Operations & the Product Life Cycle Maturity Growth Development & launch Develop or decline Profit Operations Management in Tourism GHT 3652 Lecturer: E. Kasuto Room: Y042 Tel: 206-3267 ?/volume Loss Product Life Cycle Implications for Operations Strategy? Time Roles of Operations Manager What do Operations Managers do? Strategic change involves re-structuring, re-engineering Customer service criteria Enhanced Quality Dependability Range Maintainer – emphasises Schedule Dependability Quality Price/cost Strategic change involves enhancing the operation’s infrastructure
Marketeer – emphasises Innovator Quality Product/service performance Speed New prod. devel Reorganiser Quality Product/service performance Flexibility Speed • With your partner, choose “an operation” and list the main activities the operations manager must manage. ? role demands ? ? ? ? planning decisions coordination systems Basic Traditional Enhanced Operations process design The Operations Environment Competitive External Environment The Economy, the Society Staff & skills Design & Engineering Marketing Suppliers Ops: transformation system
Purchasing & Logistics Information Systems Customers Finance & Accounting Government 1 8/29/2012 Ops Mgt Decision Framework Operations Strategy 1. 2. 3. Product/operations strategy 4. Process choice choice trade-offs positioning capacity: size, timing, location ? role of inventory in process ? ? ? ? 5. Infrastructure ? function support ? ops planning & info systems ? QA & control ? systems engineering ? clerical procedures ? wage systems ? work & organisational structures ? ? ? ? ? Corporate objectives Growth Survival profit ROI other ? measures ? ? ? ? ? ? Winning orders Marketing in the strategy marketplace? Product/service ? price markets & ? quality segments ? delivery speed Range + reliability Mix ? responsiveness Volumes to demand Standardisation ? design features vs. customisation & leadership Level of ? product/service innovation range Leader vs. ? technical follower support Contribution to • competitiveness and market leadership Operations functions • needs clear, consistent, achievable objectives & implementation • A move from safe, conservative ops to market/fashion leader? equires different + better • responsiveness,quality, information, control, skills • production processes, supplier relationships • uses of technology and design applications Who & what drives ops strategy & technological innovation? Accountants, marketing, sales, partners, innovators and inventions, competitors, customers? Source: Hill T, Manufacturing Strategy, Macmillan, 1993 Strategic Management Environmental Scanning Operations Strategy Model Business strategy Operations Strategy Mission Distinctive Competence Objectives cost, quality, flexibility, delivery Evaluation & Control Mission
Strategy Formulation Internal & external analysis Vision Functional strategies: marketing, finance, engineering, staff & information systems Strategy Implementation • Disciplined, iterative process of driving towards vision, by finding or making and maintaining a defensible space or trajectory in a given business environment. Policies: process, quality systems, capacity,& inventory Consistent decisions Results What is Strategy? • • • • • • • • Plan Process Position Pattern Perspective Procedure Play Ploy • Strategic Management • Strategic Position • Strategic Navigation • Strategic Tactics
Strategy Checklist • Value proposition • Vision • Position or direction – Structure or resource base • Revenue & business model • Timeline or guidelines • Fit 2 8/29/2012 Value Proposition • Specific, concrete offer of benefits – Price, quality, convenience, choice, cost-savings, reliability, etc Vision • Stable core – Mission: Central audience + core product/service – Ideology: Values, principles, culture • To precisely defined customers – Who recognize that the offer solves a problem for the – EG: Our clients grow their business, large or small, typically by a minimum of 30-50% over the previous year.
They accomplish this without working 80 hour weeks and sacrificing their personal lives. • Focused ambition – Concrete picture of successful impact – Serious, scary stretch goals – Disciplined experimentation Vision Exercise • Stable core – Mission: – Ideology: – – – Position or Navigation? • Position Strategies Unique, valuable, defensible position in a market or industry Supported by a tightly integrated value chain / activity system Good for relatively stable industries/markets Vision-driven nurturing and leveraging of core resources Supported by tight culture and explicit learning Good for dynamic industries/markets Focused ambition – What success will look like – in the marketplace: – One audacious goal: • Navigation Strategies – – – Strategic Positions Require Niches External Opportunities & Threats Niche Internal Strengths & Weaknesses • A niche includes the market the firm is uniquely qualified to serve Strategic Situation External Factors Social, political, regulatory, technological & community Industry Attractiveness, dynamics, & competition Unmet customer needs & desires Strategic Situation
Resources (know-how, people, money, etc) Competitive position (through customers eyes & in industry) Vision, values & culture Internal Factors 3 8/29/2012 Linking operations to business strategy Policy Areas strategic alternatives Policy Marketing fits easily within corporate debate. Corporate bosses seldom have operations experience. Assume “operations” will cope. “We sell products & services NOT market segments” Process Examples In or out Automation Process flow Job specialisation Supervision QMS approach, Training, suppliers Facility size, Location, investment Stock levels, Distribution, Control systems
Strategic Choices Make or buy, automation, routinisation. FMS, JIT • product imitator • product innovator Quality Systems Capacity Stock & logistics Inspection or zero defects, technical & Managerial skills, costs of quality One big or several small facilities Near markets, low cost, or foreign Permanent or temporary High or low levels, centralised or decentralised, tight controls? Warehousing How to • qualify for market entry and • become “order winners” in a market. Focus on how products/services win orders NOW and TOMORROW 4