 The McGraw-Hill Companies, Inc Irwin/McGraw-Hill 1 OPERATIONS STRATEGY Chapter 2

 The McGraw-Hill Companies, Inc McGraw-Hill/Irwin 2 Outline 1. Operations Strategy Model 2. Emphasis on Operations Objectives 3. Linking Strategies 4. Focused Operations 5. Global Scope of Operations

 The McGraw-Hill Companies, Inc McGraw-Hill/Irwin 3 Operations Strategy Model (Figure 2.1) Consistent pattern of decisions Internal analysis External analysis Mission Distinctive Competence Objectives (cost, quality, flexibility, delivery) Policies (process, quality systems, capacity, and inventory) Operations Strategy Corporate and business strategy Functional strategies in marketing, finance, engineering, human resources, and information systems Results

 The McGraw-Hill Companies, Inc McGraw-Hill/Irwin 4 Operations Strategic Objectives QualityFlexibilityDelivery Cost efficiency

 The McGraw-Hill Companies, Inc McGraw-Hill/Irwin 5 Examples of Important Policies in Operations (Table 2.2)

 The McGraw-Hill Companies, Inc McGraw-Hill/Irwin 6 Linking Strategies Linking operations strategy to business strategy Strategic alternatives (See Table 2.3) –Product imitator –Product innovator

 The McGraw-Hill Companies, Inc McGraw-Hill/Irwin 7 Mass Customization and Strategic Process Choices

 The McGraw-Hill Companies, Inc McGraw-Hill/Irwin 8 Focused Factory - Figure 2.2A Before PWP Process AProcess C AA B D D C C A B Process DProcess B Low Volume High Volume

 The McGraw-Hill Companies, Inc McGraw-Hill/Irwin 9 Focused Factory - Figure 2.2B After PWP AABDC BACD Low Volume High Volume PWP # 1 PWP # 2

 The McGraw-Hill Companies, Inc McGraw-Hill/Irwin 10 Types of Focus Product focus Process type Technology Volume of sales Make-to-stock and make-to-order New products and mature products

 The McGraw-Hill Companies, Inc McGraw-Hill/Irwin 11 Global Scope of Operations “Traditional” versus “Global” company Characteristics of “Global Corporation” Implications of “global”corporation for operations management