis at three levels

Flow between operations Analysis at the level of the supply network

Analysis at the level of the operation

Flow between processes

Analysis at the level of the process

Flow between resources

Strategic analysis

Operational analysis

Figure 1.2 The hierarchy of operations describes networks at different levels of analysis. Three are illustrated here: the supply network, the operation and the process

Source: Slack and Lewis, Operations Strategy PowerPoints on the Web, 4th edition © Pearson Education Limited 2015

Operations strategy is…

‘… the total pattern of decisions …

… whilst managing the risks of misalignment’.

… through the on-going reconciliation of market requirements and operations resources …

… and their contribution to overall strategy…

… of any type of operation ... … that shape the long-term capabilities …

… so as to achieve a sustainable fit between the two …

Source: Slack and Lewis, Operations Strategy PowerPoints on the Web, 4th edition © Pearson Education Limited 2015

The Four Vs analysis for a conventional supermarket and Ocado

VolumeHigh Low

VarietyHigh Low

VariationHigh Low

VisibilityHigh Low

OcadoConventional supermarket

Figure 1.4 The Four Vs analysis for a conventional supermarket and for Ocado Source: Slack and Lewis, Operations Strategy PowerPoints on the Web, 4th edition © Pearson Education Limited 2015

In-Class Exercise

• 4 V’s for: • Nike • Whole Foods • Trader Joes

How is operations strategy different from operations management?

Timescale e.g. capacity decisions

D em

an d

1–12 months

Short-term

Operations management

Long-term

D em

an d

1–10 years

Operations strategy

Source: Slack and Lewis, Operations Strategy PowerPoints on the Web, 4th edition © Pearson Education Limited 2015

How is operations strategy different from operations management?

Level of analysis Concerned with the macro operation (level of the firm)

Micro

Operations management

Macro

Operations strategy

Source: Slack and Lewis, Operations Strategy PowerPoints on the Web, 4th edition © Pearson Education Limited 2015

How is operations strategy different from operations management?

Level of aggregation Concerned with resources at an aggregated level

Detailed

Operations management

Aggregated

Operations strategy

‘Can we give tax services to the small business market in Antwerp?’

‘What is overall business advice capability compared with other capabilities?’

Source: Slack and Lewis, Operations Strategy PowerPoints on the Web, 4th edition © Pearson Education Limited 2015

How is operations strategy different from operations management?

Level of abstraction Concerned with the conceptual

Concrete

Operations management

Philosophical

Operations strategy

‘How do we improve our purchasing procedures?’

‘Should we develop strategic alliances with suppliers?’

Source: Slack and Lewis, Operations Strategy PowerPoints on the Web, 4th edition © Pearson Education Limited 2015

The sectorial scope of Operations Management

Products or services?

Manufacturing or non-manufacturing?

What is Operations Strategy about?

For profit or not-for-profit?

Source: Slack and Lewis, Operations Strategy PowerPoints on the Web, 4th edition © Pearson Education Limited 2015

The relationship between the concepts of “the business model” and the “operating model”

Operations Strategy: INTG1-GC2115 Week 1

Operational Operations

Operational Finance

Marketing strategy Operations strategyFinance strategy Technology strategy

The ‘business model’

The ‘operating model’

Business strategy

Functional strategies

Operational Marketing

Operational Technology

…sets the overall purpose and objectives for…

…defines how the business model will be achieved…

Figure 1.14 The relationship between the concepts of the ‘business model’ and the ‘operating model’ Source: Slack and Lewis, Operations Strategy PowerPoints on the Web, 4th edition © Pearson Education Limited 2015

The four perspectives on operations strategy – top-down, bottom-up, market requirements, and operations resources

Top-down

Operations strategy should interpret higher level strategy

Operations resources

Operations strategy should build operations capabilities

Bottom-up

Operations strategy should learn from day-to-day experiences

Market requirements

Operations strategy should satisfy the organisation’s markets

OPERATIONS STRATEGY

Figure 1.5 Four perspectives on operations strategy: top-down, bottom-up, market requirements and operations resources

Source: Slack and Lewis, Operations Strategy PowerPoints on the Web, 4th edition © Pearson Education Limited 2015

The four perspectives on operations strategy – top-down, bottom-up, market requirements, and operations resources

Top-down

Bottom-up

Corporate strategy

Business strategy

Emergent sense of what the strategy should be

Operational experience

Operations resources

Capacity Supply networks Process technology Development and organisation

Market requirements

Quality Speed

Dependability Flexibility

Cost

Source: Slack and Lewis, Operations Strategy PowerPoints on the Web, 4th edition © Pearson Education Limited 2015

