Operations Management Quiz: Process Improvement

Operations Strategy

• Operations excellence and strategic success are different
• Operations strategy is distinct from operations management
• Top-down, outside-in, bottom-up, and inside-out perspectives on operations strategy
• Strategic directions need translation into effective action to be realized
• Operations decisions have a substantial impact on sustainability dimensions
• Operations is the part of an organization that creates and/or delivers its products or services.
• Operations includes internal functions that transform inputs into outputs to satisfy internal or external customers.
• Operational strategies are applicable to internal factors as well as external ones.

Operations Strategy vs. Operations Management

• Differences in timescale (operations management focuses on short-term while operations strategy considers the long term)
• Operations management focuses on micro-level details while operations strategy focuses on a wider macro-level concerning the firm/network
• Operations management's level of aggregation is more detailed (e.g., can we offer tax services to the small business market in Antwerp?), while operations strategy's level of aggregation is broader (e.g., what is the overall business advice capability compared to other capabilities?).

Scope, Level of Aggregation, and Level of Abstraction

• Operations management focuses on the micro level, while operations strategy has a wider scope, considering the macro-level of an organization or network.
• Operations management uses a detailed level of aggregation, while operations strategy uses aggregated resource levels.
• Operations management focuses on concrete issues like improving purchasing procedures, whereas operations strategy is more abstract, such as developing strategic alliances.

Hierarchy of Operations

• Flow between operations level: analyzing at the supply network level
• Flow between processes level: analyzing at the operation level
• Flow between resources level: analyzing at the process analysis level

Service vs Manufacturing Operations Strategy

• Manufacturing strategy involves coordination between key functions.
• Service strategy demands close coordination of key functions
• Intangibility, Heterogeneity, Inseparability, and Perishability are critical characteristics of services which are often difficult to standardize as per manufacturing products examples

Top-Down Perspective on Operations Strategy

• Operations strategy should interpret higher-level strategy (market requirements perspective).
• Reflects decisions of the top organization, sets direction (e.g. corporate, business, and functional strategies)
• Operations strategy should prioritize and reflect market position

Correspondence and Coherence

• Correspondence: vertical alignment between overall business strategy and operations strategy.
• Correspondence reflects the chosen position in the market.
• Coherence: Horizontal alignment across functional strategies, reflecting consistent objectives (e.g, HR strategy and marketing strategy).
• Coherence emphasizes consistency across functions.

Outside-In Perspective on Operations Strategy

• How can operations support the organization's competitive position in the market?
• Understand the market through market segmentation analysis and competitor analysis.
• Translate market requirements into concrete performance objectives for operations.
• Five performance objectives for market positioning: Quality, Speed, Dependability, Flexibility, and Cost

Bottom-up Perspective

• Operations strategy should learn from day-to-day operations experience.
• Knowledge from day-to-day operations can help define strategic direction.
• This approach emphasizes that operations can learn from actual experience.

Inside-Out Perspective

• Operations strategy should build operation's capabilities.
• Resources and processes actively shape and drive the operation's strategy.
• Operations processes and resources are not just passive, but play a crucial role in the operation's strategy
• This approach emphasizes that an operation's existing characteristics are important in defining the possibilities of strategy and what decisions should be made.

Operations Performance Objectives

• Quality (conformance to specifications and customer experience)
• Speed (time taken to complete or deliver)
• Dependability (delivering on time and accurately)
• Flexibility (responding to different demands and changes)
• Cost (financial resources used in production)

Order Winners and Qualifiers

• Order winners: factors that customers primarily consider when choosing a product or service.
• Qualifiers: factors customers expect at a minimum to be considered when deciding for a product or service and is less associated to competitive advantages.

Trade-offs in Operations Strategy

• Trade-offs are unavoidable in operations strategy (e.g., faster speed or higher quality, but both comes at a cost that may involve tradeoffs)

Operational Excellence Perspective

• Focuses on improving operations performance, with trade-offs minimized or eliminated.

Operational/Strategic Monitoring and Control

• Strategic monitoring uses data insights for identifying early changes in strategy implementation.
• Opertaional monitoring evaluates specific operational elements and processes.

Controlling Risk

• Dynamic monitoring: frequent changes, close alignment between market requirements, and capacity.
• Tight alignment: increase misalignment risk, high difficulty changing direction.
• Loose alignment: low risk of deviation, operational agility.
• Pure Speculative Risk: only negative implications.

Supply Chain Dynamics

• Small change in demand causes large fluctuations throughout network.
• "Bullwhip effect": small changes in customer demand cause large, amplified changes in supply chain activities further up the chain.
• Demand forecast updating, batching, price fluctuations, and rationing are often causes of dynamic issues or risks

Capacity Strategy

• Capacity is essential for sustainable operations.
• Decisions on capacity are fundamental in operations strategy.
• Considerations of future demand needs are often key.
• Timing of changes in capacity requires considerable input and considerations.

Supply Strategy

• Must always consider the role of the operation in its supply network.
• Relationships with suppliers are vital to a given operation's competitiveness
• Supply network strategy is crucial for operational competitiveness.
• Value creation is important and is part of the connection of organisations within the supply network.

Supply Network Terminology

• Dyadic: two organizations (e.g., Focal operation/customers).
• Triadic: three organizations (e.g., Focal operation/buyer/supplier/customers).

Process Technology Strategy

• Process technology is the application of science to operations processes.
• Direct technology acts on resources being transformed.
• Indirect technology coordinates and controls direct technologies (e.g., ERP systems).

Product-Process Matrix and Technology

• Shows the relationship between product/service characteristics and process design.
• Products/services differ in their complexity (e.g., high volume vs. high variety).
• Processes differ in responsiveness (e.g. low coupling vs. high coupling).
• Using technology to enhance and meet the market requirements.

Evaluation of Process Technology Strategy

• Feasibility: How difficult is the implementation of the technology?
• Acceptability: Is the technology worthwhile in terms of return and benefits?
• Vulnerability: What are the potential risks of the technology?

Improvement Strategies

• Radical exploration uses significant changes to operation processes and resources.
• Incremental exploitation uses existing resources and processes to adapt to improvement.

Benchmarking

• Learning from other organizations' practices to improve operations performance standards.
• Comparing operations to other organizations in similar industries.
• Part of the method for driving operations improvements across industries and operations.

Operating Strategy Formulation

• Operations strategy formulation is the practice of articulating various operational objectives and decisions.
• Aligning of market requirements and operational capabilities.
• Formulation is also about different ways to align plans and activities.

Operations Strategy Control

• Monitoring and evaluating the implementation of the operation strategy and plans.
• Evaluates performance, and if required; implement corrective measures to ensure that objectives are achieved at the intended level.

Test your knowledge on the principles of operations management, focusing on process improvement and resource efficiency. This quiz addresses key concepts such as stakeholder engagement, technological feasibility, and the economic impacts of development capacity under-resourcing.