Operation

Key Learning Points

The concept of operations strategy plays an important role in determining the overall long term success of an organization. Developing an operations strategy means looking to new ways to add value for the customer in the goods and services that the firm produces and delivers. Strategy in a business organization is essentially about how the organization seeks to survive and prosper within its environment over the long-term. Strategy can exist at three levels in an organization: corporate, business and functional. An organization’s operations strategy comprises the totality of the actions and decisions taken within the operations function. The decisions and actions taken have a direct impact on an organization’s business and corporate strategy. Managers must therefore align the operations strategy of their firm with the strategies of other functional areas and with the firm’s overall business strategy. To properly implement these strategies, managers need to clearly understand the core capabilities of their firm and focus their resources on maintaining and improving these capabilities. Successful firms today are looking to develop strategies that integrate goods and services into a single product offering or “bundle of benefits,” which attempts to solve problems for customers rather than just selling them products. An organization’s operations can be a source of competitive advantage if they are managed strategically in pursuit of a clear goal for operations. The way in which an organization secures, deploys and utilizes its resources will determine the extent to which it can successfully pursue specific performance objectives. There are five operations performance objectives: 1 Cost: The ability to produce at low cost.2 Quality: The ability to produce in accordance with specification and without error. 3 Speed: The ability to do things quickly in response to customer demands and thereby offer short lead times between when a customer orders a...