Unit 1

Operations Strategy

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 The Role of Operations Strategy

 Provide a plan that makes best use of resources

which;
 Specifies the policies and plans for using organizational
resources
 Supports Business Strategy as shown on next slide

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Business/Functional Strategy

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 Importance of Operations Strategy

 Companies often do not understand the differences

between operational efficiency and strategy
 Operational efficiency is performing tasks well, even better
than competitors
 Strategy is a plan for competing in the marketplace
 Operations strategy is to ensure all tasks performed
are the right tasks

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 Developing a Business Strategy

 A business strategy is developed after taking into

many factors and following some strategic decisions
such as;
 What business is the company in (mission)
 Analyzing and understanding the market (environmental
scanning)
 Identifying the companies strengths (core competencies)

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Three Inputs to a Business Strategy

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 Examples from Strategies

 Mission: Dell Computer- “to be the most

successful computer company in the world”
 Environmental Scanning: political trends, social
trends, economic trends, market place trends, global
trends
 Core Competencies: strength of workers, modern
facilities, market understanding, best technologies,
financial know-how, logistics

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 Developing an Operations Strategy

 Operations Strategy is a plan for the design and

management of operations functions
 Operation Strategy developed after the business
strategy
 Operations Strategy focuses on specific capabilities
which give it a competitive edge – competitive
priorities.

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Operations Strategy – Designing the
Operations Function

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 Competitive Priorities- The Edge

 Four Important Operations Questions: Will you

compete on –
Cost?
Quality?
Time?
Flexibility?
 All of the above? Some? Tradeoffs?

10
 Operations Strategy Across
the Organization
 Business strategy defines long-term plan
 Operations strategy support the business strategy
 Marketing strategy needs to fully understand
operations capability
 Financial plans in effect support operations activities.

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