Strategies for Operations Strategy

Strategies for Operations StrategyDEFINITION OF STRATEGYThe pattern of or so important objectives, goals and purposes and the fundamentals, plans, policies and philosophies for achieving those goals, that ar declared in such a way as to narrow down what business the loyal is engaged in, and what kind of organization it is or would like to be. surgical operation MANAGEMENTOperations centering is an area of business concerned with the proceedsion of goods and services, and involves the responsibility of ensuring that business trading operations are efficient in terms of using as little resource as required, and effective in terms of meeting node necessarys. It is concerned with managing the process that converts inputs (in the forms of materials, labors and energy) into breakputs (in the form of goods and services).OPERATION STRATEGYThere are two fictional characters of operations outlineThey have a particular essence, a blend or fusion of building blocks that throw away each a unique composition customized to the embeddedness of the situation andThese various operations strategies have a number of tactical factors or contingency issues that influence the deployment of the strategy and also act as management levers to enhance its competitive ability.The operations strategy cannot be designed in a vacuum. It must be link up to the customers and other parts of the enterprise and the ply network.(Alan Rushton and John Oxley 1989)The operations strategy has an important role in coordinating the available goals to those of the organization. However, the objectives will change everyplace time hence the need for the operations strategy to anticipate future needs. In this way it acts as a portfolio that can adopt to the changing product and the service combination needs of the final customer.SUCCESS FOR OPERATION STRATEGYThe keys to competitive success for the operations strategy lie inTo know the requirement of marketsIdentifying the priority choicesU nderstanding the consequences of each choiceAppreciating the various trade-offsTECHNOLOGYTechnology is the survival of the fittest. Know a days every firm is trying to deject hot environment which is surrounded by vast eruptions of not only nuclear power but also technological power as well. globalization has led Managers to become more(prenominal) fully equip and face their competitors fiercely with strong and analytical based marketing strategies.The number of world-class competitors is increasing at an alarmingly rate and to gain the upper edge a firm has to develop an internal system so strong that it can leave its competitors farthest behind in the race and earn the loyalty of not only its existing customers but also take over the new market successfully. In order to penetrate into the market successfully organizations are realizing that strong plan, design, and manufacturing functions are necessary.So where it only did began that organizations began to realize the custom er needs and fulfill them according to their demand. No longer was the customer dumb but the integral force behind an organizations position in the market, the organization soon learnt to cater to its needs and specifications, designing and engineering customer specific goods available inside time and at woo effective prices.It was in the early 1980s that demand for new products esca newd and manufacturing organizations soon effected that in order to meet the ever changing customer needs they need to become flexible and responsive in modifying existing products and processes. As manufacturing capabilities change in the 1990s, managers realized that materials and service inputs from suppliers had a major impact on their organizations ability to meet customer needs. This led to an increase centering in the supply base and the organizations sourcing strategy. Managers also realized that producing a quality product was not enough. Getting the products to customers when, where, how, and in the quantity that they want, in a monetary value-effective manner, constituted an totally new type of challenge. More recently the era of the Logistics Renaissance was also born, spawning a whole set of time-reducing information technologies and logistics networks aimed at meeting these challenges.As a result of these changes, organizations now find that it is no longer enough to manage their organizations. They must also be involved in the management of the network of all upstream firms that provide inputs (directly or indirectly), as well as the network of downstream firms responsible for delivery and after-market service of product to the end customer. From this realization emerged the opinion of the supply chain management.(Stephens 1992)Supply chain management is the back-bone of operations management without it the flow of products from producer to customer would in fact collapse. To better clear the operations management and how strategies are applied to it to get t he competitive advantage over other firms let us take an example of FedEx Business Logistics work and Laura AshleyEXAMPLE OF FEDEX BUSINESS LOGISTICS SERVICES LAURA ASHLEYThe United Kingdom-based garment and home furnishing company Laura Ashley had severe financial problems in the early 1990s. The company had grown rapidly since Bernard and Laura Ashley started product in 1953 of book-printed scarves, and by 1990 Laura Ashley employed more than 8000 people and owned or leased about 550 retail shops in 27 countries. The company also supplied a number of franchise shops in other countries. Total sales in 1990/1991 were about GBP 325 million, more than 40% of which came from North America.