Download - 3 Operations Strategy
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Operations Strategy
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Sonoco Products
Co.
Using Operations Strategy Founded in 1899, it is a $4.1 billion global manufacturer of
industrial and consumer roducts and ro!ider of ac"agingser!ices to customers in 8# nations at # locations.
%t &as 121 manufacturing lants in 'ort& (merica.
)trateg* %s +e*. ne !er* successful oerations strateg* wast&at it located in countries wit& fa!orable ta- laws.
(not&er rofitable strateg*. %t too" ad!antage of e-c&ange ratedifferences and a wea"ening dollar.
oing green/ Hea!il* into t&e rec*cling business and reducingits emissions and energ* use.
'amed b* ororate esonsibilit* fficer 3 magaineas one of 20095s 100 6est ororate itiens.
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Operations Strategy
Operations strategyfocuses on &ow a firm7soerations function oerations area3 can bestcontribute to t&e organiation7s o!erall strateg*.
( firm7s operations function is it7s "e* business.
Operations strategy lin"s long:term ands&ort:term oerations decisions to corporate
strategy. Operations strategy is how you manage the
firms operations processes to add value.
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Operations Strategy
Corporate strategy;iews t&e organiation as a s*stem of interconnected arts,
eac& wor"ing wit& t&e ot&ers to ac&ie!e desired goals.
Operations Strategy)uorts t&e cororate strateg*.
e
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Developing a
Corporate Strategy
Developinga corporate strategy
involves three considerations:
1. %dentif*ing a coman*7s Strengt&s andWea"nesses.
2. >onitoring t&e en!ironment for trends,
Oortunities ? T&reats.. @e!eloing t&e core competencies
S.W.O.T.
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Core Competencies
Core Competenciesare t&e uni
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Core Processes
%nuts =ransformation ututs
Supplier Relations Customer Relations
Developing ew
Products and Services
illing
Customer Orders
Core Processes usually include:
>ost firms &a!e all of t&ese but focus on a subset of t&em,as determined b* its core cometencies w&at it7s good at3.
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"lobal Strategies
glo!al strategyma* include bu*ing foreignser!ices or arts, andCor entering or e-andingforeign mar"ets.
=wo oular global strategies are/
". Strategic lliances wit& foreign comanies
a3 ollaborati!e efforts
b3 Doint !entures
c3 =ec&nolog* licensing
#. $ocating and operating a!road
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#arket $nalysis
( %ar&et nalysisidentifies *our customersand t&eir needs.
%t is accomlis&ed in two arts/
". %ar&et Segmentation: %dentif*ing grous ofcustomers wit& enoug& in common to warrantde!eloing ser!ices andCor roducts for t&em.
#. 'eeds ssessment:%dentif*ing t&e needs ofeac& mar"et segment. 'eeds include suc&t&ings as/ )er!ice or roduct needs @eli!er* s*stem needs ;olume needs
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rriving at the
Competitive Priorities
rriving at the
Competitive Priorities
Competitive priorities cost (uality time
fle)i!ility
Competitive priorities cost (uality time
fle)i!ility
%ar&et analysis segmentation needs analysis
%ar&et analysis segmentation needs analysis
Corporate Strategy environmental scanning core competencies core processes
glo!al strategies
Corporate Strategy environmental scanning core competencies core processes
glo!al strategies
E elations&is wit& ustomers
E elations&is wit& )uliers
E @e!eloing new roducts and ser!icesE Filling rders
).A..=.
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Competitive Priorities COST Low ost3
*+$,TY
Hig&:erformance @esign
onsistent Gualit*
T,%- Fast @eli!er*
n:time deli!er*
@e!eloment seed
$-/,0,$,TY
ustomiation
;ariet*
;olume Fle-ibilit*
Most valued
by firmsbuying from
other firms
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%aw o&
Competitive Priorities
F()=
H(
@Pic& any two1 %f *ou can ma"e it fast and c&ea,good and c&ea, or fast and good, *ou will be
!er* cometiti!e.>an* comanies do one of t&ese, but t&e
reall* good ones e-cel in two of t&ese areas.
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Competitive Capabilities
( firm7s Competitive Capa!ilitiesare t&ecometiti!e riorities t&at a firm actually
possesses and is able to deliver. ( coman* ma* not be caable of doing well
in all cometiti!e riorit* areascostC
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Competing on Cost
$ow Costmeans deli!ering a ser!ice orroduct at t&e lowest ossible cost to t&e
satisfaction of t&e customer.
For most roducts and ser!ices, low cost and&ig&
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Top *uality/ @eli!ering an outstandingser!ice or roduct. onsiderable interaction wit& t&e customers
ma* be re
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(imeas a
Competitive Capability
Delivery Speedis
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Customi2ationmeans satisf*ing t&e uni
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orthrop "rumman
ewport ews Ship *uilding
=&e world7s onl* roducer of full:siedaircraft carriers suer carriers3
Long lead timesof 8 *ears or moreoften in!ol!e man* c&anges.
