Production and Operations Management
Q1) Explain the basic competitive priorities considered while formulating operations strategy by a firm?
Ans: Operations strategy is the collective concrete actions chosen, mandated, or stimulated by corporate strategy. It is, of course, implemented within the operations function. The operations strategy specifies how the firm will employ its operations capabilities to support the business strategy. Operation advantages depend on its processes and competitive priorities considered while establishing the capabilities. The basic competitive priorities are: * Cost * Quality * Time * Flexibility
Cost: Cost is a primary consideration while marketing a product or service. A firm competing on a price/cost basis is able to provide consumers with an in-demand product at a price that is competitively lower than that offered by firms producing the same or similar good/service. Lower Price and better quality of a product will ensure and higher profitability. To estimate the actual cost of production, the operations manager must address labour, materials, scrap generations, overhead and other initial cost of design and development.
QUALITY is defined by the customer. The Operations Manger mainly looks into two aspects namely highly performance design and Consistent quality. High Performance design includes superior features, great durability, and convenience to services where as consistent design measures the frequency with which the product meets its design specifications and performs best.
TIME: Faster delivery time, on – time delivery, and speedy development cycle are the time factors that operations strategy looks into. Faster delivery time is the time lapsed between the customer order and the delivery. On time delivery is the frequency with which the product is delivered on time. The development speed is the elapsed time from the idea generation up to the final design and production of products.
FLEXIBILITY: Firms may compete on their ability to
Ans: Operations strategy is the collective concrete actions chosen, mandated, or stimulated by corporate strategy. It is, of course, implemented within the operations function. The operations strategy specifies how the firm will employ its operations capabilities to support the business strategy. Operation advantages depend on its processes and competitive priorities considered while establishing the capabilities. The basic competitive priorities are: * Cost * Quality * Time * Flexibility
Cost: Cost is a primary consideration while marketing a product or service. A firm competing on a price/cost basis is able to provide consumers with an in-demand product at a price that is competitively lower than that offered by firms producing the same or similar good/service. Lower Price and better quality of a product will ensure and higher profitability. To estimate the actual cost of production, the operations manager must address labour, materials, scrap generations, overhead and other initial cost of design and development.
QUALITY is defined by the customer. The Operations Manger mainly looks into two aspects namely highly performance design and Consistent quality. High Performance design includes superior features, great durability, and convenience to services where as consistent design measures the frequency with which the product meets its design specifications and performs best.
TIME: Faster delivery time, on – time delivery, and speedy development cycle are the time factors that operations strategy looks into. Faster delivery time is the time lapsed between the customer order and the delivery. On time delivery is the frequency with which the product is delivered on time. The development speed is the elapsed time from the idea generation up to the final design and production of products.
FLEXIBILITY: Firms may compete on their ability to