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Elements of operation strategy

Operations strategy comprises six components :
1. Positioning the production system
A. Product Focused
B. Process Focused
2. Focus of factories and service facilities
3. Product/Service design and development.
4. Technology selection and process development
5. Allocation of resources to strategic alternatives
6. Facility planning.

Description of operation strategy

1. Positioning the production system,- It involves selecting the product design, the
production system and the inventory policy for the finished goods for each product line
A). Product Focused- Generally employed in mass production organizations, where there are
groups of machine, tools and workers arranged according to their respective tasks in order to put
together a product.
B).Process Focused-It is designed to support production departments that perform a single task
like painting or packing. These system are highly flexible and can easily be modified to support
other product design.

2. Focus of factories and service facilities
3. Product/Service design and development.

4. Technology selection and process development,- Thorough analysis and planning of the
production processes and facilities. Every step in the process of production is planned in detail.
The technology to be used in the production process is selected from range of options
5, Allocation of resources to strategic alternatives- Production companies have to
continuously deal with the problem of scarce resources like capital, machine and materials and
so on. As these resource inputs are vital to production activities, their shortages can influence
production performance significantly. Hence the operation manger have to plan the optimal use
of resources, both in terms of minimizing wastage, and in terms of their allocation to the best
strategic use.
6. Facility planning.
The location of the production facilities is one of the key decisions an operation manager has to
make since it is critical to the competitiveness of the organization.
Setting up production facilities with adequate capacity involves massive initial investment.
Strategically right options should be carefully weighted against all available alternatives. These
decisions also influence the future decisions on probable capacity expansions plans.
Operation managers also make decisions, i.e. decision on internal arrangement of workers and
department within the facility

1. General locational factors
2.Specific locational factors
3. Primary factors
4. Secondary factors
a. Proximity to markets:
b. Supply of raw material:

Facility location is the process of determining a geographic site for a firm’s
operations.Managers of both service and manufacturing organizati ons must weigh
many factorswhen assessing the desirability of a particular site, including proximity to
customers andsuppli ers, labour costs, and transportation costs. Location conditions
are complex andeach comprises a different Characteristic of a tangible (i.e. Freight
rates, productioncosts) and non-tangibl e (i .e. reliabil ity, Frequency security,
quality) nature. Locati onconditions are hard to measure. Tangible cost based
factors such as wages and productscosts can be quantified preci sel y i nto what
makes locations better to compare. On theot her hand non- t angi bl e f eat ur es,
whi ch r ef er t o such char act er i st i cs as r el i abi l i t y, avai labi lity and security, can
onl y be measured al ong an ordinal or even nominal scale.Other non-tangibl e
features like the percentage of employees that are unioni zed can bemeasured as
wel l. To sum this up non-tangibl e features are very important for businessl ocat i on
deci si ons. I t i s appr opr i at e t o di vi de t he f act or s, whi ch i nf l uence t he
pl ant location or facility location on the basis of the nature of the organisation as
1. General locational factors
, which include controllable and uncontrollable factors for all type of organisations.
2. Specific locational factors
speci f i cal l y r equi r ed f or manuf act ur i ng and ser vi ce organisations.Location factors
can be further divided into two categories:
Primary factors
are those deri ved from competiti ve prioriti es (cost, quality, time, andflexi bi l ity) and
have a particularl y strong impact on sales or costs.
Secondary factors
also are important, but management may downplay or even ignore some of them if other factors
are more important.
Following are the general factors required for location of plant in case of all typesof
CONTROLLABLE FACTORS1. Proximity to markets:
Ever y company i s expect ed t o ser ve i t s cust omer s by pr ovi di ng goods
andservices at the time needed and at reasonable price organi zations may choose
to locatefacilities close to the market or away from the market depending upon the product.
Whenthe buyers for the product are concentrated, it is advisable to locate the facilities close
tothe market. Locating nearer to the market is preferred if • The products are delicate and
susceptible to spoilage.• After sales services are promptly required very often.• Transportation
cost is high and increase the cost significantly.• Shelf life of the product is low. Nearness to the
market ensures a consistent supply of goods to customers and reduces thecost of
2. Supply of raw material:
It is essential for the organization to get raw material in right qualities and time inorder to
have an uninterrupted producti on. This factor becomes very important if
themat er i al s ar e per i shabl e and cost of t r anspor t at i on i s ver y hi gh.

