Operations and Supply Strategies

21 important questions on Operations and Supply Strategies

What are structural elements that define a business?

Tangible resources, such as buildings, equipment, and information technology. These resources typically require large capital investments that are difficult to reverse.

What are infrasturctural elements that define a business?

People, policies, decision rules, and organizational structure choices made by the firm. These elements are, by definition, not as visible as structural elements, but they are just as important.

What is the mission statement?

It explains why an organization exists.
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What must the business strategy say?

- clearly identify the firms targeted customers and broadly indicate what the operations and supply chain functions need to do to provide value to these customers
- set time frames and performance objectives that managers can use to track the firm's progress toward fulfilling its business strategy
- identity and support the development of core competencies into the operations and supply chain areas

What are functional strategies?

A business strategy into specific actions for functional areas, such as marketing, human resources, and finance

A firm's strategies shoeld also be aligned 'across' the functional areas. What do we mean with this?

For example, Operations and supply chain efforts aimed at developing a European supply base should be matched by marketing, finance, and HR efforts aimed at expanding the firm's global presence.

What are trade-offs (among performance dimensions), and give an example?

A decision to emphasize some dimensions at the expense of others. For e.g. When doing more flights, it means greater flexibility for consumers, but a trade-off is then that it will bring higher costs.

What are the three primary objectives of an operations and supply chain strategy?

1) help management choose the right mix of structural and infrastructural elements, based on a clear understanding of the performance dimensions valued by customers and the trade-offs involved.
2) ensure that firm's structural and infrastructural choices are strategically aligned with the firm's business strategy
3) support the development of core competencies in the firm's operations and supply chains

Experience suggests that four generic performance dimensions are particularly relevant to operations and supply chain activities what are those 4?

Quality, time, flexibility, cost

What is performance quality?

A subdimension of quality that addresses the basic operating characteristics of a products or service

What is reliability quality?

A subdimension of quality that addresses whether a product will work for a long time without failing or requiring maintenance

What two basic characteristics does time has?

Speed and reliability

What does Delivery speed mean?

A performance dimensions that refers to how quickly the operations or supply chain function can fulfil a need once it has been identified

Many operations and supply chain compete by responding to the unique needs of different customers. Both manufacturing and service firms can demonstrate flexibility. What does flexibility mean?

A performance dimension that considers how quickly operations and supply chain can respond to unique needs of customers

What is changeover flexibility?

The ability to provide a new product a wide range of products or services

Cost is always a concern, even for companies that compete primarily on some other dimension what are some typical cost categories?

Labor costs, material costs, engineering costs, quality-related costs

What happens in a competitive market?

No firm can sustain an advantage on all performance dimensions indefinitely.

What are order winners?

A performance dimension that differentiates a company's products and services from its competitors. Firms win a customer's business by providing superior levels of performance on order winners

What are order qualifiers?

A performance dimension on which customers expect a minimum level of performance superior performance on an order qualifier will not, by itself, give a company a competitive advantage

Understanding what the relevant order qualifiers and order winners are helping operations and supply chain formulate strategy in three ways what are those ways?

First, it helps identify potential problem areas, as well as strengths
second, it clarifies the issues surrounding decisions on trade-offs.
finally, it helps managers prioritize their efforts

Four stages of alignment, and although the stages originally referred to manufacturing, their descriptions apply equally well to the operations and supply chain areas today what are those four stages?

Stage 1- internally neutral: in this stage, management seeks only to minimize any negative potential in the operations and supply chain areas
Stage 2 - externally neutral: here industry practice is followed, based on the assumption that what works for competitors will work for the company
Stage 3 - internally supportive: At this stage, the operations and supply chain areas participate in the strategic debate
Stage 4 - externally supportive: At this stage, the operations and supply areas do more than just support the business strategy

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