Strategy and Tactics Distinctive Competencies The special attributes or abilities that give an organization a competitive edge. Price Quality Time Flexibility Service Location

Examples of Distinctive Competencies Bill Collection points, ATM Convenience Location Banks, Airlines, Insurance Companies Superior customer service Service Burger stands. Supermarkets Variety Volume Flexibility Express Mail, Courier Services, One-hour photo Rapid delivery On-time delivery Time Plasma/LCD TV SUV /Sports Utility Vehicle Handy cams, Mobile Phones High-performance design or high quality Consistent quality Quality Pakistan Postal Service Guest Houses, Motels Low Cost Price

Relationship between Operations and Organizational Strategy Organizational strategy is an over all big picture for the whole organization. Longer in time horizon Less detailed and broader in scope. Operational Strategy is Narrower in scope and in more detail Should be in line with the Organization strategy Prepared by middle management.

Relationship between Operations and Organizational Strategy Operational Strategy: Should not harm the objectives of the organization. Should avoid SUBOPTIMIZATION, meaning department and divisions goals should not harm the overall Organizational strategy.

Increase Production Capacity Decisions on Processes Operations Strategy Strategy Process Example Customer Needs More Product Corporate Strategy Increase Organization Size Operations Strategy Increase Production Capacity Decisions on Processes and Infrastructure Build New Factory 3

Strategy Design Process Strategy Map Desired Results Financial Perspective Improve Shareholder Value Customer Perspective Customer Value Proposition Internal Perspective Build-Increase-Achieve Learning and Growth Perspective A Motivated and Prepared Workforce 3

Strategy Formulation Distinctive competencies Environmental scanning SWOT Order qualifiers Order winners Strategy Design Process A Framework for Manufacturing Strategy Service Strategy Capacity Capabilities Productivity Measures

Steps in Developing a Manufacturing/Service Strategy Segment the market according to the product/Service group. Identify product/Service requirements, demands and profit margins of each group. Determine order qualifiers and winners for each group. Convert order winners into specific performance requirements. 9

Key External Factors for Environment Scanning Economic conditions Political conditions Legal environment Technology Competition Markets

Key Internal Factors for Environment Scanning Human Resources ( Trained, skilled and qualified employees) Facilities and equipment ( a good source for motivation, and obtaining competitive advantage over your competitors) Customers ( Repeat customers, and customer relationship Management) Products and services ( How does the organization values itself whether it provides products or services that add value) Technology ( Legacy Systems or Technology that is competitive and has the potential to gain competitive advantage) Suppliers ( Companies have taken care of the supplier issue by making use of effective Supply Chain Management Strategies or use vertical or horizontal integration techniques)

SERVICE STRATEGY Identify Process /Systems /organization based services. Concept, operating strategy and delivery. Cost Leadership Differentiation McGraw-Hill/Irwin Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved.

Quality and Time Strategies Quality-based strategies Focuses on maintaining or improving the quality of an organization’s products or services Quality at the source Time-based strategies Focuses on reduction of time needed to accomplish tasks

Time Based Strategies There are 6 time based strategies namely: Planning Time Products /service design time Processing Time Changeover Time Delivery Time Response Time for Complaints