oper ati ons st rat eg y an d comp

8/14/2019 Oper Ati Ons St Rat Eg y an d Comp

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OPER ATI ONS STRAT EGY AN DCOMP ETIT IV ENE

SSPresented by:

Abhishek Gupta

Sagun Bajaj

Priyanka Bakhshi


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The Role of Business

Strategy Provides a plan (business strategy) making

the best use of resources that:

Defines the long-range plan to compete in themarketplace

Helps to differentiate the firm from competitors

Provides a game plan upon which functionalstrategies are developed

Focuses on doing the right tasks


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Business/Functional Strategy


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Service-enhanced

Product or

Delivered Service

Policy

Satisfied Customer

Corporate Strategy

Focus: Survival

Business StrategyFocus: Distinctive Competence

Cost Leadership

Product Differentiation

Focus (cost or differentiation)

Operations Strategy

Focus: Competitive PrioritiesCost Flexibility Quality Delivery

ImplementationCapability Building

Resources

Process ProductStructure Infrastructure

Other Functional

StrategiesMarketing

Finance

Human Resources

Engineering

Information Systems


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Competitive Priorities- The Edge

Four Important Operations Questions: Willyou compete on

Cost?

Quality?

Time?

Flexibility?

All of the above?

Some?

Tradeoffs?


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Competing on Cost?

Offering products/services at a low pricerelative to competitors. Typically high volume products

Often limit product range & offer littlecustomization

May invest in automation to reduce unit costs

Can use lower skill labor

Probably use product focused layouts

Low cost should not mean low quality


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Competing on Quality?

Quality is sometimes subjective Quality may be defined differently by customers

versus employees Quality dimensions:

High performance design: Superior features, high durability, & excellent customer service Product & service consistency:

Meets design specifications Close tolerances Error free delivery

Quality issues to address: Product design quality products/services must meet

requirements Process quality will produce error-free products/services


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Competing on Time?

Time is one of the most importantcompetitive priorities

Being first-to-deliver often wins the race Time related issues:

Fast delivery: Focused on shorter time between order placement and

delivery

On-time delivery: Deliver product exactly when needed every time

Rapid development speed Using concurrent processes to shorten product development

time


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Competing on Flexibility?

The companys environment often changesrapidly

Flexibility is needed to accommodate these

changes Product flexibility:

Easily switch production from one item to another

Easily customize product/service to meet specific

requirements of a customer Volume flexibility:

Ability to ramp production up and down to match market

demands


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Are There Priority Tradeoffs?

Emphasize priorities that support the business strategy, which may requiretrade-offs

Focus on order qualifiers and order winners Which priorities are Order Qualifiers? e.g. Must have excellent quality since everyone expects it Which priorities are Order Winners?

e.g. Southwest Airlines competes on cost McDonalds competes on consistency FedEx competes on speed Custom tailors compete on flexibility Can you have both high quality and low cost? e.g. Yes, Coke and Pepsi are good examples Can you offerdesign flexibility and short delivery? e.g. Yes, modular housing manufacturers do it


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Productivity: Definition

Productivity is the relationship betweenthe Outputs generated from a system andthe Inputs that are used to create those

outputs. Mathematically

PO

I

=


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Measuring Productivity

Productivity is a measure of how efficiently inputs are converted tooutputs

Productivity = output/input

Total Productivity Measure

Total Productivity = $sales/inputs $

Partial Productivity Measure

Partial Productivity = cars/employee

Multifactor Productivity MeasureMulti-factor Productivity = sales/total $costs


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Competing on Productivity

At the national level, growing productivity

leads to a higher standard of living

holds inflation in check

enhances international competitiveness.

The annual growth in GDP is due to

growth in productivity

growth in inflation

(Macroeconomic Theory)


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Productivity Portfolios

Investments in facilities and equipment

Investments in programs and systems

Investments in people.

(Note: these alternatives are not mutually

exclusive; however, most organizationstend to choose one as their dominant

orientation.)


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ARAVIND

EYE CARESYSTEM


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OVERVIEW

AECS - Founded in 1976 by

Dr. Govinda Venkataswamy

in Madurai

Goal Offer quality care atreasonable cost

In 2004, it performed 2,30,000eye surgeries and handled16,40,000 patient visits

MissionTo eradicate needlessblindness by providing appropriate, compassionate andquality eye care for all


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STRATEGY USED

Art of MASS MARKETING Speedy and fast Division of

Work Quality Care & Productivity

at prices that everyone canafford

Core Principle Providingservices to rich and pooralike

Large Volume Care andWell organized system

Organizing Camps


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oper ati ons st rat eg y an d comp

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