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Lecture 3

The document discusses production and operations management strategies in a global environment, highlighting the importance of globalization for improving supply chains, reducing costs, and enhancing operations. It outlines the significance of organizational strategies, including vision and mission statements, and the role of core competencies and outsourcing in achieving competitive advantage. Additionally, it presents various strategic approaches to gain a competitive edge, such as differentiation, cost leadership, and responsiveness.

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3 views

Lecture 3

The document discusses production and operations management strategies in a global environment, highlighting the importance of globalization for improving supply chains, reducing costs, and enhancing operations. It outlines the significance of organizational strategies, including vision and mission statements, and the role of core competencies and outsourcing in achieving competitive advantage. Additionally, it presents various strategic approaches to gain a competitive edge, such as differentiation, cost leadership, and responsiveness.

Uploaded by

ansh kumar
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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Production and

Operations Management
Syed Sajjad Ahmed
Head of Supply Planning & Sourcing @ Shell Pakistan
Visiting Faculty - IBA
Operations Strategies in
Global Environment

2
3 Boeing 787 Dreamliner
4

© Dr. Muhammad Wasif


5

Boeing 787
Dreamliner
6 Globalization Strategies
 Boeing – sales and supply chain are worldwide
 Sony – purchases components from suppliers in
Thailand, Malaysia, and around the world
 Volvo – considered a Swedish company, recently
purchased by a Chinese company, Geely. The
current Volvo S40 is assembled in Belgium, South
Africa, Malaysia and China on a platform shared
with the Mazda 3 built in Japan and the Ford Focus
built in Europe.
 Deepseek (a Gen AI platform) is developed as the
open-source platform using the NVIDIA A100
chipset.
7 Reason to Globalize

 Improve supply chain (proximity to Unique resources)

 Reduce costs (cheap labor, low taxes, tariffs, etc.)

 Improve operations

 Understand markets (Opportunities, Product Life cycle)

 Improve products (Innovation and collaboration)

 Attract and retain global talent

“Be careful of Cultural Challenges”


8 Organizational Strategy
Annual Annual
Objectives Objectives
Annual
Objectives Annual
Objectives
Strategy

Vision Mission

Future-state Present-state/
Purpose of
existence
9 Organizational Strategy
Decisions by the business as a whole in terms of the industry
sectors in which it wishes to compete.
Intensive
Strategy

Integration
Product Development, Market Development, Market Penetration

Horizontal, Vertical: Backward, Forward


Diversification Related, Unrelated

Divestiture, Retrenchment, Liquidation

Defensive
10 Developing Operational Strategies
Vision
 Vision : What organization want to be.
 Mission : The reason for existence for an Mission

organization Goals

 Goals : Provide detail and Organizational Strategies


scope of mission
Functional Goals

 The Strategy tells the Finance Marketing Operations

organization how to get Strategies Strategies Strategies

there
Tactics Tactics Tactics
 Operational
Strategies are the strategy Operating
procedures
Operating
procedures
Operating
procedures

of functions to attain the


corporate strategy.
Mission and Vision statement of world’s
top 5 companies
•Apple Inc.: "To bring the best user experience to Apple Inc.: "To create the best products on earth, and
customers through innovative hardware, software, and to leave the world better than we found it.“
services.“
•Microsoft Corporation: "To help people and
•Microsoft Corporation: "To empower every person businesses throughout the world realize their full
and every organization on the planet to achieve more." potential."

•Saudi Aramco: "To provide reliable energy and drive •Saudi Aramco: "To be the world's preeminent
sustainable global growth." integrated energy and chemicals company, operating
in a safe, sustainable, and reliable manner."
•Alphabet Inc. (Google): "To organize the world's
information and make it universally accessible and •Alphabet Inc. (Google): "To provide access to the
useful." world’s information in one click."

•Amazon.com, Inc.: "To be Earth's most customer- •Amazon.com, Inc.: ""To be the Earth's safest, most
centric company, where customers can find and customer-centric company.”
discover anything they might want to buy online."
12 Corporate and Operations process of identifying
groups of customers to
address their needs

are the critical operational


dimensions a process or
supply chain must possess to
Strategies

satisfy customers
Three strategic approaches to
competitive advantage
(1) Differentiation
(Better or at least
different)
(2) Cost leadership
(Cheaper and more
cost competitive)
(3) Response rate
(Quicker and more
responsive) .
15 Corporate & Operations Strategies
16
Corporate & Operations
Strategies
Strategic Planning, Core Competencies,
and Outsourcing
 Core Competencies: What Organizations do as well as or better than their competitors.
For Apple, creativity, innovation, and product design is its core competency

 Outsourcing: Transferring a firm’s activities that have traditionally been internal to


external suppliers. For Apple, Manufacturing is outsourced

 The Theory of Comparative Advantage: If an external provider, regardless of its


geographic location, can perform activities more productively than the purchasing firm,
then the external provider should do thework.

 Risks of Outsourcing: Quality vs Cost


18
References
1. Matching Supply with Demand: An Introduction to Operations
Management, 3rd Ed by Gerard Cachon, Christian Terwiesch, McGraw-
Hill Education.
2. Principles of Operations Management: Sustainability and Supply Chain
Management, 12th Ed., by J. Heizer & B. Render.
3. Productivity Improvement in Manufacturing SMEs, Thomos
Munyoi,Boysono Mbonyone, Chorles Mbohwo, CRC Press, 2018.
4. Operations Management, 7th Ed., N. Slack, A.B. Jones, R. Johnston.
5. Cases in Operations Management, S. Chambers, C. Harland, A. Harison,
N. Slack.
6. Methodology for the Analysis and Optimization of Service Productivity
considering qualitative Factors, Fraunhofer, University of Stuttgart.

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