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Summary chapter 3 operations strategy of operations management HPBMN440-1 chapter notes
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CHAPTER 1 notes operations and risk control management (HPBM440-1) Operations Management Global & Southern African Perspective
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Operations Management Chapter 3 operations strategyKey questions:
What is strategy and what is operations strategy?
What is the difference between a ‘top-down’ and a ‘bottom-up’ view of
operations strategy?
What is the difference between a ‘market requirement’ and an ‘operations
resources’ view of operations strategy?
How can an operations strategy be put together?
What is strategy and what is operations strategy?
Military and business strategy can be described in similar ways including
the following:
o Setting broad objectives that direct an enterprise towards its overall
goal.
o Planning the path that will achieve these goals.
o Stressing long-term rather than short-term objectives.
o Dealing with the total picture rather than stressing individual
activities.
o Being detached from, and above, the confusion and distraction of
day-to-day activities.
Strategy is more than one single decision it is the total pattern of the
decisions and actions that influence the long-term direction of the
business.
Observing the total pattern of decisions gives an indication of the actual
strategic behaviour.
Operations strategy.
The pattern of strategic decisions and actions which set the role,
objectives, and activities of the operation.
Operations strategy has content and process. The content concerns the
specific decisions which are taken to achieve specific objectives. The
process is the procedure which is used within a business to formulate its
strategy.
From implementing to support to driving strategy.
Most businesses expect their operations strategy to improve operations
performance over time.
They should be progressing from a state in which operations contribute very
little to the competitive success of the business through to the point where
they are directly responsible for its competitive success.
,Operations Management Chapter 3 operations strategy
This means it is necessary, in turn, to master the skills to first ‘implement’,
then ‘support’ and then ‘drive’ operations strategy.
o Implementing business strategy-
The most basic role of operations is to implement strategy.
Can’t touch, see strategy, all you can see is how the operations
behaves in practice.
o Supporting business strategy –
Support strategy goes beyond simply implementing strategy.
It means developing the capabilities which allow the organisation to
improve and refine its strategic goals.
o Driving business strategy-
The third and most difficult, role of operations is to drive strategy by
giving it a unique and long-term advantage.
Perspectives on operations strategy.
4 perspectives from differing views and definitions of operations strategy
that have emerged:
o Operations strategy is a top-down reflection of what the whole group
or business wants to do.
o Operations strategy is a bottom-up activity where operations
improvements cumulatively build strategy.
o Operations strategy involves translating market requirements into
operations decisions.
o Operations strategy involves exploiting the capabilities of operations
resources in chosen markets.
None of these 4 perspectives alone give the full picture of what operations
strategy is.
But together they provide some idea of the pressures which go to form the
content of operations strategy.
Figure 3.2: the 4 perspectives on operations strategy
, Operations Management Chapter 3 operations strategy
The top-down and bottom-up perspectives.
Top-down strategies.
Large companies need a strategy to position itself in its global, economic,
social, and political environment.
This consists of decisions about what types of business the group wants to
be in, what parts of the world it wants to operate in, how to allocate its
cash between its various businesses and so on. Decisions such as these
form the corporate strategy of the corporation.
Business strategy sets the objectives for each individual business and how
it positions itself in its marketplace.
Functional strategies set the objectives for each functions contribution to
its business strategy.
Figure 3.3: the top-down perspective of operations strategy and its
application to the printing service group.
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