Approaches to developing an operations strategy, Operation Management

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Approaches to Developing an Operations Strategy

Approaches to developing an operations strategy specifically in service organisations: 

1. The operations function is often inadequately represented when business strategy is being determined. 

2. Order qualifiers are those attributes of products or services which must be met before a potential customer will even consider placing an order. Order winners are those attributes of the products or services which determine whether or not the customer will place an order. 

3. In designing operations systems, trade-off choices must be made on the types of facilities, equipment, labour, product design, organisation and management procedures. The choices should be made in the light of the qualifiers and order winners identified in the business strategy. 

4. Skinner highlighted the circumstances under which the operations function is likely to behave as either a competitive weapon or as a corporate millstone. He suggested that operations performance measures should be chosen which are aligned with the qualifiers and order winners, and used to track performance against the strategic business objectives. 

5. Skinner introduced the concept of the 'focused factory' by means of which operations are separated into groupings which concentrate on the provision of products and services which have the same qualifiers and order winners. 

6. In recent years, technological developments and new management doctrines such as total quality management and just-in-time methods have brought the need for trade-offs and focus into question. Porter's productivity boundary suggests that there can be two situations one where multiple criteria applies and when close to the productivity boundary, trade-offs apply. 

7.  The life cycle curve has a significant impact on operational objectives and capabilities. 

8. Consideration of the linkages between employee, customer satisfaction and profitability in Heskett's 'cycle of failure' and the profit-value chain 

9. Operations systems must deal with varying classification of customer taking into account the competitive service environment. Sasser's classification. 

10.  Customer satisfaction changes dynamically and is influenced by varying degrees of tolerance 

11.   Schmenner's service-process matrix contains a diagonal that suggests that some companies response to a competition is to move firstly towards and then up the diagonal. He observed a move towards service factories. 

12.  The formulation of strategy and operational implementation are parallel and iterative rather than serial and unitary activities.

13.  There are three well known structured approaches to operations strategy formulation: Hill, Platts, and Gregory and Slack. 

14.  New strategies in operations will focus on value and how to maximise customer, employee and stakeholder value. 

15.  Links to operational strategy are illustrated by different managerial stances.


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