© Nigel Slack and Michael Lewis 2003 Level 1 - Fit This chapter examines the second level of the operations strategy process – achieving sustainability Level 2 - Sustainability Level 3 - Risk Align resources with requirements Develop sustainable competitive advantage Include impact of uncertainty Increasing complexity

© Nigel Slack and Michael Lewis 2003 Level of market requirements Level of operations resource capability Sustainability is maintaining ‘fit’ whilst extending operations capability and the requirements of the market Line of fit Y X A x2 y2 B C y1 x1

© Nigel Slack and Michael Lewis 2003 Quality Performance objectives Capacity Supply Network Process Technology Development and Organization Resource Usage Market Competitiveness Decision areas Initial operations strategy matrix for CAG Recycling Services Speed Dependability Flexibility Cost XXX XXX = Critical intersections X

© Nigel Slack and Michael Lewis 2003 Quality Performance objectives Capacity Supply Network Process Technology Development and Organization Resource Usage Market Competitiveness Decision areas Speed Dependability Flexibility Cost X X = Critical intersections X Operations strategy matrix for CAG Recycling Services after acquiring the high volume public authority consortium contract X X X X X X X X X X

© Nigel Slack and Michael Lewis 2003 Quality Performance objectives Capacity Supply Network Process Technology Development and Organization Resource Usage Market Competitiveness Decision areas Speed Dependability Flexibility Cost X X = Critical intersections X X X X X X X X X X X Operations strategy matrix for CAG Recycling Services as they anticipated future recycling legislation X X X

© Nigel Slack and Michael Lewis 2003 Level of market requirements Level of operations resource capability y1 x1x1 Fit over time at CAG Recycling Systems y2 y3 y4 y5 x2x2 x3x3 x4x4 C F G D E

© Nigel Slack and Michael Lewis 2003 Value chain relationships Competitive rivalry Potential substitutes Potential new entrants Difficult to copy Difficult to move Scarcity No substitutes Achieving sustainability through barriers to entry and imitation OPERATIONS RESOURCES MARKET REQUIREMENTS ‘Static’ sustainability – barriers to entry and imitation

© Nigel Slack and Michael Lewis 2003 Examine the performance of operations processes Operations innovation Develop new insights and capabilities Compare this performance against objectives Single-loop learning in operations

© Nigel Slack and Michael Lewis 2003 Reduced performance of operations processes Operations innovation less easy Insights and capabilities less useful Performance objectives less appropriate The potential limitations of single-loop learning Shifts in technology, processes or markets, leading to improved competitor performance

© Nigel Slack and Michael Lewis 2003 Double-loop learning questions the appropriateness of operations performance Operations innovation Develop new insights and capabilities Compare this performance against objectives Question the relevance of objectives Develop new (more relevant) objectives Examine the performance of operations processes

© Nigel Slack and Michael Lewis 2003 Single loop Double loop Time Single and double-loop learning over time

© Nigel Slack and Michael Lewis 2003 YY Quality Performance objectives Capacity Supply Network Process Technology Development and Organization Resource–based capability trajectories Requirement-based market trajectories Decision areas Categorising path dependencies using the operations strategy matrix Speed Dependability Flexibility Cost Trajectories of development

© Nigel Slack and Michael Lewis 2003 Performance based on ‘old’ technology ‘Disruptive’ technological change Performance required by ‘bottom end’ of the market Performance based on ‘new’ technology Performance required by ‘top end’ of the market Zone of market- acceptable performance Performance of goods and services based on the technology AB Time ‘Disruptive’ technological change (Adapted from Christensen, C.M. (1997) The Innovator’s Dilemma, Harvard Business School Press, Boston, MA).