3 Operations Strategy

7/23/2019 3 Operations Strategy

1/35

2012 Lew Hofmann

Operations Strategy


2/35

2012 Lew Hofmann

Sonoco Products

Co.

Using Operations Strategy Founded in 1899, it is a $4.1 billion global manufacturer of

industrial and consumer roducts and ro!ider of ac"agingser!ices to customers in 8# nations at # locations.

%t &as 121 manufacturing lants in 'ort& (merica.

)trateg* %s +e*. ne !er* successful oerations strateg* wast&at it located in countries wit& fa!orable ta- laws.

(not&er rofitable strateg*. %t too" ad!antage of e-c&ange ratedifferences and a wea"ening dollar.

oing green/ Hea!il* into t&e rec*cling business and reducingits emissions and energ* use.

'amed b* ororate esonsibilit* fficer 3 magaineas one of 20095s 100 6est ororate itiens.


3/35

2012 Lew Hofmann

Operations Strategy

Operations strategyfocuses on &ow a firm7soerations function oerations area3 can bestcontribute to t&e organiation7s o!erall strateg*.

( firm7s operations function is it7s "e* business.

Operations strategy lin"s long:term ands&ort:term oerations decisions to corporate

strategy. Operations strategy is how you manage the

firms operations processes to add value.


4/35

2012 Lew Hofmann

Operations Strategy

Corporate strategy;iews t&e organiation as a s*stem of interconnected arts,

eac& wor"ing wit& t&e ot&ers to ac&ie!e desired goals.

Operations Strategy)uorts t&e cororate strateg*.

e


5/35

2012 Lew Hofmann

Developing a

Corporate Strategy

Developinga corporate strategy

involves three considerations:

1. %dentif*ing a coman*7s Strengt&s andWea"nesses.

2. >onitoring t&e en!ironment for trends,

Oortunities ? T&reats.. @e!eloing t&e core competencies

S.W.O.T.


6/35

2012 Lew Hofmann

Core Competencies

Core Competenciesare t&e uni


7/35

2012 Lew Hofmann

Core Processes

%nuts =ransformation ututs

Supplier Relations Customer Relations

Developing ew

Products and Services

illing

Customer Orders

Core Processes usually include:

>ost firms &a!e all of t&ese but focus on a subset of t&em,as determined b* its core cometencies w&at it7s good at3.


8/35

2012 Lew Hofmann

"lobal Strategies

glo!al strategyma* include bu*ing foreignser!ices or arts, andCor entering or e-andingforeign mar"ets.

=wo oular global strategies are/

". Strategic lliances wit& foreign comanies

a3 ollaborati!e efforts

b3 Doint !entures

c3 =ec&nolog* licensing

#. $ocating and operating a!road


9/35

2012 Lew Hofmann

#arket $nalysis

( %ar&et nalysisidentifies *our customersand t&eir needs.

%t is accomlis&ed in two arts/

". %ar&et Segmentation: %dentif*ing grous ofcustomers wit& enoug& in common to warrantde!eloing ser!ices andCor roducts for t&em.

#. 'eeds ssessment:%dentif*ing t&e needs ofeac& mar"et segment. 'eeds include suc&t&ings as/ )er!ice or roduct needs @eli!er* s*stem needs ;olume needs


10/35

2012 Lew Hofmann

rriving at the

Competitive Priorities

rriving at the


Competitive priorities cost (uality time

fle)i!ility

Competitive priorities cost (uality time

fle)i!ility

%ar&et analysis segmentation needs analysis

%ar&et analysis segmentation needs analysis

Corporate Strategy environmental scanning core competencies core processes

glo!al strategies

Corporate Strategy environmental scanning core competencies core processes

glo!al strategies

E elations&is wit& ustomers

E elations&is wit& )uliers

E @e!eloing new roducts and ser!icesE Filling rders

).A..=.


11/35

2012 Lew Hofmann

Competitive Priorities COST Low ost3

*+$,TY

Hig&:erformance @esign

onsistent Gualit*

T,%- Fast @eli!er*

n:time deli!er*

@e!eloment seed

$-/,0,$,TY

ustomiation

;ariet*

;olume Fle-ibilit*

Most valued

by firmsbuying from

other firms


12/35

2012 Lew Hofmann

%aw o&


F()=

H(

@Pic& any two1 %f *ou can ma"e it fast and c&ea,good and c&ea, or fast and good, *ou will be

!er* cometiti!e.>an* comanies do one of t&ese, but t&e

reall* good ones e-cel in two of t&ese areas.


13/35

2012 Lew Hofmann

Competitive Capabilities

( firm7s Competitive Capa!ilitiesare t&ecometiti!e riorities t&at a firm actually

possesses and is able to deliver. ( coman* ma* not be caable of doing well

in all cometiti!e riorit* areascostC


14/35

2012 Lew Hofmann

Competing on Cost

$ow Costmeans deli!ering a ser!ice orroduct at t&e lowest ossible cost to t&e

satisfaction of t&e customer.

For most roducts and ser!ices, low cost and&ig&


15/35

2012 Lew Hofmann

Top *uality/ @eli!ering an outstandingser!ice or roduct. onsiderable interaction wit& t&e customers

ma* be re


16/35

2012 Lew Hofmann

(imeas a

Competitive Capability

Delivery Speedis


17/35

2012 Lew Hofmann

Customi2ationmeans satisf*ing t&e uni


18/35

2012 Lew Hofmann

orthrop "rumman

ewport ews Ship *uilding

=&e world7s onl* roducer of full:siedaircraft carriers suer carriers3

Long lead timesof 8 *ears or moreoften in!ol!e man* c&anges.

