Operation Strategies

12822 Words Oct 27th, 2010 52 Pages
CHAPTER

Operations Strategy and Competitiveness
Before studying this chapter you should know or, if necessary, review 1. 2. The role of the OM function in organizations, Chapter 1, pp. 3–4. Differences between strategic and tactical decisions, Chapter 1, 9–10.

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LEARNING OBJECTIVES After studying this chapter you should be able to
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Define the role of business strategy. Explain how a business strategy is developed. Explain the role of operations strategy in the organization. Explain the relationship between business strategy and operations strategy. Describe how an operations strategy is developed. Identify competitive priorities of the operations function. Explain the strategic role of technology. Define
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28 • CHAPTER 2

OPERATIONS STRATEGY AND COMPETITIVENESS

In today’s highly competitive, Internet-based, and global marketplace, it is important for companies to have a clear plan for achieving their goals. In this chapter we discuss the role of operations strategy, its relationship with the business strategy, and ways in which the operations function can best support the business strategy. We conclude with a discussion of productivity, one measure of a company’s competitiveness.

THE ROLE OF OPERATIONS STRATEGY
The role of operations strategy is to provide a plan for the operations function so that it can make the best use of its resources. Operations strategy specifies the policies and plans for using the organization’s resources to support its long-term competitive strategy. Figure 2-1 shows this relationship. Remember that the operations function is responsible for managing the resources needed to produce the company’s goods and services. Operations strategy is the plan that specifies the design and use of resources to support the business strategy. This includes the location, size, and type of facilities available; worker skills and talents required; use of technology, special processes needed, special equipment; and quality control methods. The operations strategy must be aligned with the company’s business strategy
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