Total Productive maintenance
Total Productive Maintenance (TPM) is a maintenance program which involves a newly defined
concept for maintaining plants and equipment. The goal of the TPM program is to markedly
increase production while, at the same time, increasing employee morale and job satisfaction.
TPM brings maintenance into focus as a necessary and vitally important part of the business. It is
no longer regarded as a non-profit activity. Down time for maintenance is scheduled as a part of
the manufacturing day and, in some cases, as an integral part of the manufacturing process. The
goal is to hold emergency and unscheduled maintenance to a minimum.

Gantt Chart

A Gantt chart is a visual representation of a project schedule. A type of bar chart, a Gantt charts show the start and finish
dates of the different required elements of a project. Henry Laurence Gantt, an American mechanical engineer, is
recognized for developing the Gantt chart.
Gantt charts are useful in planning how long a project should take and helping to sequence the
events by laying them out in the order in which the tasks need to be completed.

Typically, tasks are shown on the vertical axis, and the project time span is represented on the
horizontal axis. Each task has a corresponding bar that shows the time span required for that task. The
bar can be filled in to show the percentage of the task that has been completed. Gantt charts also
indicate dependencies, those tasks that are dependent upon other tasks. Today there are many
software applications available for creating Gantt charts, as well as functions in popular programs such a
Microsoft Excel.

What is the bullwhip effect
The bullwhip effect can be described as a series of events that leads to supplier demand
variability up the supply chain. Trigger events include the frequency of orders, varying quantities
ordered, or the combination of both events by downstream partners in a supply chain. As the
orders make their way upstream, the perceived demand is amplified and produces what is known
as the bullwhip effect (1).
The bullwhip effect has been perceived as an unavoidable effect of demand variation. Only
recently have companies begun to tackle the ripple associated with variances in demand. The key
to stemming the effect is realizing who is signaling the change in demand. Is it the manufacturer,
distributor, the retailer, or the customer? Knowing where the demand shifts are originating is
vital to attacking this problem.
How to manage it
There are a few methods that can be utilized to minimize the bullwhip effect. These methods are:
1. Portfolio approach
2. Postponement
3. Information sharing between supply chain members

Scheduling is an important tool for manufacturing and engineering, where it can have a major
impact on the productivity of a process. In manufacturing, the purpose of scheduling is to
minimize the production time and costs, by telling a production facility when to make, with
which staff, and on which equipment. Production scheduling aims to maximize the efficiency of
the operation and reduce costs.
Production scheduling tools greatly outperform older manual scheduling methods. These provide
the production scheduler with powerful graphical interfaces which can be used to visually
optimize real-time work loads in various stages of production, and pattern recognition allows the
software to automatically create scheduling opportunities which might not be apparent without
this view into the data. For example, an airline might wish to minimize the number of airport
gates required for its aircraft, in order to reduce costs, and scheduling software can allow the
planners to see how this can be done, by analyzing time tables, aircraft usage, or the flow of
Companies use backward and forward scheduling to allocate plant and machinery resources, plan
human resources, plan production processes and purchase materials.
Forward scheduling is planning the tasks from the date resources become available to determine
the shipping date or the due date.
Backward scheduling is planning the tasks from the due date or required-by date to determine the
start date and/or any changes in capacity required.
The benefits of production scheduling include:
 Process change-over reduction
 Inventory reduction, leveling
 Reduced scheduling effort
 Increased production efficiency
 Labor load leveling
 Accurate delivery date quotes
 Real time information

