Operation Strategies
CHAPTER
Operations Strategy and Competitiveness
Before studying this chapter you should know or, if necessary, review 1. 2. The role of the OM function in organizations, Chapter 1, pp. 3–4. Differences between strategic and tactical decisions, Chapter 1, 9–10.
2
LEARNING OBJECTIVES After studying this chapter you should be able to
1
2 3 4 5 6 7 8 9
Define the role of business strategy. Explain how a business strategy is developed. Explain the role of operations strategy in the organization. Explain the relationship between business strategy and operations strategy. Describe how an operations strategy is developed. Identify competitive priorities of the operations function. Explain the strategic role of technology. Define productivity and identify productivity measures. Compute productivity measures.
CHAPTER OUTLINE
The Role of Operations Strategy 28 Developing a Business Strategy 29 Links to Practice: Dell Computer Corporation 34 Developing an Operations Strategy 34 Links to Practice: Southwest Airlines Company 36 Links to Practice: FedEx Corporation 37
Strategic Role of Technology 40 Productivity 41 OM Across the Organization 46 Inside OM 47 Case: Prime Bank of Massachusetts 49 Case: Boseman Oil and Petroleum (BOP) 50
26
OPERATIONS STRATEGY AND COMPETITIVENESS • 27
o maintain a competitive position in the marketplace, a company must have a long-range plan. This plan needs to include the company’s long-term goals, an understanding of the marketplace, and a way to differentiate itself from its competitors. All other decisions made by the company must support this long-range plan. Otherwise, each person in the company would pursue goals that he or she considered important, and the company would quickly fall apart. The functioning of a football team on the field is similar to the functioning of a business and provides a good example of the importance of a plan or vision. Before the plays are made, the team prepares a game strategy. Each
Operations Strategy and Competitiveness
Before studying this chapter you should know or, if necessary, review 1. 2. The role of the OM function in organizations, Chapter 1, pp. 3–4. Differences between strategic and tactical decisions, Chapter 1, 9–10.
2
LEARNING OBJECTIVES After studying this chapter you should be able to
1
2 3 4 5 6 7 8 9
Define the role of business strategy. Explain how a business strategy is developed. Explain the role of operations strategy in the organization. Explain the relationship between business strategy and operations strategy. Describe how an operations strategy is developed. Identify competitive priorities of the operations function. Explain the strategic role of technology. Define productivity and identify productivity measures. Compute productivity measures.
CHAPTER OUTLINE
The Role of Operations Strategy 28 Developing a Business Strategy 29 Links to Practice: Dell Computer Corporation 34 Developing an Operations Strategy 34 Links to Practice: Southwest Airlines Company 36 Links to Practice: FedEx Corporation 37
Strategic Role of Technology 40 Productivity 41 OM Across the Organization 46 Inside OM 47 Case: Prime Bank of Massachusetts 49 Case: Boseman Oil and Petroleum (BOP) 50
26
OPERATIONS STRATEGY AND COMPETITIVENESS • 27
o maintain a competitive position in the marketplace, a company must have a long-range plan. This plan needs to include the company’s long-term goals, an understanding of the marketplace, and a way to differentiate itself from its competitors. All other decisions made by the company must support this long-range plan. Otherwise, each person in the company would pursue goals that he or she considered important, and the company would quickly fall apart. The functioning of a football team on the field is similar to the functioning of a business and provides a good example of the importance of a plan or vision. Before the plays are made, the team prepares a game strategy. Each
Bibliography: Ahlstrom, P., and R. Westbrook. “Implications of Mass Customization for OM: An Exploratory Survey,” International Journal of Operations and Production Management, 19, 3, 1999, 262– 274. Fine, Charles H. Clock Speed, Winning Industry Control in the Age of Temporary Advantage. New York: Perseus Books, 1998. Gagnon, S. “Resource Based Competition and the New Operations Strategy,” International Journal of Operations and Production Management, 19, 2, 1999, 135– 138. Gordon, Benjamin H. “The Changing Face of Third Party Logistics,” Supply Chain Management Review, March/April, 2003, 50 – 57. Grover, V., and M. K. Malhotra. “A Framework for Examining the Interface Between Operations and Information Systems: Implications for Research in the New Millennium,” Decision Sciences, 30, 4, 1999, 901– 919. Hayes, Robert H., and Steven C. Wheelwright. Restoring Our Competitive Edge: Competing through Manufacturing. New York: John Wiley & Sons, 1984. Hill, Terry. Manufacturing Strategy Text and Cases, Irwin McGraw-Hill, 2000. Kendall, Ken E. “The Significance of Information Systems Research on Emerging Technologies,” Decision Sciences, 28, 4, 1997, 775– 792. Peters, T. J. In Search of Excellence: Lessons from America’s Best Run Companies. New York: Warner Books, 1984. Porter, Michael E. “What Is Strategy?” Harvard Business Review 74 (November-December 1996), 61 – 78. Robert, Michel. Strategy Pure and Simple II. McGraw-Hill, 1998. Rondeau, P. J., Vonderembse, M. S., and Raghunathan, T. S. “Exploring Work System Practices for Time-Based Manufacturers: Their Impact on Competitive Capabilities,” Journal of Operations Management, 18, 2000, 509 – 529. Spring, M., and Dalrymple, J. F. “Product Customization and Manufacturing Strategy,” International Journal of Operations and Production Management, 20, 2000, 4, 441 – 467. Vickery, S., Droge, C., and Germain, R. “The Relationship between Product Customization and Organizational Culture,” Journal of Operations Management, 17, 1999, 277 – 301. Vokurka, R. J., and O’Leary-Kelly, S. W. “A Review of Empirical Research on Manufacturing Flexibility,” Journal of Operations Management, 18, 2000, 485 – 501. Ward, P. T., and Duray, R. “Manufacturing Strategy in Context: Environment, Competitive Strategy, and Manufacturing Strategy,” Journal of Operations Management, 18, 2000, 123 – 138.