1.  The McGraw-Hill Companies, Inc. 2004 Irwin/McGraw-Hill 1 OPERATIONS STRATEGY Chapter 2

2.  The McGraw-Hill Companies, Inc. 2004 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

3.  The McGraw-Hill Companies, Inc. 2004 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

4.  The McGraw-Hill Companies, Inc. 2004 McGraw-Hill/Irwin 4 Operations Strategic Objectives QualityFlexibilityDelivery Cost efficiency

5.  The McGraw-Hill Companies, Inc. 2004 McGraw-Hill/Irwin 5 Examples of Important Policies in Operations (Table 2.2)

6.  The McGraw-Hill Companies, Inc. 2004 McGraw-Hill/Irwin 6 Linking Strategies Linking operations strategy to business strategy Strategic alternatives (See Table 2.3) –Product imitator –Product innovator

7.  The McGraw-Hill Companies, Inc. 2004 McGraw-Hill/Irwin 7 Mass Customization and Strategic Process Choices

8.  The McGraw-Hill Companies, Inc. 2004 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

9.  The McGraw-Hill Companies, Inc. 2004 McGraw-Hill/Irwin 9 Focused Factory - Figure 2.2B After PWP AABDC BACD Low Volume High Volume PWP # 1 PWP # 2

10.  The McGraw-Hill Companies, Inc. 2004 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

11.  The McGraw-Hill Companies, Inc. 2004 McGraw-Hill/Irwin 11 Global Scope of Operations “Traditional” versus “Global” company Characteristics of “Global Corporation” Implications of “global”corporation for operations management