What are the elements of operation strategy?

Answer 1

Elements of operation strategy Operations strategy comprises six components :

Positioning the production system,- Positioning the production system in manufacturing , means , selecting the type of product design, type of production processing system and the type of finished goods inventory policy for each major product line the business plan. It involves selecting the product design, the production system and the inventory policy for the finished goods for each product line. Two basic types of product design are custom and standardized, Custom products are designed according to the needs of individual customers, where as, standardized products are produce models, either continuously or in very large batches to meet the stable demand for longer period.

(a) Product Focused-Generally employed in mass production organizations, where there are groups of machine, tools and workers arranged according to their respective tasks in order to put together a product.

(b) Process Focused-It is designed to support production departments that perform a single task like painting or packing. These system are highly flexible and can easily be modified to support other product design.

2. Focus of factories and service facilities.An important element of operations strategy is a plan for each production facility to be specialized in some way .Specialization of a production facility allows it to excel at achieving a particular set of objectives .According to Wickham Skinner , “ A factory that focuses on a narrow product mix for a particular market niche will outperform the conventional plant, which attempts a broader mission�. This is because its equipment , supporting systems and procedures can concentrate on a limited task for one set of customers, its costs and especially its overheads are likely to be lower than those of the conventional plant .The key point is that, it is generally desirable for factories and service facilities to be specialized in some way , so that , they will not be vulnerable to smaller or more specialized competitors , that can provide customers with a better set of lower costs , faster product or service delivery, on-time delivery, high product and service quality , and flexibility .

3. Product/Service design and development.After the product is designed and developed it goes through various stages such as introduction, growth, maturity and decline .During the development of new products such activities like operations, marketing, and engineering functions are considered .

The product design has a tremendous impact on product quality, production cost, numbers of suppliers and levels of inventories.

4. Technology selection and process development,- An essential part of operations strategy is the determination of how products will be produced. This involves deciding and planning every detail of production processes and facilities. Combining high-technology equipments like robots, automated warehouse, with conventional equipments and devising overall production schemes are the challenges faced by operations manager today. Thorough analysis and planning of the production processes and facilities. Every step in the process of production is planned in detail. The technology to be used in the production process is selected from range of options.

5. Allocation of resources to strategic alternatives- Most companies have limited resources available for the production. Cash and Capital funds, capacity, workers, engineering talent, machines, materials, and other resources are available in varying degrees to each firm .These resources must be allocated in ways that maximize the achievement of the objectives of operations. Production companies have to continuously deal with the problem of scarce resources like capital, machine and materials and so on. As these resource inputs are vital to production activities, their shortages can influence production performance significantly. Hence the operation manger have to plan the optimal use of resources, both in terms of minimizing wastage, and in terms of their allocation to the best strategic use.

6. Facility planning, Capacity, Location and Layout. The long range capacity to produce the products /services for a firm is a part of setting operations strategy .Capital is required for production capacity.The decisions involved. Regarding the acquisition of land and and production equipments, specialized production technologies to be develop, and location of new factories have long â€"lasting effects and are subject to heavy risk.The location of the production facilities is one of the key decisions an operation manager has to make since it is critical to the competitiveness of the organization.. Setting up production facilities with adequate capacity involves massive initial investment. Strategically right options should be carefully weighted against all available alternatives. These decisions also influence the future decisions on probable capacity expansions plans.

Operation managers also make decisions, i.e. decision on internal arrangement of workers and department within the facility