INdian Institute of Management, Indore

Operations Strategy

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Roll No. 2014PGP399

A business strategy is a plan or set of intentions that will set the long-term direction of the actions that are needed to ensure future organizational success. However, an organization’s strategy can only become a meaningful reality, in practice, if it is operationally enacted. The relationship between an organization’s strategy and its operations is a key determinant of its ability to achieve long-term success or even survival. Organizational success is only likely to result if short-term operations activities are consistent with long-term strategic intentions and make a contribution to competitive advantage.

Objective of Operations Function: To produce the goods and services required by customers whilst managing resources as efficiently as possible. This can lead to conflicts between Operations and Marketing Function as well as between Operations and Finance Function.

Strategy: The direction and scope of an organization over the long-term, which achieves advantage in a changing environment through its configuration of resources with the aim of fulfilling stakeholder expectations. There are three levels of strategy.

Operations Performance Objectives: A criterion against which to evaluate the performance of operations. There are considered to be five possible operations performance objectives: cost, quality, speed, dependability and flexibility.

Four Stage Model: Four stage model is underpinned by the belief that an organization’s operations can provide a source of competitive advantage. It can only do this if the operations function is managed strategically. As such all organizations should aspire to reach the highest level possible, ultimately reaching stage 4.

Trade off: The concept based on the premise that it is impossible to excel simultaneously at all aspects of operations. This means that an operations strategy can be successful only if it is based upon a single clear goal, determined by a prioritization of operations performance objectives (e.g. cost, quality, speed, dependability and flexibility).Operations Strategy: This concerns the pattern of strategic decisions and actions which set the role, objectives and activities of operationsOperations Strategy Process: