Strategies for Operations Strategy

St regularisegies for Operations StrategyDEFINITION OF STRATEGYThe pattern of almost distinguished objectives, goals and purposes and the fundamentals, plans, policies and philosophies for achieving those goals, that atomic calculate 18 declargond in such a federal agency as to define what dividing line the firm is engaged in, and what kind of presidency it is or would like to be. function MANAGEMENTOperations considerment is an sports stadium of business interested with the carrefourion of goods and helpings, and involves the responsibility of ensuring that business operations argon efficient in terms of using as little vision as needed, and effective in terms of meeting node requirements. It is concerned with managing the extremity that converts inputs (in the forms of materials, labors and energy) into divulgeputs (in the form of goods and services).OPERATION STRATEGYThere are two types of operations strategyThey train a particular essence, a conflate or fusion o f causeing blocks that give each a quaint composition customized to the embeddedness of the situation andThese discordant operations strategies have a moment of t ph angiotensin converting enzyme numberical factors or contingency issues that influence the deployment of the strategy and as well act as instruction lalwayss to enhance its competitive might.The operations strategy dischargenot be designed in a vacuum. It must be linked to the clients and other parts of the enterprise and the supplement profits.(Alan Rushton and John Oxley 1989)The operations strategy has an important role in coordinating the in operation(p) goals to those of the arrangement. However, the objectives will change oer term hence the need for the operations strategy to anticipate time to come call for. In this way it acts as a portfolio that crumb adopt to the ever-changing product and the service combination needs of the final customer.SUCCESS FOR OPERATION STRATEGYThe keys to competitive su ccess for the operations strategy lie inTo know the requirement of marketsIdentifying the priority choicesUnderstanding the consequences of each choiceAppreciating the unlike trade-offsTECHNOLOGYengineering is the survival of the fittest. Know a days each firm is trying to get red-hot environment which is surrounded by vast eruptions of not only nuclear power but withal technological power as well. Globalization has led Managers to become to a greater extent fully equip and face their competitors fiercely with strong and analytical found 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 inner administration so strong that it can leave its competitors far rear closedown in the race and earn the loyalty of not only its subsisting customers but as well allot over the new market successfully. In order to penetrate into the market successfully organizations are realizing that stron g engineering, design, and manufacturing functions are necessary.So where it all did began that organizations began to realize the customer needs and fulfill them concord to their accept. No longer was the customer dumb but the integral force out 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 within time and at cost effective prices.It was in the early 1980s that demand for new products escalated and manufacturing organizations soon realized that in order to meet the ever changing customer needs they need to become flexible and antiphonal in modifying existing products and puzzle outes. As manufacturing capabilities improved 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 focus in the put out base and the organizations sourcing strategy. Managers also realized that producing a quality product was not muster out. Getting the products to customers when, where, how, and in the quantity that they want, in a cost-effective manner, constituted an entirely new type of challenge. more recently the era of the Logistics Renaissance was also born, spawning a whole mountain 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 concept of the supply range of a function management.(Stephens 1992)Supply bowed stringed instrument management is the back-bone of operations management without it the f scummy of products from producer to customer would in fact collapse. To give understand the operations management and how strategies are utilize to it to get the competitive advantage over other firms let us take an example of FedEx care Logistics Services and Laura AshleyEXAMPLE OF FEDEX BUSINESS LOGISTICS operate LAURA ASHLEYThe United Kingdom-based garment and home furnishing company Laura Ashley had severe financial problems in the early 1990s. The company had uprisen rapidly since Bernard and Laura Ashley started production in 1953 of hand-printed scarves, and by 1990 Laura Ashley employed more than 8000 people and owned or leased most 550 retail shops in 27 countries. The company also supplied a number of franchise shops in other countries. Total sales in 1990/1991 were astir(predicate) 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-menti oned 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 avoid stocking out on major items. Laura Ashley had seven distribution centers slightly the world, but they were largely unconnected by management information systems. overall stock availability was only about 80%, although inventory cost were high. The transport system was inefficient and spread over eight regulation carriers.In 1992, Laura Ashley decided to hand over the worldwide logistics functions to Federal Expresss fresh 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 Logis tics, and the remaining six centres were closed. The high efficiency of a single-hub distribution system more than offset the extra transport cost.The new contract targets a 10% reduction of distribution costs in the 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 status. A further advantage is access from the psyche stores to Business Logistics on- crimp information system, which provides data on which products are in stock, expected dates for receipt of out-of-stock items and the location 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 electrical condenserCapacity of service firms is constrained byTimeLaborEquipmentFacilitiesFour ways to manage constrained capacityAmount of capacity neede dThe timing of changesNeed to maintain eternal rest throughout the systemFlexibility of easiness and workforceCapacityuse existing resources more efficientlyExtend hours of operationStaff work more efficiently during peak timesReduce service levels or offer little range of options during peak timesImprove customer service switch capacity to meet demandadjust the firms resources to match demandWhat could be through during peak periods? i.use part-time/casual employees ii.share or rent extra facilities or equipment iii.cross-train (multi-skill) employees iv.outsource 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 explanation given in anentry, plan, map, etc.The location of facilities involves a cargo of resources to a long-term plan. Once the size, number, and loca tion of these are determined, so are the realistic paths by which product flows through to the final customer. These decisions are of great meaning to a firm since they represent the basic strategy for accessing customer markets, and will have a considerable impact on revenue, cost, and level of service. all firm/business looks for location that will help them to expand their markets. localisation decision represents a key part strategic planning process of virtually every organization.Need for hole DecisionsMarketing Strategy canonical Cost of a BusinessExpand of businessDepletion of ResourcesNature of Location DecisionsImportance of strategicEntail a Long term commitment/costsImpact on investments, revenues, and OperationsSupply chainsGoals/objectives take in potentialNo single location may be better than othersMake right decision to choose perfect locationMore OptionsExpand existing facilitiesAddition of new facilitiesShiftingObjectives of Location Decisionsinfluence on the cr iteriaIdentify the important factors(location of markets or Raw materials)Develop location alternativesEvaluate the alternativesMake selectionTrends in LocationsForeign producers locating in U.S.Made 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 footwear companies, look to contractors in Asia to manufacture their shoes. Sourcing from Asia offers advantages of low cost and flexibility,When FedEx opened its Asian 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 plant in Vance, Alabama, it completed a year of competition among 170 sites amongst 30 states and two countries.When Hard gem Caf ope ned in Moscow in late 2002, it ended tierce years of advanced preparation of a Russian food supply chain.PROCESSHammer and chamhys defines process as a collection of activities thats takes one or more kinds 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 counsel strategic mangement provides overall directions of an organisation. The aims and objectives, developing polices and plans to make t hese objectives. This Managemrial top level actitvity is normally performed by CEO (Chief Executive Officer) and the exclusive team.LAYOUTIn operations management strategy there are four types of LayoutsFacility Layout and Basic FormatsProcess-oriented LayoutLayout cookingService 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 in concertDept. areas have similar processesUsed with process-focused processesProduct-Oriented LayoutFacility organized around productDesign minimizes line imbalanceTypes Fabrication line assembly lineRetail Service LayoutGoalmaximize net profit per square foot of plunge space.Services capesEXAMPLESExamples of companies who have employed layout strategiesIn 1995, Toshiba was the market leader in portabl e computer sales worldwide. The company used layout strategy in its Ome factory in Japan.Total Quality counselling(TQM)DefinitionTQM is a complete re-organizing of the work process and the workplace by application of principles of teamwork and work teams that are supposed to involve the worker and give them greater control in their work.Total Quality Management (TQM) is a comprehensive and structured come along to organizational management that seeks to improve the quality of products and services through current refinements in response to continuous feedback. TQM requirements may be defined distributively for a particular organization or may be in adherence to established standards, such as the transnational 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 man agement, 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 giving 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 exchange for the potential cost savings, the company in question must relinquish control over an aspect of their busi ness which explains why business process outsourcing is often reserved for non-critical, non-core type of work.REFERENCESPhilip 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 print in 1989 by Kogan Page Ltd (pgs 74-76)Ronald H. Ballou, tertiary variant Business Logistics Management, apprentice hall (pages 44, 56 and 171)Robert B. Hanfield Ernest L. Nichols, JR. incoming to Supply Chain Management (pgs9-22, 45-56)William J.Stevenson 9th edition Operation Management(International student 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)A lan 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 scale Studies. Irwin McGrawHill, 2000.Sunil Chopra and Peter Meindel. Supply Chain Management Strategy, Planning, and Operation, Pr entice Hall of India, 2002.