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Operation Strategy

The document discusses operations strategy and provides examples from McDonald's. It describes operations strategy as a plan for how the operations function can best use resources to contribute to overall strategy. McDonald's operations strategies focus on speed, cost, and quality through processes like just-in-time inventory, efficient equipment, and quality control centers. The strategies are aimed at preparing food quickly at low competitive costs while maintaining product consistency.

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vaishnav loya
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143 views

Operation Strategy

The document discusses operations strategy and provides examples from McDonald's. It describes operations strategy as a plan for how the operations function can best use resources to contribute to overall strategy. McDonald's operations strategies focus on speed, cost, and quality through processes like just-in-time inventory, efficient equipment, and quality control centers. The strategies are aimed at preparing food quickly at low competitive costs while maintaining product consistency.

Uploaded by

vaishnav loya
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Introduction

• Total pattern of decisions which shape


the long-term capabilities of any type
of operations and their contribution to
the overall strategy.
• The role of operations strategy is to
provide a plan for the operations
function so that it can make the best
use of its resources. ... Remember that
the operations function is
responsible for managing the
resources needed to produce the
company's goods and services.
Four important Operation Strategies

Service-oriented companies also use basic operational


strategies to link long- and short-term corporate decisions
and create an effective management team.
• Corporate Strategy and Cross-Functional Interactions
• Customer-driven Strategies
• Developing Core Competencies
• Development of Competitive Priorities.
7 Operational Strategies to Remain Competitive and
Efficient
• Continual Development of New Product/Service Offerings
• Optimize the Supply Chain
• Get news like this delivered to your inbox every week
• Increased Labor Cost, Decreased Availability
• Bridging the Manager Talent Gap
• Managing Inventory
• Cloud and Subscription Software Models
• Finally, Adopt Continuous Process Improvement
10 Decision Areas of Operations Management
• Here are five different strategies that can help shake
loose your business operations and free up resources
that you could better use elsewhere.
• Go Lean. ...
• Focus on Quality. ...
• Improve Forecasting. ...
• Introduce Customer-Centric Thinking. ...
• Try Some Old-Fashioned Business-Process
Reengineering.
Four levels of strategy
Components of Operations Strategy
Example of Operations Strategy

• McDonald’s Operations Strategy based on Competitive


Priorities
continue...

• Fast-food giant McDonald’s business strategy is aimed at


preparing food for its customers on the fast track and
comparatively low competitive cost.
• It also includes earning profit by cost reduction of its products and
expansion of its business across the world.
• To meet the above organizational goals, the Operations
strategies of McDonald’s play a vital role.
• The company is able to maintain and control all of its operational
activities. Top management of the company develops its
operations management strategies and the same are
implemented by different branches of McDonald’s.
• Also, these operations strategies are circulated to other
franchisee branches in a written format.
• Different operations managers allocated at different branches
oversees the monitoring and controlling part of all operational
activities.
• Through the increased use of information technology, McDonald’s
is able to introduce new ideas and ways to enhance its
operational activities. Through its stock control database system,
it is possible to avoid unnecessary ordering, and also, stock can
be maintained up to date in the store. It has become easy to
order the stock in less time.
• McDonald’s operations strategies are based on its
competitive priorities that include the affordable and
friendly cost of products, quality of products by offering
many healthy meal options and superior quality services,
speediness of services, flexibility, etc.
Speed or less service time

• By considering the fact that customers seek fast delivery


services as their top priority, McDonald’s started
providing fast, accurate and friendly services to meet the
demand of its customers. This enables the selling of the
products at a reduced cost. Moreover, one of the reasons
for the fast delivery of orders is that most of the products
of McDonald’s are in the form of ready to serve as these
have to put in the ovens of superior quality and usually,
the order is ready within very few minutes.
Cost
• McDonald’s has adopted different operations strategies to provide products to
customers at a discounted price and to reduce the cost of its operations.

• The company is using efficient equipment to enhance the speed of producing its
products. McDonald’s uses fluorescent low consumption lighting that plays a
crucial role in the cost reduction of operations. The use of cooking oil by the
company in transport operations also contributes to reducing operations costs.

• McDonald’s has also reduced operational costs by purchasing most of the


vegetables (especially potatoes) directly from the farmers. This facilitated the
company to reduce the cost associated with the production of chips.
continue...

• Apart from the above, McDonald also has a low-cost


supply chain system and they have incorporated a just-in-
time strategy to reduce the cost related to wastage and
unnecessary storage.
Quality
• The service quality of McDonald’s can be measured through the time
invested in processing orders and customer products. The policy of five Ps i.
e. product, price, people, promotion, and the place has been applied by
McDonald’s to enhance the quality of its services.

• The product consists of quality, taste, and price of products of the company.
To maintain food quality is always considered McDonald’s top preference.

• McDonald’s staff (people) are well trained to serve customers in an efficient


way. The company always takes the necessary steps to reduce its operation
cost.
continue...
• Place includes relevant, clean, surrounding areas with modern amities of
McDonald’s such as restaurants, restrooms, or kitchen, etc. It aims at
comfort level and safety for the customers.

• Promotion is related to marketing and trust-building activities.

• Moreover, there are three quality centers of McDonald’s in Asia, Europe, and
North America. These quality centers ensure that different famous dishes of
McDonald’s like French Fries, Big Macs, and Chicken McNuggets, etc.
always meet their standards and a great level of taste. These centers are
used by the company to provide training for suppliers and examine the
quality of products for taste and consistency.
Flexibility
• There are three forms of flexibility in McDonald’s i.e.

• Mix flexibility: This includes producing a wide range of products


through an operation so that customers can select from them.

• Product or service flexibility: This consists of generating new


ideas or ways to incorporate in producing food items or services
so that customers can find them more attractive.

• Volume flexibility: In this, the adjustments are being made in the


output level of McDonald’s in order to tackle the unexpected
changes that occur in demand for products

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