(Stephens 1992)Poor logistics performance was recognized as a major cause of the above-mentioned financial difficulties. Laura Ashley had serious problems in servicing its customers worldwide. The company could not get products from statistical distribution centres to stores quickly enough to defle ct stocking out on major items. Laura Ashley had seven distribution centers around the world, but they were largely unconnected by management information systems. Overall stock handiness was only about 80%, although inventory costs were high. The transport system was inefficient and spread over eight principle carriers.In 1992, Laura Ashley decided to hand over the global logistics functions to Federal Expresss newly formed business logistics division. The two companies signed a 10-year contract. All in-house logistics operations were transferred to Business Logistics. The 300 Laura Ashley employees from distribution centres and distribution all become employees of Business Logistics. Laura Ashleys distribution centre in Newton, Wales, was transferred to Business Logistics, and the remaining six centres were closed. The higher efficiency of a single-hub distribution system more than offset the extra transport costs.The new contract targets a 10% reduction of distribution costs in t he first year. Beyond cost savings, the new system will be more reliable, with frequent store deliveries. The target is to be to supply shops anywhere in the world within 24 or 48 hours, depending on localization principle. A further advantage is access from the individual stores to Business Logistics on-line information system, which provides data on which products are in stock, pass judgment dates for receipt of out-of-stock items and the spot of all items in-transit. The partnership with Business Logistics has enabled Laura Ashley to re-launch its catalog mail order business.CAPACITYMaximum output or producing ability operating at capacityCapacity of service firms is constrained byTimeLaborEquipmentFacilitiesFour ways to manage constrained capacityAmount of capacity neededThe timing of changesNeed to maintain balance throughout the systemFlexibility of facility and workforceCapacityuse existing resources more efficientlyExtend hours of operation provide work more efficiently d uring peak timesReduce service levels or offer smaller range of options during peak timesImprove customer serviceVary capacity to meet demandadjust the firms resources to match demandWhat could be done during peak periods? i.use part-time/casual employees ii. office or rent extra facilities or equipment iii.cross-train (multi-skill) employees iv. source some functions i.e. reservations(Robert B. Hanfield Ernest L. Nichols)What could be done during off-peak periods?Schedule down-timeReduce staff numbersLOCATIONThe marking out of the boundarier, oridentifying the place or site of, a piece of land, according to the description given in anentry, plan, map, etc.The location of facilities involves a commitment of resources to a semipermanent plan. Once the size, number, and location of these are determined, so are the possible paths by which product flows through to the final customer. These decisions are of great significance to a firm since they represent the basic strategy for accessi ng customer markets, and will have a considerable impact on revenue, cost, and level of service.Every firm/business looks for location that will help them to expand their markets. kettle of fish decision represents a key part strategic planning process of virtually every organization.Need for Location DecisionsMarketing StrategyBasic Cost of a BusinessExpand of businessDepletion of ResourcesNature of Location DecisionsImportance of strategicEntail a desire term commitment/costsImpact on investments, revenues, and OperationsSupply chainsGoals/objectivesProfit potentialNo single location may be better than othersMake right decision to choose perfect locationMore OptionsExpand existing facilitiesAddition of new facilitiesShiftingObjectives of Location Decisions see on the criteriaIdentify the important factors(location of markets or Raw materials)Develop location alternativesEvaluate the alternativesMake selectionTrends in LocationsForeign producers locating in U.S. do in USACurrency fluctuationsJust-in-time manufacturing techniquesMicro factoriesInformation TechnologyEXAMPLES OF VARIOUS COMPANIESLet us consider some examples of various companies which have taken location under account in order to growNike and Reebok, the two largest athletic piecewear companies, look to contractors in Asia to manufacture their shoes. Sourcing from Asia offers advantages of low cost and flexibility,When FedEx opened its Asiatic Hub in Subic Bay, Philippines, in the 1990s it set the stage for its new round-the-world flights linking its Memphis and Paris package hubs to Asia.When Mercedes announced its plan to build its first major overseas launch in Vance, Alabama, it completed a year of competition among 170 sites amongst 30 states and two countries.When Hard Rock Caf opened in Moscow in late 2002, it ended three years of advanced preparation of a Russian food supply chain.PROCESSHammer and chamhys defines process as a order of battle of activities thats takes one or more k inds of input which generate an output that is of value to the customer.