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Strategic Operations Management

Strategic operations management helps organizations improve effectiveness, efficiency, and flexibility. It also allows companies to identify and prioritize opportunities. An operations strategy specifies how resources will be allocated to support production and minimize costs while maximizing support elements, in line with the overall business strategy. There are five generic competitive performance dimensions for operations: overall low-cost provider; broad differentiation; best cost-provider; focused low-cost strategy; and focused differentiation strategy. Process analysis models processes to understand impacts on performance and support management decision-making. Project planning defines objectives, goals, tasks, and resources to deliver value. Forecasting provides knowledge of future events to inform planning. A functional structure divides a company into specialized departments to improve efficiency through

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Al Joshua Ü Pidlaoan
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66 views3 pages

Strategic Operations Management

Strategic operations management helps organizations improve effectiveness, efficiency, and flexibility. It also allows companies to identify and prioritize opportunities. An operations strategy specifies how resources will be allocated to support production and minimize costs while maximizing support elements, in line with the overall business strategy. There are five generic competitive performance dimensions for operations: overall low-cost provider; broad differentiation; best cost-provider; focused low-cost strategy; and focused differentiation strategy. Process analysis models processes to understand impacts on performance and support management decision-making. Project planning defines objectives, goals, tasks, and resources to deliver value. Forecasting provides knowledge of future events to inform planning. A functional structure divides a company into specialized departments to improve efficiency through

Uploaded by

Al Joshua Ü Pidlaoan
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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STRATEGIC OPERATIONS MANAGEMENT

1. Discuss the importance of Strategic Operations Management:

Strategic Operations Management helps the organization increase its performance through:
Improving Effectiveness, Efficiency and Flexibility. Additionally, it also allows for identification,
prioritization and exploitation of opportunities.

2. What is operations strategy? Explain your answer.

A plan specifying how an organization will allocate resources in order to support infrastructure
and production. An operations strategy is typically driven by the overall business strategy of the
organization, and is designed to maximize the effectiveness of production and support elements
while minimizing costs.

3. There are five generic performance competitive dimensions that are particularly
relevant to the operations and supply chain activities. Enumerate and explain your
answer.

a. Overall Low-Cost Provider: This strategy strives to achieve lower costs than rivals which can
appeal to a broad spectrum of customers, usually by underpricing rivals.
b. Broad differentiation: This strategy seeks to differentiate the organization’s products from
that of rivals in ways that appeal to a broad spectrum of customers.
c. Best Cost-provider strategy: giving customers more value for their money by incorporating
good-to-excellent product attributes at a lower cost than rivals; the target is to have the
lowest (best) costs and prices compared to rivals offering products with comparable
attributes.
d. A focused (or market niche) strategy based on low costs: concentrating on a narrow buyer
segment and outcompeting rivals by having lower costs than rivals and thus being able to
serve niche members at a lower price.
e. A focused (or market niche) strategy based on differentiation-concentrating on a narrow
buyer segment and outcompeting rivals by offering niche members customized attributes
that meet their tastes and requirements better than rivals' products.

4. Discuss process analysis.

An operation is composed of processes designed to add value by transforming inputs into useful
outputs. Inputs may be materials, labor, energy, and capital equipment. Outputs may be a
physical product (possibly used as an input to another process) or a service. Processes can have
a significant impact on the performance of a business, and process improvement can improve a
firm's competitiveness.

Process analysis gives an effective management decision tool by thoroughly plotting the whole
process and provide the management understanding of the whole process of the organization.
Process analysis can also set the base for which the process can be modelled under different or
future circumstances in order to answer management questions on how will the processes
react, handle or the cost base change under the new conditions.

5. Differentiate direct labor content with Direct labor utilization.

a. Labor Content: The total labor content is defined as the time sum of all process steps.
b. Direct labor utilization: calculations show the business what portion of its total payroll
expense pays for direct labor, which is labor that directly relates to income-generating
projects

6. Explain the importance of project management.

Project management is important because:


a. it ensures what is being delivered, is right, and will deliver real value against the business
opportunity;
b. it brings leadership and direction to projects;
c. it ensures there’s a proper plan for executing on strategic goals;
d. it ensures proper expectations are set around what can be delivered, by when, and for how
much;
e. it ensures the quality of whatever is being delivered, consistently hits the mark;
f. it ensures risks are properly managed and mitigated against to avoid becoming issues;
g. it ensures the right people do the right things, at the right time – it ensures proper project
process is followed throughout the project lifecycle;
h. it ensures a project’s progress is tracked and reported properly;
i. someone needs to be able to understand if everyone’s doing what they should; and
j. it learns from the successes and failures of the past.

7. Discuss what is project planning all about.

Project planning is the process of defining your objectives and scope, your goals and milestones
(deliverables), and assigning tasks and budgetary resources for each step. A good plan is easily
shareable with everyone involved, and it’s most useful when it’s revisited regularly. Simply
outlining a plan and never discussing it with your team again is a good recipe for wasted time
and effort.

8. Explain the importance of forecasting. Give example

In preparing plans for the future, the management authority has to make some predictions
about what is likely to happen in the future. It shows that the managers know something of
future happenings even before things actually happen. Forecasting provides them this
knowledge. Forecasting is the process of estimating the relevant events of future, based on the
analysis of their past and present behavior.

a. Economic Forecasting – the process of making predictions about the economy. It addresses
the business cycle.
b. Technological Forecasting – it monitors the rates of technological advancement. This keeps
the organization abreast of trends.
c. Demand Forecasting – projections of demand for a company’s products or services.

II – Illustrate and explain Functional Organizational Structure. Give the advantages of this
structure

An organization can be arranged according to a variety of structures, which determine how the
organization will operate and perform. In a functional structure, a common configuration, an
organization is divided into smaller groups by areas of specialty (such as IT, finance, operations,
and marketing). Some refer to these functional areas as ” silos “—entities that are vertical and
disconnected from each other. Correspondingly, the company’s top management team typically
consists of several functional heads (such as the chief financial officer and the chief operating
officer). Communication generally occurs within each functional department and is transmitted
across departments through the department heads.

Advantages of a Functional Structure


Functional departments arguably permit greater operational efficiency because employees with
shared skills and knowledge are grouped together by functions performed. Each group of
specialists can therefore operate independently with management acting as the point of cross-
communication between functional areas. This arrangement allows for increased specialization.

THE END

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