Issues covered in this chapter Resource Usage Issues include: Organizational structure and operations effectiveness The role and contribution of the operations function Connecting operations with the external environment The role of central operations Quality Speed Performance objectives Dependability Market Competitiveness Flexibility Cost Development and Organization (organisation and role) Supply Network Process Technology Capacity Decision areas Issues covered in this chapter Slide 10.1

The objectives of organisational design Development and deployment of tangible resources Efficient operation Development and deployment of intangible resources Flexible response Organisational structure OPERATIONS RESOURCES MARKET REQUIREMENTS Development and deployment of boundary resources Servicing a range of market positions The objectives of organisational design Slide 10.2

Group Headquarters Marketing Operations Finance Dept.A Dept.C Dept.B Dept.A Dept.C Dept.A Dept.C Dept.B Dept.B U-form organizations give prominence to functional groupings of resources Slide 10.3

Group Headquarters Division A Division B Division C Marketing etc. Operations Marketing etc. Marketing etc. Operations Operations The M form separates the organization’s resources into separate divisions Slide 10.4

Group Headquarters Division A Division B Division C Marketing Operations Human resources Finance Matrix form structures the organization's resources so that they have two (or more) levels of responsibility Slide 10.5

Organisation A Headquarters Org D Org B Group A Group F Org E Org C Group B Group E Group D Group C N form organizations form loose networks internally between groups of resources and externally with other organizations Slide 10.6

THE OPERATIONS FUNCTION Product/service ideas Staff Funds Accounting and finance Personnel Bought-in products and services from suppliers Products and services to customers THE OPERATIONS FUNCTION Purchasing Marketing Technical/ engineering Product/service development Process technology Product/service ideas Traditionally other ‘boundary’ functions protected the ‘core’ operations function from environmental uncertainty Slide 10.7

PRODUCT/ SERVICE DEVELOPMENT PRODUCT/ SERVICE DEVELOPMENT MARKETING OPERATIONS MARKETING OPERATIONS Example - Defense electronics manufacturer Example - Retail bank The degree of overlap between functional strategies will depend on the nature of the business Slide 10.8

The Strategic Role of the Operations Functions The 3 key attributes of operations Operations Contribution Implementing be Reliable Operationalise strategy explain Practicalities Supporting be Appropriate Understand strategy Contribute to decisions Driving be Innovative provide Foundation of strategy Develop long-term Capabilities

Four ways in which corporate head office can add value Operation A Operation A Operation A Operation A Operation A Operation A ‘Stand-alone’ influence ‘Linkage’ influence Head office Specialist function A Specialist function B Head office Operation A Operation A Operation A Operation A Operation A Operation A Central functions and services influence Corporate development Four ways in which corporate head office can add value Source: Adapted from Goold, M., Campbell, A. and Alexander, M. (1994) Corporate Level Strategy, Wiley, N.Y. Slide 10.9

A typology of the ‘Central Operations’ function Programmatic Trainer Instructing operations in the development and deployment of their capabilities through standardised improvement methods Roles: Central operations - Teacher/consultant Business operations - Pupil/Client Top down Governor Controlling the performance of the operations by setting clear priorities and measuring performance against targets Roles: Central operations - Messenger/Judge Business operations - Recipient/Defendant Performance Capabilities Operations resources Market requirements Facilitator Enabling operations in the development and deployment of their capabilities through shared advice, support and learning. Roles: Central operations - Mentor Business operations - Member of a community Curator Nurturing the performance of the operations by collecting performance data and distributing comparative performance information Roles: Central operations - Recorder/Analyst Business operations -Source of information Bottom up Emergent A typology of the ‘Central Operations’ function Slide 10.10

Programmatic Top down TRAINER GOVERNOR Operations resources Market requirements Performance Focus Capabilities Focus FACILIATOR CURATOR Bottom up Emergent Power Communication Relationship Dominant Predominantly one-way Strong Predominantly two-way Weak Subservient Information relationships for the four types of central operations functions Slide 10.11

Top management Events Graphics ..Etc. Project A Project B Project C The Thought Space Partnership Organizational Structure Slide 10.12

(CREATIVITY) Product/service Product/service Product/service development development development development development development Marketing Marketing Operations Operations (COMMERCIALISM) (COMPETENCE) Marketing Operations Marketing Marketing Operations Operations Some Some Mass Mass Professional Professional manufacturing manufacturing services services services services Thought Space - Increasing overlap between operations and the other core functions Slide 10.13

Top Management Client D Client B Graphics Events Client E Client C Technical Solutions 3D Design Marketing Accounts Thought Space - N form organisations form loose networks internally between groups of resources and externally with other organizations Slide 10.14