Factory Focus and Trade-Offs
The notion of factory focus and trade-off’s was central to the concept of operations strategy during the late 1960 and earl 1970 The underlying logic was that a factory could excel simultaneously on all four competitive priorities. Consequently management had to decide which priorities were critical to the firm’s success and then concentrate or focus the resources of the firm on those particular characteristics. For firms with very large manufacturing facilities Skinner suggested the creation of a plant-within-a-plant (PWP) concept. in which different locations within the facility would be allocated to different product lines. each with their own competitive priority. Even the workers under the PWP concept.
would be separated in order to minimize the confusion associated with shifting from one type of priority to another
For example if a company wanted to focus on speed of delivery then it could not be very flexible in terms of its ability to offer a wide range of products. As example McDonald’s provides very fast service but offers a very limited menu of highly standardized products in contrast Wendy’s makes your request to order but takes longer to driver Similarly a low-cost priority was not seen to be compatible with either speed of delivery or flexibility. High quality also was viewed as a trade-off to low cost. The need for focus has been recognized in other service operations as well. Hotel chains such as Marriott and Holiday Inn have segmented the hotel industry and now offer a wide variety of products each focused on a different market segment For example within the Marriott group there is Fair field Inns for economy-minded customers; Marriott Hotels
and Resorts for conferences and for customers wanting-full-service hotels Residence Inns for customers wanting more than just a hotel room and Marriott Courtyards for those wanting certain hotel conveniences such as meals but who are still concerned about price. Skinner’s PEP concept is now also being applied to the health care industry where hospital within-
hospitals” allow specialized firms to focus only on specific ailments. For example intensive accepts only long-term acute patients and operates independently within the facilities of St. Francis Hospital in Beech Grove Indiana. Because it specializes in only one area intensive care intensive’s operating are 50 percent lower than those of a typical intensive care ward not Other examples of focused operations in the service sector include Bank Boston’s Private Bank Division which focuses on providing ‘a full line of banking services to wealthy customers A bank within a bank which is again not unlike Skinner’s plant-within-aslant concept and Should ice Hospital in Toronto Canada which performs only one type of hernia operation. The benefits of a focused operation can be readily demonstrated at Should ice Hospital whose very unusual product is a “hernia vacation:’ Patients are admitted to a mansion like hospital in a beautiful setting outside Toronto Every detail of the hospital’s operations is focused on providing high-quality hernia care and a congenial restful atmosphere. Patients mingle mix and generally relax enjoying the experience so much that the annual reunion dinner is oversubscribed. This highly focused care permits Should ice to keep operating costs low while maintaining high quality both in terms of medical care and patient service However by becoming a specialist facility Should ice does not have the capabilities to perform other types of medical treatments.