operations strategy
set of competitive priorities coupled with supply chain structural and infrastructural design choices intended to create capabilities that support a set of value propositions targeted to address the needs of critical customers.
corporate strategy
determines the overall mission of the firm and the types of businesses that the firm wants to be in
strategic business units (SBUs)
semi-independent organizations used to manage different product and market segments
business unit strategy
determines how a strategic business unit will compete
functional groups
internal operations, marketing, accounting, engineering, supply management, logistics, and finance, etc.
functional strategy
determines how the function will support the overall business unit strategy
critical customer
the customer or customer segment receiving the firms focus because it is critical to the firms current or future success
value proposition
all the tangible and intangible benefits that customers can expect to obtain by using the products offered by the firm
capabilities
operational activities that the firm can perform wel; these define the types of problems and solutions that operations can address proficiently
order winners
product traits that cause a customer to select one product over its competitors
order qualifiers
product traits that must be met at a certain level for the product to be considered by the customer
order losers
product traits that if not satisfied, cause the loss of either the current order or future orders.
4 characteristics of a well-designed value proposition
offers a combination of product features that customers find attractive and are willing to pay for, differentiates the firm from its competition in a way that is difficult to imitate, it satisfies the financial and strategic objectives of the firm, and it
quality
products fitness for consumption in terms of meeting customers needs and desires
timeliness
degree to which a product is delivered or available when the customer wants it
lead time
the amount of time that passes between the beginning and ending of a set of activities
time to market
the total time that a firm takes to conceive, design, test, produce, and deliver a new or revised product for the marketplace
order to delivery lead time
the time that passes from the instant the customer places an order for a product until the instant that the customer receives the product.
cost
the expenses incurred in acquiring and using a product
innovation
both radical and incremental changes in process and products
flexibility
operations ability to respond efficiently to changes in products, processes, and competitive environments
sustainability
maintaining operations that are both profitable and non damaging to society or the environment
risk management
developing operations that anticipate and deal with problems resulting from natural events, social factors, economic issues, or technological issues.
capabilities
unique and superior operational abilities that stem from the routines, skills, and processes that the firm develops and uses
core capabilities
skills, processes, and systems that are unique to the firm and that enable it to deliver products that are both valued by the customer and difficult for competitors to imitate
fit
the extent to which there is alignment between the firms operational capabilities, its value proposition, and the desire of its critical customers
strategic decision areas in operations management
capacity, facilities, technology, supply chain network, workforce, production planning and control, product/process innovation, organization and management
strategic profit model (SPM)
a model that shows how operation changes affect the overall performance of a business unit (also called DuPont model)
balanced score card
an integrative approach for developing strategic, organizational-level metrics
supply chain operational reference model (SCOR)
a model for assessing, charting, and describing supply chain processes and their performance
external components of SCOR
delivery reliability, responsiveness, flexibility
internal components of SCOR
costs, asset management efficency