=&eir rocesses &a!e a &ig& degree of
fle-ibilit*to &andle c&anges in design. Fle-ibilit* in wor"force s"ills as well as
rocess fle-ibilit* is necessar*.
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Product Decisions
rocess A&at rocesses s&ould beused to ma"e t&e roductB3
Location A&ere s&ould t&e facilitiesbe locatedB3
La*out How s&ould our facilities be
arrangedB3 aacit*A&at sie facilit*B3
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Service or Product
Development Strategies
Product 3ariety/ ffering a wide assortment. 4esign/ ase of use and desirable features ,nnovation/ =ranslate new tec&nolog* into roducts
Service/ roducts wit& ser!ice ac"ages added
>(+= '=I
%ar&et $eader/ 6eing first to introduce new ser!icesandCor roducts
%iddle of the 5oad/ Aait for t&e leaders to introducenew ser!ices andCor roducts.
$aggard/ Aait to see w&ic& new ser!ices andCorroducts catc& on in t&e mar"et.
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Service Package
( Service Packageis a collection of goodsand ser!ices ro!ided b* a ser!ice rocessto its customers.
=&e ser!ice ac"ages t&at come wit& t&e$200J te-tboo" t&at % didn7t re
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Product %i&e Cycle
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Product Planning ,
Development Phase
Product selection anddesign nalysis @etermine mar"et feasibilit* Gualit* le!el, of models
4evelopment rocess @esign/ M@eciding &ow to ma"e t&e roduct3 )ulier selection/ A&at materials ? arts do we bu*B3 )er!ice ac"age A&at ser!ices s&ould it includeB3
ull $aunch 6egin roduction, mar"eting ? distribution
rocesses
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Development Process
Service or product
not via!le
'eed to rethin&
the idea.
Post6launch
review
4esign
)ecifications arede!eloed for newser!ices or roducts nalysis
( critical re!iew of &owit will be roduced,
resource re
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Concurrent -ngineering
Concurrent -ngineering is Teamwork t&atbrings toget&er roduct engineers, rocessengineers, mar"eters, bu*ers, information
secialists,
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Product
ntroduction Phase
roduct c&anges often occur.
rocess c&anges ma* be
necessar*. )ulier de!eloment, if not done alread*.
roduct &oefull* starts to s&ow rofitabilit*.
erations must &a!e a lot of fle-ibilit* during
t&is &ase. low:!olume, &ig& fle-ibilit*3
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"rowth Phase
roduction caacit* c&anges to "ee uwit& c&anging demand.
Fine tuning roducti!it*
oncern for
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#aturity Phase
rowt& slows and stos
ost control and reduction Competition is heavy, re
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Decline Phase
roduction &ase:down
roduct termination
roduct suort issues roduction &as gone from a low:!olume, &ig&l* fle-ible
oeration introduction3 to a &ig&:!olume, low fle-ibilit*oeration maturit*3 and bac" again to a low:!olume
oeration decline &ase3. =&is re
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%i&e)Cycle $udit
products life cycle is how long the product is on the mar&et.
( $ife6cycle auditis eriodicall* done to determine t&e life:c*cle stageof eac& roduct.
)ome roducts &a!e long life c*cles and ot&ers &a!e s&ort life c*cles.
>ar"eting strateg* and roduction strateg* c&ange wit& eac& life c*cle.
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#arket entry0e+it
strategies
arl* ntr* : Late -it %ntroduction t&ru @ecline %arge, innovativemarket leaders wit&
economies of scale for &ig&:!olumecometition.
arl* ntr* : arl* -it %ntroduction t&ru Late rowt& Smaller/ innovative &irms t&at can bring new ideas
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-arly -ntry/ %ate -+itntroduction phase Decline Phase
( common strateg* for large comaniest&at are inno!ati!e and mar"et leaders.
roduction strategies go t&roug& t&eentire sectrum. Low !olume Hig& !olume Low !olume
Hig&:cost roduction Low:cost roduction
Fle-ible roduction %nfle-ible roduction
Low efficienc* Hig& efficienc*
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-arly -ntry/ -arly -+itntroduction phase "rowth phase
)maller, %nno!ati!e firms.
aid de!eloment of new roductions.
@on7t &a!e t&e economies of scale tocomete in a &ig& !olume, low cost,mar"et.
=&e* tend to get boug&t out or t&e* sellor license t&eir atents to largercomanies.
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%ate -ntry/ %ate -+it"rowth Stage Decline Stage
=&e oosite strateg* of t&e earl* entr*,earl* e-it.
=&ese are large firms t&at wait:to:seew&at new roducts or ser!ices are &ot,and t&e* Num in wit& similar roducts.
=&e* ma* manufacture t&e items, bu*out t&e small firms or bu* into t&e firmswit& t&e &ot items.
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Corporate Strategy and 1eyOperations #anagement Decisions
Capa!ilities
Performance8ap7
o
2esOperations strategy
Decisions %anaging Processes %anaging 3alue Chains
ew Service0
Product Development
ew Service0
Product Development
%ar&et analysis
Competitive priorities
Corporate strategyCorporate strategy