Operations Management

Chapter 2 : Operations Strategy

Operations Strategy as a Competitive Weapon
Shorter Product life cycle
production flexibility
Low cost process
Convenience and location
product variety and facility size
quality
Elements of Operations Strategy
Designing the Production System
Product/service Design and Development
Technology Selection and Process Development
Allocation of Resources to Strategic Alternatives
Facility Planning
Developing an Operations Strategy

Chapter Summary

In the face of global competition, many Indian manufacturers suffered declining sales, market share, and profitability, during the early 1990s. One of the main reasons for this decline was the ineffectiveness of the operations strategy. Managers now realize the significance of operations strategies and are using them as competitive weapons.

Operations strategy, in general, involves planning, allocation of resources i.e. man, material and machine to gain competitive advantage.
A firm's overall competitive position is influenced by both external factors like social, political, legal and technological factors, and internal factors like employee skills, product range, technical expertise, infrastructure, and financial position.

So, operations managers should be conversant with both internal and external situations. In the past, managers concentrated most of their efforts on finance and marketing strategies. However, companies started recognizing the significance of operations strategies. Wickham Skinner, a Harvard Professor opined - “A firm lacking proper operations strategy is like an anchored ship.

Finance, design, and marketing may set the rudder and expect the ship to steam off, but with anchor set, the ship won't move, or moves reluctantly, dragging its burden.” In this chapter we have discussed the basics of operations strategy, and the competitive advantage an organization can gain by aligning operations planning with strategic planning.

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