Top-down and bottom-up perspectives of strategy for the metrology company

Corporate objectives impact on business objectives which, in turn, influence operations strategy

To p-

do w

Corporate strategy

Business strategy

Bo tt

om -u

pDay-to-day experience of providing products and services to the market reveals problems and potential solutions which become formalised into operations strategy

Emergent sense of what the strategy should be

Operational experience

Operations strategy

Figure 1.6 Top-down and bottom-up perspectives of strategy for a metrology company

Source: Slack and Lewis, Operations Strategy PowerPoints on the Web, 4th edition © Pearson Education Limited 2015

Top-down and bottom-up perspectives of strategy for the metrology company

Corporate objectives impact on business objectives which, in turn, influence operations strategy

To p-

do w

Group building corporate capability in high technology products and services

Metrology division competes on “fast-to-market” innovations

Bo tt

om -u

pDay-to-day experience of providing products and services to the market reveals problems and potential solutions which become formalised into operations strategy

Experiment with “modular” design of key products and components

Customers confused by continual product innovation and costs are increasing

Operations must have fast and flexible technology, supply relationships, process and staff

Modular strategy provides flexibility and innovation at relatively low costs

Figure 1.6 Top-down and bottom-up perspectives of strategy for a metrology company

Operations strategy reconciles the requirements of the market with the capabilities of operations resources

Operations resources

Market requirements

Strategic reconciliation

Operations strategy

Operations strategy reconciles the requirement of the market with the capabilities of operations resources

Tangible and intangible resources

Operations capabilities

Operations processes

Operations strategy decision areas

Customer needs

Market positioning

Competitors’ actions

Performance objectives

Understanding resources and processes

Strategic decisions Capacity Supply networks Process technology Development and organisation

Required performance Quality Speed Dependability Flexibility Cost

Understanding markets

Figure 1.9 Operations strategy is the strategic reconciliation of market requirements with operations resources

The “market requirements” and “operations resource” analysis of a lighting company

Resources Equipment Staff Reputation Relationships (internal and external) Experience

Capabilities Application of leading edge lighting and sound technology Articulation of client requirements

Processes Integration of equipment supply and client requirements Design process Supplier liaison process

Operations strategy decisions

Location Virtual reality technology Supplier development Equipment tracking system Organisational structure Staff meetings

Customers Professional theatres (static, low margins) Exhibitions (slow growth, low margins) Conferences, etc. (fast growth, higher margins

Market position Traditionally differentiated on high service level in theatre and exhibition markets, innovation and service in conference market

Competitors Big groups dominating professional theatres In-house operations growing in exhibitions market Conference market still fragmented

Performance objectives

Aesthetically innovative designs Presentation advice High customisation of lighting solutions Fast and dependable supply

Figure 1.7 The ‘market requirements’ and ‘operations resources’ analysis of a theatre lighting company Source: Slack and Lewis, Operations Strategy PowerPoints on the Web, 4th edition © Pearson Education Limited 2015

The market perspective analysis of a garment company

PERFORMANCE OBJECTIVES MARKET POSITION Differentiation on:

CUSTOMERS Segmentation on:

Age – youth Purpose – general

COMPETITORS Traditionally weak in:

Innovative products Time to market Product range Coordinated launches

Promotion Design innovation

Dependability Speed of delivery Product mix flexibility Speed to market

The operations resource perspective analysis of the lighting company

Capabilities

Resources • Tangible: Equipment

Staff

Processes

Reputation Relationships (internal and external) Experience

• Intangible:

• Application of leading-edge lighting and sound technology • Articulation of client requirements

• Integration of equipment supply and client requirements • Design process • Supplier liaison process

Operations strategy decisions

• Location

• Virtual reality technology

• Supplier development

• Equipment tracking systems

• Organisational structure

• Staff meetings

In-Class Exercise

• In your groups, create the 4 perspectives for a company

What you HAVE

in terms of operations capabilities

What you NEED

to ‘compete’ in the market

Operations resources

Market requirements

What you WANT

from your operations to

help you ‘compete’

What you DO

to maintain your capabilities and satisfy markets

Strategic reconciliation

Operations Strategy…

‘… the decisions which shape the long-term capabilities of the company’s operations and their contribution to overall strategy through the on- going reconciliation of market requirements and operations resources …’

In-Class Exercise

• We will, as a group, discuss and build the following for Whole Foods and Trader Joe’s: • 4V’s • 4 Perspectives • Operations Strategy Matrix

Topic Assignment #1 Post to NYUClasses by 3pm on 2/3/2020

Topic Assignment #1

Using 1 or more of the concepts reviewed in class today, apply them to your final project company.

This is a 1-2 page assignment. Please post in MS-DOC format.