OPERATIONS STRATEGIES

Dr. Aneel SALMANDepartment of Management Sciences

COMSATS Institute of Information Technology, Islamabad

Instructor

• Education• Experience• Research

Introduction to Course

• Course Code : MGT 563• Title: Operations Strategies • Credit Units: 3• Prerequisite: MGT 460

Course Objectives

• The student should understand the tradeoffs among different types of goods and services operations systems in terms of key characteristics, management tasks, organization and control, and impact on the strategy and direction of the firm.

• The student should understand the strategic and tactical operations management issues and their relationship to the other functional areas of the firm.

• The student will gain experience employing and should be able to demonstrate a basic competence with the tools and techniques used by real-life operations professionals in managing operations and setting operations policy.

Outcomes

• Understand and be able to perform the key steps in the development of a operations strategies for new or existing companies.

• Understand how companies set strategic direction and how they use data and analysis to create key strategic and operational performance measures to monitor the effectiveness of the strategy implemented.

• Understand the issues and challenges companies face when developing operation strategies to improve performance, such as resistance to change, limited resources, etc., and the importance of employee involvement in the process, and the need to manage the strategic planning process.

Recommended Books and Additional Learning Materials

• Beckman, Sara, and Donald Rosenfield. Operations Strategy: Competing in the 21st Century. McGraw-Hill/Irwin, 2007. ISBN: 9780072500783.

• Fine, Charles H. Clockspeed: Winning Industry Control in the Age of Temporary Advantage. Basic Books, 1999. ISBN: 9780738201535.

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Economy is bad ….let’s be an entrepreneur !

What business aspects would you consider for starting a Fusion Food restaurant in Islamabad?

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Cross-Functional Nature of Operations

MARKETINGMARKETING FINANCE FINANCE

OPERATIONSOPERATIONS

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What is Operations?

• It is the process by which inputs are transformed into outputs.

Input OutputTransformation

Process

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Types of Transformations

• Physical

• Locational

• Exchange

• Storage

• Physiological

• Informational

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What is Operations Management?

• It is the management of process by which inputs are transformed into outputs.

Input OutputTransformation

Process

Operations

Management

Resources:HumanMaterialFinancial Informational

Products &

Services

Definition

• Operations is responsible for supplying the product or service of the organization. Operations managers make decisions regarding the operation functions and its connection with other functions. The operations managers plan and control the production system and its interfaces within the organization and with the external environment.

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Goods and Services

Pure Good Pure ServiceMixture Goods & Service

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Key Decision Areas in OM

• Process• Quality• Capacity• Inventory

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Relation of Operations its environment

Operations transformation systemSuppliers

HumanResources

Marketing

Accounting Finance MIS

Engineering

SOCIETY

GOVERNMENT

ExternalEnvironment

CUSTOMERS

COMPETITORS

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Trends in OM

• Supply Chain• Globalization of Operations• Environmental Concerns• Customer-Directed Operations• E-Commerce

Trends in 2014

• Manufacturers will begin to build 3D value chains.• Operational, information, and consumer technology

converge to reshape approaches to technology management.

• Operational resiliency will be the focus of supply chain strategies in 2014 and beyond.

• Supply chain technology investment will involve modernizing existing systems, while also trying new approaches.

• The modernization of the underlying B2B commerce backbone becomes an investment priority for IT.

• Product life cycle management (PLM) strategies become increasingly global, multidisciplinary, innovation-based, and customer-focused.

• PLM initiatives will focus on value realization.

• “Servitization optimization” will be core to future profitable revenue growth and leading manufacturers will make the necessary investments to enable these strategies.

• On their way toward the factory of the future, 2014 will set the stage for a new manufacturing renaissance.

• Plant floor IT investments will continue to become a higher share of the overall technology investment portfolio.

How the Course Proceeds?• The course will be divided into four parts. • In the first part, we will examine general concepts such as

competitive leverage using manufacturing and operations, the fit of the various elements of manufacturing and operations, the impact of the competitive environment, and the structure of the value chain.

• In the second part, we will examine the key elements and decision categories in an operations strategy. These include facilities and capacities, technology, and the other decision categories noted above. In each of these areas, we will examine how different choices affect the business competitively and how to make decisions in each of these.

• In the third part of the course, we will examine different integrated strategic approaches, each of which places requirements on operations but allow different means for companies to compete. We will compare these different approaches and the tradeoffs among them.

• Finally, in the fourth part we will examine some issues in operations policy and strategy that are particularly relevant today. These issues revolve around outsourcing and globalization