Operational Strategy

Presented By:
PRATIMA SINGH MBA-IB (3rd SEMESTER) Amity Business School Amity University, Lucknow.

When you reach for the stars, You may not quite get them. But you wont come up with a handful of mud either

Definition

Operations strategy is the total pattern of decisions which shape the long-term capabilities of any type of operations and their contribution to the overall strategy, through the reconciliation of market requirements with operations resources.
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According to Slack and Lewis, operations strategy holds the following definition:

Understanding Operations
The

company has an ultimate goal of delivering goods to a client. The processes of:

designing, manufacturing, analyzing and then finally being delivered are the driving forces for the company's success.

Contd

All these chunks of works processes that collectively define a bigger purpose, the operations for that particular organization. The more effective these processes or operations would be, the more productive and profitable the business would be.

Competing Priorities
Corporate Strategy

Environmental scan Core Competencies Core Processes Global Strategies

Market Analysis

Competitive Priorities
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Operation Strategy Elements

Procurement

Product Design Location

Quality Mgmt

Operations Mission & Strategy

Layout

Process Design

Inventory
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Develop an Operations Strategy

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Contd
What products

can be produced in which facility and how much? Which products are going to be produced internally, and which ones will be purchased? How many facilities are needed?

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Contd
Where will

the facilities be located, with how much capacity? What type of processes will be utilized to produce products? How much flexibility is required from each process and each product?

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Contd
What level of

technology (automation, etc.) will be used? Are the resources going to be owned or bought? How will the products be distributed to the end customers?

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Contd
Which suppliers

and how much? What kind of human skills are needed? And so on.

will provide materials,

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Perspective of Operations Strategy

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The Four Perspective are:

Top Down Approach Market requirement perspective Operation Resource Bottom-Up Approach

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5 Ps of Operating Strategy
Purpose Point of Entry Process Project Management Participation

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Operations Strategy of Wal-Mart

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Vision & Mission

Saving peoples money to help live better. Offer best quality merchandise at lowest

price.

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Profile
Founded in 1962. Has 8,446 retail clients under 55 different banners in 15 countries. Largest private employer. Sales of $405 billion in 2010. Leader in low cost retailing industry.

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Operations Strategy:

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Contd
Capturing market share with everyday low price strategy. Responding to competitors strategy. Training employees because people are key to Wal-Mart's business.

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Capacity Planning:

1.

Essential elements of capacity planning:

Facility; Product & Service; Human Resource.

2.
3.

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Facility Factor:
Shop location Shop layout Shop size

Warehouse size

Warehouse layout

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Product Service
Everyday low price; Lower price than competitors; Lower operational costs.

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HR Factor
2.1 million employee all over the world 1.4 million employee only in

U.S.

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Reasons
Predicts demand and optimizes stocks. Operational efficiency. It builds new stores and doesnt buys other chains. Global expansion for new market opportunity. Builds 10% of space for storage.

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Contd
Efficient supply chain. Service differentiation. Consistent service. Just- in- Time.

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Conclusion
Create advantage by managing warehouses and stores Create culture of supporting values, skills, technologies, customer relationship.

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THANK-YOU!!
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