332 operations management decisions 1 strategic long

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strategy. 3.3.2 OPERATIONS MANAGEMENT DECISIONS 1. Strategic (long-term) decisions The relevant points over here are- How will we make the product? Where do we locate the facility or facilities? How much capacity do we need? When should we add more capacity? 2. Tactical (intermediate-term) decisions The relevant points over here are- How many workers do we need? When do we need them? Should we work overtime or put on a second shift? When should we have material delivered? Should we have material delivered? Should we have a finished goods inventory? 3. Operational Planning & Control (short-term) decisions The relevant points over here are - What jobs do we work on today or this week? Who do we assign to what tasks? What jobs have priority? An operations strategy can be viewed as part of a planning process that coordinates operational goals with those of the larger organization. Since the goals of the larger organization
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32 change over time, the operations strategy must be designed to anticipate future needs. An operations strategy involves decisions that relate to: a) Process design includes 1) the selection of appropriate technology; 2) sizing the process over time; 3) the role of inventory in the process; and, 4) locating the process. b) Infrastructure decisions involve 1) the logic associated with the planning and control systems; 2) quality assurance and control approaches; 3) work payment structures; and, 4) the organization of the operations function. Strategy is a common vision that unites an organization, provides consistency in decisions, and keeps the organization moving in the right direction. Strategy formulation consists of four basic steps: Defining a primary task: The primary task is usually expressed in a firm‘s mission statement. The mission may be accompanied by a vision statement that describes what the organization sees itself becoming. Assessing core competencies: Core competency is what a firm does better than anyone else, its distinctive competence. Based on experience, knowledge, and know-how, core competencies represent sustainable competitive advantages. For this reason, products and technologies are seldom core competencies. The advantage they provide is short-lived, and other companies can readily purchase, emulate or improve on them. Core competencies are more likely to be processes, a company‘s ability to do certain things better than a competitor. Thus, while a particular product is not a core competence, the process of developing new products is. Core competencies are not static. They should be nurtured, enhanced, and developed over time. Close contact with the customer is essential to ensuring that a competence does not become obsolete. Determining order winners and order qualifiers: A firm is in trouble if the things it does best are not important to the customer. That‘s why it‘s essential to look toward customers to determine what influences their purchase decision. Order qualifiers are the characteristics of a product or service that qualify it to be considered for purchase by a customer. An order winner is the characteristic of a
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