=&eir rocesses &a!e a &ig& degree of

fle-ibilit*to &andle c&anges in design. Fle-ibilit* in wor"force s"ills as well as

rocess fle-ibilit* is necessar*.


19/35

2012 Lew Hofmann

Product Decisions

rocess A&at rocesses s&ould beused to ma"e t&e roductB3

Location A&ere s&ould t&e facilitiesbe locatedB3

La*out How s&ould our facilities be

arrangedB3 aacit*A&at sie facilit*B3


20/35

2012 Lew Hofmann

Service or Product

Development Strategies

Product 3ariety/ ffering a wide assortment. 4esign/ ase of use and desirable features ,nnovation/ =ranslate new tec&nolog* into roducts

Service/ roducts wit& ser!ice ac"ages added

>(+= '=I

%ar&et $eader/ 6eing first to introduce new ser!icesandCor roducts

%iddle of the 5oad/ Aait for t&e leaders to introducenew ser!ices andCor roducts.

$aggard/ Aait to see w&ic& new ser!ices andCorroducts catc& on in t&e mar"et.


21/35

2012 Lew Hofmann

Service Package

( Service Packageis a collection of goodsand ser!ices ro!ided b* a ser!ice rocessto its customers.

=&e ser!ice ac"ages t&at come wit& t&e$200J te-tboo" t&at % didn7t re


22/35

2012 Lew Hofmann

Product %i&e Cycle


23/35

2012 Lew Hofmann

Product Planning ,

Development Phase

Product selection anddesign nalysis @etermine mar"et feasibilit* Gualit* le!el, of models

4evelopment rocess @esign/ M@eciding &ow to ma"e t&e roduct3 )ulier selection/ A&at materials ? arts do we bu*B3 )er!ice ac"age A&at ser!ices s&ould it includeB3

ull $aunch 6egin roduction, mar"eting ? distribution

rocesses


24/35

2012 Lew Hofmann

Development Process

Service or product

not via!le

'eed to rethin&

the idea.

Post6launch

review

4esign

)ecifications arede!eloed for newser!ices or roducts nalysis

( critical re!iew of &owit will be roduced,

resource re


25/35

2012 Lew Hofmann

Concurrent -ngineering

Concurrent -ngineering is Teamwork t&atbrings toget&er roduct engineers, rocessengineers, mar"eters, bu*ers, information

secialists,


26/35

2012 Lew Hofmann

Product

ntroduction Phase

roduct c&anges often occur.

rocess c&anges ma* be

necessar*. )ulier de!eloment, if not done alread*.

roduct &oefull* starts to s&ow rofitabilit*.

erations must &a!e a lot of fle-ibilit* during

t&is &ase. low:!olume, &ig& fle-ibilit*3


27/35

2012 Lew Hofmann

"rowth Phase

roduction caacit* c&anges to "ee uwit& c&anging demand.

Fine tuning roducti!it*

oncern for


28/35

2012 Lew Hofmann

#aturity Phase

rowt& slows and stos

ost control and reduction Competition is heavy, re


29/35

2012 Lew Hofmann

Decline Phase

roduction &ase:down

roduct termination

roduct suort issues roduction &as gone from a low:!olume, &ig&l* fle-ible

oeration introduction3 to a &ig&:!olume, low fle-ibilit*oeration maturit*3 and bac" again to a low:!olume

oeration decline &ase3. =&is re


30/35

2012 Lew Hofmann

%i&e)Cycle $udit

products life cycle is how long the product is on the mar&et.

( $ife6cycle auditis eriodicall* done to determine t&e life:c*cle stageof eac& roduct.

)ome roducts &a!e long life c*cles and ot&ers &a!e s&ort life c*cles.

>ar"eting strateg* and roduction strateg* c&ange wit& eac& life c*cle.

7


31/35

2012 Lew Hofmann

#arket entry0e+it

strategies

arl* ntr* : Late -it %ntroduction t&ru @ecline %arge, innovativemarket leaders wit&

economies of scale for &ig&:!olumecometition.

arl* ntr* : arl* -it %ntroduction t&ru Late rowt& Smaller/ innovative &irms t&at can bring new ideas


32/35

2012 Lew Hofmann

-arly -ntry/ %ate -+itntroduction phase Decline Phase

( common strateg* for large comaniest&at are inno!ati!e and mar"et leaders.

roduction strategies go t&roug& t&eentire sectrum. Low !olume Hig& !olume Low !olume

Hig&:cost roduction Low:cost roduction

Fle-ible roduction %nfle-ible roduction

Low efficienc* Hig& efficienc*


33/35

2012 Lew Hofmann

-arly -ntry/ -arly -+itntroduction phase "rowth phase

)maller, %nno!ati!e firms.

aid de!eloment of new roductions.

@on7t &a!e t&e economies of scale tocomete in a &ig& !olume, low cost,mar"et.

=&e* tend to get boug&t out or t&e* sellor license t&eir atents to largercomanies.


34/35

2012 Lew Hofmann

%ate -ntry/ %ate -+it"rowth Stage Decline Stage

=&e oosite strateg* of t&e earl* entr*,earl* e-it.

=&ese are large firms t&at wait:to:seew&at new roducts or ser!ices are &ot,and t&e* Num in wit& similar roducts.

=&e* ma* manufacture t&e items, bu*out t&e small firms or bu* into t&e firmswit& t&e &ot items.


35/35

2012 Lew Hofmann

Corporate Strategy and 1eyOperations #anagement Decisions

Capa!ilities

Performance8ap7

o

2esOperations strategy

Decisions %anaging Processes %anaging 3alue Chains

ew Service0

Product Development

ew Service0

Product Development

%ar&et analysis

Competitive priorities

Corporate strategyCorporate strategy

3 Operations Strategy

Documents

Transcript of 3 Operations Strategy