The strategic role and objectives of operations Chapter 2

Operations must take on 3 roles: Implementer of business strategy Support to business strategy Driver to business strategy The role of operations function

The role & contribution of the operations function Stage 1 Stage 2Stage 3Stage 4 Externally supportive Internally supportive Externally neutral Internally neutral Stop holding the organization back Be as good as competitors Be clearly the best in the industry Redefine the industry’s expectations Give an operations advantage Link strategy with operations Adopt best practice Correct worst problems The ability to implement- The ability to support- The ability to drive- strategy Increasing contribution of operations

Customers  Price  Fast delivery Employees Fair pay Good working conditions Shareholders ROI Suppliers Continue business Society Increase employment  Ensure clean environment  Produce sustainable products Stakeholders

quality advantage [ inside the operation, reduce costs] speed advantage [reduces inventories, reduces risks] dependability advantage [saves time, saves money, gives stability] flexibility advantage [speed up response, saves time] cost advantage [staff, material, facilities, technology, etc] The five performance objectives

The Cost objective Hospital Automobile plant Bus company Super Market Technology and facilities costs Staff costs Bought-in materials and services Staff costs Technology and facilities costs Technology and facilities costs Staff costs

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