Steps for Changing Management Services
Step 1: Urgency Creation
Step 2: Build a Team
Step 3: Create a Vision
Step 4: Communication of Vision
Step 5: Removing Obstacles
Step 6: Go for Quick Wins
Step 7: Let the Change Mature
Step 8: Integrate the Change
Eight-Step Change Management Process
Let's go through the steps of Kotter's change management approach.
Step 1: Urgency Creation
A change is only successful if the whole company really wants it. If you are planning to make a
change, then you need to make others want it. You can create urgency around what you want to
change and create hype.
This will make your idea well received when you start your initiative. Use statistics and visual
presentations to convey why the change should take place and how the company and employees
can be at advantage.
Step 2: Build a Team
If your convincing is strong, you will win a lot of people in favour of change. You can now
build a team to carry out the change from the people, who support you. Since changing is your
idea, make sure you lead the team.
Organize your team structure and assign responsibilities to the team members. Make them feel
that they are important within the team.
Step 3: Create a Vision
When a change takes place, having a vision is a must. The vision makes everything clear to
everyone. When you have a clear vision, your team members know why they are working on the
change initiative and rest of the staff know why your team is doing the change.
If you are facing difficulties coming up with a vision, read chapter one (Mission and Values) of
WINNING, by Jack Welch.
Step 4: Communication of Vision
Deriving the vision is not just enough for you to implement the change. You need to
communicate your vision across the company.
This communication should take place frequently and at important forums. Get the influential
people in the company to endorse your effort. Use every chance to communicate your vision;
this could be a board meeting or just talking over the lunch.
Step 5: Removing Obstacles
No change takes place without obstacles. Once you communicate your vision, you will only be
able to get the support of a fraction of the staff. Always, there are people, who resist the change.
Sometimes, there are processes and procedures that resist the change too! Always watchout for
obstacles and remove them as soon as they appear. This will increase the morale of your team as
well the rest of the staff.
Step 6: Go for Quick Wins
Quick wins are the best way to keep the momentum going. By quick wins, your team will have
a great satisfaction and the company will immediately see the advantages of your change
Every now and then, produce a quick win for different stakeholders, who get affected by the
change process. But always remember to keep the eye on the long-term goals as well.
Step 7: Let the Change Mature
Many change initiatives fail due to early declaration of victory. If you haven't implemented the
change 100% by the time you declare the victory, people will be dissatisfied when they see the
Therefore, complete the change process 100% and let it be there for sometime. Let it have its
own time to get integrated to the people's lives and organizational processes before you say it
Step 8: Integrate the Change
Use mechanisms to integrate the change into people's daily life and corporate culture. Have a
continuous monitoring mechanism in place in order to monitor whether every aspect of the
change taking place in the organization. When you see noncompliance, act immediately.
Project Management Tools

Following are some of those tools used by project managers in all domains:
1. Project Plan
2. Milestone Checklist:
3. Gantt Chart:
4. Project Management Softwares
5. Project Reviews
6. Delivery Reviews
7. Score Cards:
Project Plan:
All the projects that should be managed by a project manager should have a project plan. The project
plan details many aspects of the project to be executed.
First of all, it details out the project scope. Then, it describes the approach or strategy used for
addressing the project scope and project objectives.
The strategy is the core of the project plan. The strategy could vary depending on the project purpose
and specific project requirements.
The resource allocation and delivery schedule are other two main components of the project plan.
These detail each activity involved in the project as well as the information such as who executes them
and when.
This is important information for the project manager as well as all the other stakeholders of the
Milestone Checklist:
This is one of the best tools the project manager can use to determine whether he or she is on track in
terms of the project progress.
The project manager does not have to use expensive software to track this. The project manager can
use a simple Excel template to do this job.
The milestone checklist should be a live document that should be updated once or twice a week.
Gantt Chart:
Gantt chart illustrates the project schedule and shows the project manager the interdependencies of
each activity. Gantt charts are universally used for any type of project from construction to software
Although deriving a Gantt chart looks quite easy, it is one of the most complex tasks when the project is
involved in hundreds of activities.
There are many ways you can create a Gantt chart. If the project is small and simple in nature, you can
create your own Gantt chart in Excel or download an Excel template from the Internet.
If the project has a high financial value or high-risk exposure, then the project manager can use
software tools such as MS Project.
Project Management Softwares:
With the introduction of computer technology, there have been a number of software tools specifically
developed for project management purpose. MS Project is one such tool that has won the hearts of
project managers all over the world.
MS Project can be used as a standalone tool for tracking project progress or it can be used for tracking
complex projects distributed in many geographical areas and managed by a number of project
There are many other software packages for project management in addition to MS Project. Most of
these new additions are online portals for project management activities where the project members
have access to project details and progress from anywhere.
Project Reviews:
A comprehensive project review mechanism is a great tool for project management. More
mature companies tend to have more strict and comprehensive project reviews as opposed to
basic ones done by smaller organizations.
In project reviews, the project progress and the adherence to the process standards are mainly
considered. Usually, project reviews are accompanied by project audits by a 3rd party (internal
or external).
The non-compliances and action items are then tracked in order to complete them.
Delivery Reviews:
Delivery reviews make sure that the deliveries made by the project team meet the customer
requirements and adhere to the general guidelines of quality.
Usually, a 3rd party team or supervisors (internal) conduct the delivery review and the main
stakeholders of the project delivery do participate for this event.
The delivery review may decide to reject the delivery due to the quality standards and non-
Score Cards:
When it comes to performance of the project team, a scorecard is the way of tracking it. Every
project manager is responsible of accessing the performance of the team members and reporting
it to the upper management and HR.
This information is then used for promotion purposes as well as human resource development. A
comprehensive score card and performance assessment can place the team member in the correct