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Components or Elements of Operations Strategy

The document outlines 6 key components of operations strategy: 1) Designing production systems and products, 2) Focusing production facilities for specialization, 3) Designing and developing products through various stages, 4) Selecting appropriate technology and processes, 5) Efficiently allocating limited resources, and 6) Planning capacity, facilities, and layout to gain competitive advantages. These components involve making decisions around production design, equipment, resource allocation, and facilities to optimize operations.

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burhan shah
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234 views

Components or Elements of Operations Strategy

The document outlines 6 key components of operations strategy: 1) Designing production systems and products, 2) Focusing production facilities for specialization, 3) Designing and developing products through various stages, 4) Selecting appropriate technology and processes, 5) Efficiently allocating limited resources, and 6) Planning capacity, facilities, and layout to gain competitive advantages. These components involve making decisions around production design, equipment, resource allocation, and facilities to optimize operations.

Uploaded by

burhan shah
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Components or Elements of Operations

Strategy
Components of Operations Strategy include below main six components:
1. Designing and Positioning the Production
System
This element includes choosing the type of processing system, production
design, and finished goods inventory plan, etc. for each main line of product in
the business plan.

The two main types of Product design are


Custom Product Design- The custom design is the one when there is a low
volume and special features are already present or inbuilt. These types of
products are designed as per the requirements of individual customers. For
example, different products such as boilers, turbines, air compressors, etc.
come under this category.
Standard product Design- This is related to a universal design that is used to
provide a wide acceptance of the product among its customers. Both quantity
and demand are high in such a design. This is useful in quite large batches as
it helps in meeting the stable demand for the long-term. Fans, televisions, air
conditioners, etc. are a few examples of standard product design.
Production systems are of two types i.e.
Systems focused on products- This type of production system is used in mass
production through a group of machines such as computers, automobiles,
beverages, etc.
Systems focused on processes- This includes product designing on a single
activity or task such as packaging, painting, etc.
2. Focusing Production/ Manufacturing and
Service Facilities
One of the important elements of operations strategy is to plan for different
production facilities to achieve some sort of specialization in each of them.
This allows the production facility to gain a command over achieving specific
objectives because the equipment, procedures, and supporting systems can
focus on certain limited tasks for a particular set of customers.

So, we can say that some specialization in production facilitates an


organization to offer different benefits to its customers on products such as
reduce cost, quicker delivery, flexibility, timely delivery, high quality of the
product. Also, there will be a few overheads and the organization is able to
perform better than its competitors.

An organization should consider continuous demand patterns and economies


of scale at the time of making a plan of specialized product lines.

3. Design and Development of Product/ Service


Different stages or phases that are involved in designing and developing a
product or service include

 Idea generation
 Making the feasibility reports
 Prototype designing and testing
 Preparation of a production model
 Evaluation of production-related economies of scale
 Market-based testing of the product
 Taking feedback
 Developing final design and initiating the production
In new product development, activities such as marketing, operations,
engineering, etc. are considered. The product designing process creates a great
impact on the inventory level, quality of the product, production cost, and the
total number of suppliers.

Different products that are designed and launched in the market consist of
their own life cycle. Different phases of such life cycle include the following

 Introduction phase
 Growth phase
 Maturity phase
 Decline phase
The introduction phase is the one in which sales have dependability on efforts
related to promotion and marketing. If a product is successful at this level,
then it will come under the next phase i.e. growth. In the growth phase,
decisions are taken by the organization on future investments and the capacity
to be enhanced. In the maturity phase, the main focus of an organization is to
improve the efficiency related to processes, cost minimization, etc. The
declining phase is the phase where products may become obsolete in terms of
technology and the requirements of customers. This indicates the warning
sign to stop production. Different products such as floppy drives, typewriters,
recording tapes, etc. have lost their market as they have gone through the
above phases.

4. Selection of Technology and Process


Development
To determine the way of producing products is considered one of the essential
aspects of operations strategy. This includes making decisions and plans on
every detail of processes and facilities in production.

To achieve the optimum level of production, the analysis of the selected


product for production is conducted for the process and appropriate
technology. Operations managers face various challenges in taking such
decisions due to the availability of lots of options or alternatives.

Each alternative can be analyzed through techno-economic analysis for


making decisions related to the required technology. Combination of
production equipment of high-quality and conventional machines; and, use of
flexible manufacturing systems, robotics, automated devices for the purpose of
movement of materials, etc. have provided an advantage to the production
units to gain expertise in flexibility, quality, production at reasonable costs.
This enables the organization to compete in the market.

5. Resource Allocation
Usually, organization resources are limited for production purposes and so,
the continuous problems are faced by production units in the allocation of
limited resources such as cash, capital, workforce, machines, materials,
capacity, equipment, services, etc. The allocation of these resources must be in
a way that helps in achieving the goals of operations up to a maximum extent.

Also, allocating these resources at the right time and place of production
shows the efficiency level of production managers. Economical production can
be achieved by utilizing resources in an optimal way. A sound operations
strategy is required to obtain superior quality products, minimize wastage and
optimum utilization of available resources.

6. Planning of Capacity, Facility, and Layout


The key decision areas of an operations manager are to create layout, facilities,
and location for the production as these are considered critical areas to
achieve competitive advantage. The expansion of the manufacturing unit in
the future also depends on this decision.

Decisions include in this are related to the land and equipment acquisition for
production, location of new manufacturing units.

At the time of evaluation of different alternatives, the operations manager also


considers market access, and availability of materials, etc. Huge capital is
needed for production capacity.

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