How Technology Affects Operations
Operations strategy defines the way in which a firm competes in the marketplace. Examples of these strategies include (a) low cost, (b) quality, (c) speed of delivery, and (d) customization. As we learned in Chapter 2, managers in the past had to decide which of these strategies was most applicable to the particular market segment they were serving. In so doing, they recognized that there were trade-offs involved. For example. you couldn't have both low cost and a high degree of customization. or that there was a choice to be made between providing fast product delivery and providing a highly customized product. These traditional trade-offs are no longer valid for most businesses because technology has "raised the performance bar" by allowing firms to compete on several of these dimensions simultaneously. For example, firms using technology, such as Dell Computer.can now produce and quickly deliver individually customized products. and at a very competitive price. Technology now provides firms with the opportunity to move to a "superior" performance curve, as previously presented in Chapter 2; and shown again in Exhibit 4.1
In moving from AI to 81• a firm. for example, can achieve superior performance in terms of both lower cost and also faster service In comparison on a firm that doesn't use technology must remain on Curve A and consequently must revert to the traditional trade-off where improvement in one dimension is accomplished only at the sacrifice of another dimension (for example. ill going form A2 to A3 along Curve A, where lower cost is achieved only by providing lower service).