Lecture Notes: Operation Strategy in a Global Environment

Introduction

• Focus on operation strategy in a global context.
• Importance of taking breaks and making personal notes while reviewing the lecture.

Reasons for Globalization

• Cost Reduction: Lower labor costs, taxes, tariffs.
• Supply Chain Improvement: Better management of overseas materials/components.
• Enhancing Goods/Services: Quality control through closer involvement.
• Market Understanding: Gain insights and opportunities in foreign markets.
• Technological and Operational Learning: Collaborating internationally to improve processes.
• Talent Attraction and Retention: Establishing overseas operations to retain skilled workers.

Developing Missions and Strategies

• Mission Statement: Brief overview of the organization's purpose and direction.
  • Answers the "what," "why," and "where" of a company.
  • Provides boundaries and focus.
• Strategy: Action plan describing how to achieve the mission.
  • Includes strategic and operational planning.

Factors Affecting Mission

• Customers: Central to mission formulation.
• Philosophy and Values: Ethical production, community involvement, and environmental impact.
• Profitability and Growth: Ambitions and expansion plans.
• Public Image: Reputation as a responsible entity.

Sample Mission Statements

• Company Mission: General statement about goals and expectations.
• Operational Management Mission: Specific departmental goals aligned with overall mission.
  • Examples: Product design, quality management, process design, location and layout design.

Strategic Processes

• Organizational Mission: Guides functional area missions.
• Functional Area Missions: Operations, HR, marketing, etc.
• Feedback Loop: Influences organization’s mission and strategies.

Strategy and Competitive Advantage

• Differentiation: Unique product features.
• Cost Leadership: Efficiency and low production costs.
• Response Strategy: Quick adaptation to market changes.

Operations Management's Contribution to Strategy

• Key Decisions: Product, process, location, layout, human resources, supply chain, inventory, scheduling, maintenance.

SWOT Analysis

• Applied to various business levels to identify strengths, weaknesses, opportunities, and threats.
• Used for strategic alignment.

Strategy Development Process

• Analyze Environment: Understand market and competition.
• Determine Corporate Mission: Define existence and value creation.
• Form Strategy: Competitive advantages like low price, quick delivery.

Strategy Implementation

• Identify Key Success Factors: Recognize core competencies.
• Build Organization: Logical structure and staff allocation.
• Integrate Operations Management: Ensure communication between departments.

Key Success Factors in Operations

• Product: Customization vs. standardization.
• Quality, Process, Location, Layout, HR, Supply Chain, Inventory, Scheduling, Maintenance: Important considerations.

International Operations Strategies

• Global Strategy: Standardized product across borders.
• International Strategy: Import/export focus.
• Multi-Domestic Strategy: Use domestic model globally.
• Transnational Strategy: Movement of materials and ideas.

Conclusion

• Recap of mission and strategy discussions.
• Importance of reviewing and reinforcing understanding.