(Hammer chamhys 1993)The various kinds of business process areSupporting processes- this include IT support, recruitment, Accounting.Operational processes- operational processes are manufacturing, purchasing, sales, marketing.Core process- Add direct value to the customer in term of products or services,Corporate Governance one can define corporate governance as the culture of company which includes rules, policies, and customs. They also manitain relationship with management board of director, shareholder and stakeholder (Employees, bank, supplier, customer etc).Strategic Management strategic mangement provides boilers suit directions of an organisation. The aims and objectives, developing polices and plans to achieve these objectives. This Managemrial top level actitvity is usually performed by CEO (Chief Executive Officer) and the exclusive team.LAYOUTIn operations management strategy there are four types o f LayoutsFacility Layout and Basic FormatsProcess-oriented LayoutLayout PlanningService LayoutFacility layoutFacility layout can be defined as the process by which the placement of departments, workgroups within departments, workstations, machines, and stock-holding points within a facility are determined.Process-Oriented LayoutDesign places departments with large flows of material or people togetherDept. areas have similar processesUsed with process-focused processesProduct-Oriented LayoutFacility nonionised around productDesign minimizes line imbalanceTypes Fabrication line assembly lineRetail Service LayoutGoalmaximize net profit per square foot of floor space.Services capesEXAMPLESExamples of companies who have employed layout strategiesIn 1995, Toshiba was the market leader in portable computer sales worldwide. The company used layout strategy in its Ome factory in Japan.Total Quality Management(TQM)DefinitionTQM is a complete re-organizing of the work process and the workplac e by application of principles of teamwork and work teams that are supposed(p) to involve the worker and give them greater control in their work.Total Quality Management (TQM) is a comprehensive and structured approach to organizational management that seeks to improve the quality of products and services through ongoing refinements in response to continuous feedback. TQM requirements may be defined separately for a particular organization or may be in adherence to established standards, such as the International Organization for Standardizations ISO 9000series. TQM can be applied to any type of organization it originated in the manufacturing sector and has since been adapted for use in almost every type of organization imaginable, including schools, highway maintenance, hotel management, and churches. As a current focus ofe-business, TQM is based on quality management from the customers point of view.Business Process OutsourcingBusiness process outsourcing (BPO) is the act of givi ng a third-party the responsibility of running what would otherwise be an internal system or service. For instance, an insurance company might outsource their claims processing program or a bank might outsource their loan processing system. Other common examples of BPO are call centers and payroll outsourcing.Typically, companies that are looking at business process outsourcing are hoping to achieve cost savings by handing the work to a third-party that can take advantage of economies of scale by doing the same work for many companies. Or perhaps the cost savings can be achieved because labor costs are lower due to different costs of living in different countries.In mass meeting for the potential cost savings, the company in question must relinquish control over an aspect of their business which explains why business process outsourcing is oft reserved for non-critical, non-core type of work.REFERENCESPhilip B. Schary and Tage Skjott-Larsen, Managing the global supply chain manag ement, Munksgaard International Publishers Limited (pages 16, 24 and 38)Alan Rushton and John Oxley, Handbook of Logistics and Distribution Management, 1st create in 1989 by Kogan Page Ltd (pgs 74-76)Ronald H. Ballou, 3rd edition Business Logistics Management, Prentice hall (pages 44, 56 and 171)Robert B. Hanfield Ernest L. Nichols, JR. Introduction to Supply Chain Management (pgs9-22, 45-56)William J.Stevenson 9th edition Operation Management(International learner edition with global readings)(pgs361-367,227-229)http//www.netmba.com/operations/project/cpm/http//www.ganttchart.com/Ganttwith%20DependenciesExample.htmlBIBLIOGRAPHYPhilip B. Schary and Tage Skjott-Larsen, Managing the global supply chain management, Munksgaard International Publishers Limited (pages 16, 24 and 38)Alan Rushton and John Oxley, Handbook of Logistics and Distribution Management, 1st published in 1989 by Kogan Page Ltd (pgs 74-76)Ronald H. Ballou, 3rd edition Business Logistics Management, Prentice hall ( pages 44, 56 and 171)Robert B. Hanfield Ernest L. Nichols, JR. Introduction to Supply Chain Management (pgs9-22, 45-56)http//www.netmba.com/operations/project/cpm/http//www.ganttchart.com/Ganttwith%20DependenciesExample.htmlHeinrich, Claus E. Adapt or die transforming your supply chain into an adaptive business network. Hoboken, N.J J. Wiley Sons 2003.Fredendall, Lawrence D. Basics of supply chain management. Boca Raton St. Lucie Press 2001Hugos, Michael. Essentials of supply chain management. Hoboken, NJ John Wiley Sons 2003David Simchi Levi, Philip kaminsky, and Edith Simchi Levi. Designing and Managing the Supply Chain Concepts, Strategies, and Case Studies. Irwin McGrawHill, 2000.Sunil Chopra and Peter Meindel. Supply Chain Management Strategy, Planning, and Operation, Prentice Hall of India, 2002.