Operations: the processes by which companies manufacture and distribute products and / or services to their customers.
Operations management: dealing with such processes can be configured properly in order to successfully meet the requirements and needs of the market. Any decision taken in this area is extremely important and impactful for the enterprise (strategic framework) as the operations represent the "core" of any organization.
Given the importance coated from operations and that can be achieved the desired goals is essential to have a strategic approach to well-defined, delineated and characterized by consistency between the objectives set at "high" level and execution logic of the activity.
1.2 Strategic thinking
- create and maintain a competitive advantage. All businesses, to survive over time, - success is the result of many continuative good decisions.
-strategic decision needs lot of resources, developed for long term change and to create sustainable advantage. It is what to do (direction) and how to do it (implementation).
Levels of strategy:
-Corporate level: direction of total business and allocate resources accordingly in a timely manner.
-Business unit level: direction of business unit and the markets in which the company has decided to enter (strategic positioning and value proposition).
-Functional level: direction of function and organize properly each business area in order to support the achievement of the objectives and meeting the needs of the market
The traditional approach of defining the strategy
-Corporate level: Defined macro-objectives (market share, profitability, ...)
-The business unit level: The macro-objectives are translated into specific objectives for each divisional area
-Functional level: Through the budgeting process are assigned targets (cost reduction, sales, share, etc..)
Today, the traditional approach do not work properly due to external and internal forces for change acting on the resources of the company:
- Offer> Application -> Increased competition
- Customisation -> it is necessary to adapt to specific customer requirements
- Globalization -> new risks and opportunities
- Speed of technological development, the rapid diffusion of knowledge
- technological skills -> dynamic environment and> need to innovate and improve
- Economic: the welfare of the population that makes it less prone to change, more difficult for businesses to find new staff;
- Cultural evolution of the level of education and personal culture.
- Social: Technological innovation (ICT) has radically changed the way we run the processes within the company
1.3 Operations and competitive advantage : the dimensions of performance
Let us now concentrate on operations . Creating competitive advantage through operations means defining the strategic positioning of the company from the point of view of the performance of time ( punctuality and speed ) , cost, quality ( design and compliance) , flexibility ( product customization , gamma , plan ) and service.
In setting the strategic objectives of the operations necessary to: • align operations with configuration of the characteristics of the market
• Define the desired performance, the current configuration of the operations ( plant - technological aspect , organizational , managerial ) . In this way identify the performance obtainable with the current configuration.
If there is a mismatch between market and operations, there are two possible solutions:
1. Changing some of the variables / internal levers
2. Whenever the internal change turns out to be too expensive, reorient their target market heading towards a position more in line with the current system of operations.
1.4. The strategic levers of operations strategic tools to align operations to the market:
Production capacity to