Tuck BHPB Operations StrategyPage 1Prof. Joe Hall Operations Strategy: Aligning the Organization for Superior Execution

Tuck BHPB Operations StrategyPage 2Prof. Joe Hall Introduction m Operations is all about how work is organized and performed »The goal is execution: getting work done »It’s about the details, but also the high-level organizing structure m Operations is focused on business processes

Tuck BHPB Operations StrategyPage 3Prof. Joe Hall Outline m Build an operations strategy framework m Apply the framework to your organizations m Wrap-up & summary

Tuck BHPB Operations StrategyPage 4Prof. Joe Hall Operations Strategy m A strategy is a well coordinated set of objectives, policies and plans aimed at securing a long-term competitive advantage. It provides vision for the organization. Corporate Divisional Functional What business are we in? How do we compete in a given business? What is the role of operations in the business?

Tuck BHPB Operations StrategyPage 6Prof. Joe Hall Operations Strategy – Three Components m Mission m Operations Objectives m Management Levers

Tuck BHPB Operations StrategyPage 7Prof. Joe Hall Target Market Who is our intended customer? Value Proposition What are the most important elements of our product/service from the customer’s perspective? Operating Strategy: Mission + Objectives How do we do what we do? Delivery System: Levers How is the work organized and performed? Building an Operations Strategy

Tuck BHPB Operations StrategyPage 9Prof. Joe Hall Operations Strategy – Three Components m Mission m Operations Objectives m Management Levers

Tuck BHPB Operations StrategyPage 10Prof. Joe Hall Mission of Operations m States a purpose for operations and priority among objectives. It specifies the primary task which must be achieved for operations to succeed. It is derived from the business strategy, objectives, and the particular business situation. »Corporate mission statement: what you do, who you are »Operations mission statement: how you do what you do

Tuck BHPB Operations StrategyPage 11Prof. Joe Hall Mission of Operations - Examples m Ford Motor Company: “Quality is Job #1” m FedEx: “When it absolutely, positively has to be there overnight” m Northwest Airlines: “Provide safe, clean, on-time air transportation with luggage, in a professional and consistent manner” m Dartmouth-Hitchcock Medical Center: “We advance health through research, education, clinical practice and community partnerships, providing each person the best care, in the right place, at the right time, every time”

Tuck BHPB Operations StrategyPage 12Prof. Joe Hall Operations Strategy – Three Components m Mission m Operations Objectives m Management Levers

Tuck BHPB Operations StrategyPage 13Prof. Joe Hall Operations Objectives m Cost m Quality m Delivery »Speed »Reliability m Flexibility »New Product/Service Introduction »Volume »Product/Service Mix

Tuck BHPB Operations StrategyPage 14Prof. Joe Hall Objectives: “Winners” vs. “Qualifiers” m Qualifier: must have to enter market m Winner: feature that leads the customer to choose your product or service m Consider the “3 C’s” when ranking objectives: »Customers »Competitors »Capabilities

Tuck BHPB Operations StrategyPage 15Prof. Joe Hall Operations Strategy – Three Components m Mission m Operations Objectives m Management Levers

Tuck BHPB Operations StrategyPage 16Prof. Joe Hall Management Levers Capacity Management Facilities Inventory Planning and Control Human Resources New Products / New Services Process and Technology Quality Management Sales and Operations Planning Supply Chain Management

Tuck BHPB Operations StrategyPage 17Prof. Joe Hall Framework Intro Wrap-Up m Establish a framework for an operations strategy »Operations mission »Objectives »Management levers m Goal: define a consistent direction and establish how to get there

Tuck BHPB Operations StrategyPage 18Prof. Joe Hall Operations Strategy Break-Out

Tuck BHPB Operations StrategyPage 19Prof. Joe Hall Operations Strategy - Breakout m Who is your target market? m What is your value proposition – what does your target market want? m Specify an operations mission statement for your organization »It should say something about how you execute »The focus is “how you do what you do” m Carefully define each operations objective for your organization: »Cost »Quality »Delivery »Flexibility m Rank order these four objectives »Which are more important, which are less important? m What measurable targets do you, or should you, employ for these objectives?

Tuck BHPB Operations StrategyPage 20Prof. Joe Hall Operations Strategy - Homework m For each of the seven management levers: »What are the current policies for each? »Are they consistent with the other levers? »Are they consistent with the operations objectives? »What action programs must be put in place to remedy any problems? »Who will carry out these programs? When? Capacity Management Human Resources New Products / New Services Process and Technology Quality Management Sales and Operations Planning Supply Chain Management

Tuck BHPB Operations StrategyPage 21Prof. Joe Hall Wrap-Up m Establish a framework for an operations strategy »Operations mission »Objectives »Management levers m Goal: define a consistent direction and establish how to get there m Operations can be a powerful competitive weapon!