Operation Strategy

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Amity Business School

Operations Strategy (MBA 482 & MEL 415)

for Class of 2011

Amity Business School

As a courtesy to those around you

Please turn off your cell phones
and

Close your computers, except in the last row

Amity Business School

Realm of Operations Strategy
• How should the organisation satisfy the requirements of its customers? • What intrinsic capabilities should the organisation try and develop as the foundation of its long term success? • How specialised should the organisation’s activities become? • Should the organisation sacrifice some of its objectives in order to excel at others? • How big should the organisation be? • Where should the organisation locate its resources? • When should it expand or contract, and by how much?

Amity Business School

Realm of Operations Strategy
• What should it do itself and what should it contract out to other businesses? • How should it develop relationships with other organisations? • What type of technology should it invest in? • How should organise the way it develops new products and services? • How should it bind together its resources into an organisational structure? • How should the organisation’s resources and processes be improved and developed over time? • What guiding principles should shape the way any organisation formulates its operations strategy?

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Initial Issues that come our way
1. 2. 3. 4. 5. 6. What is ‘operations’ and why it is so important? What is strategy? What is operations strategy? How should operations reflect overall strategy? How can operations strategy learn from operational experience? How do the requirements of the market influence operations strategy? 7. How can the intrinsic capabilities of an operation’s resources influence operations strategy? 8. What is the difference between the ‘content’ and the ‘process’ of operations strategy? 9. What are operations strategy performance objectives? 10. What are operations strategy decision areas? 11. How do performance objectives relate to decision areas?

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Operations Management : Definition
• An operations system is defined as one in which
– several activities are performed – to transform a set of inputs into useful output – using a transformation process.

• Operations Management is
– a systematic approach to – address all the issues pertaining to – the transformation process that converts some inputs into output that are useful, and – could fetch revenue to the operations system

Amity Business School

Operations Management: Salient Aspects
• A systematic approach using scientific tools & techniques and solution methodologies to analyse problems • Addressing several issues varying in terms of time horizon, nature of decisions • Addressing design & operational control issues in the transformation process • Focusing on keeping costs to the minimum • Developing a set of measures to assess performance of the system

Amity Business School

Service – Manufacturing Continuum
Pure Product Pure Service
Ayurvedic Healing Treatment Legal/Tax Consulting Cyber Café – Telephone Booths Emergency Maintenance Services Facilities Maintenance High quality restaurant meal Fast food in a eat out joint Customised durable goods Fast moving commodities Vending Machines Adopted from Hill, T. (2005), Operations Management (Palgrave Macmillan), 2nd Edition, pp 14.

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Service Operations: Salient Features
• Tangibility: Services are performances and actions rather than objects, therefore having poor tangibility • Heterogeneity: High variability in the operation system performance • Simultaneous Production & Consumption: Degree of customer contact is very high • Perishability: Services cannot be inventoried as in the case of manufactured products.

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Manufacturing & Service Similarities & Differences
Manufacturing Organisations Service Organisations Differences...
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