What is Operations Strategy?
Operations strategy is concerned with the development of a long-term plan for determining how to best utilize the major resources of the firm so that there is a high degree of compatibility between these resources and the firm’s long-term corporate strategy Operations strategy addresses very broad questions about how these major resources should be configured in order to achieve the desired corporate objectives As stated earlier some of the major long-term structural issues addressed in operations strategy include
How big do we make the facilities?
Where do we locate them?
When do we build them?
What type of process(es) do we install to make the products?
Each of these issues is addressed-in greater detail in subsequent chapters. In this chapter we want to take a more macroscopic perspective to better understand how these issues are interrelated. In developing an operations strategy management also needs to take other factors into consideration. These include (a) the level of technology that is or will be available. (b) the
required skill levels of the workers and (c) the degree of ‘vertical integration in terms of the extent to which outside suppliers are used. As shown in Exhibit 2.1 operations strategy supports the long-range strategy developed at the SUB level. One might say that decisions at the SUB level focus on being effective that is on doing the right things.’ These decisions are sometimes referred to as strategic planning. Strategic decisions impact intermediate-range decisions. often referred to as tactical planning. which focus on being efficient. that is doing things right.’ Here the emphasis is on when material should be delivered when products should be made to best meet demand and what size the workforce should be. Finally we have planning and control which deals with the day today procedures for doing work. including scheduling inventory management and process management.