Introduction to Operations strategy

Question 1

What are the three main areas of decision-making in operations strategy, and how do they differ?

Answer 1

• Strategic Decisions – Long-term and broad; define the firm’s direction (e.g., facility location, technology selection).
• Tactical Decisions – Medium-term; translate strategic goals into actionable plans (e.g., workforce size, inventory levels).
• Operational Decisions – Short-term; involve day-to-day activities (e.g., job assignments, scheduling).

Question 2

Why do companies globalize their operations? Name at least 4 reasons.

Answer 2

• Improve the supply chain
• Reduce costs
• Improve operations
• Understand markets
• Improve products
• Attract and retain global talent

Question 3

How can globalization improve a company’s supply chain?

Answer 3

By locating facilities closer to raw materials, suppliers, or customers, reducing lead time and transportation costs.

Question 4

What is the difference between a company’s mission and its strategy?

Answer 4

• Mission: Broad purpose or reason for existence.
• Strategy: A plan to achieve the mission, including competitive priorities and resource allocation.

Question 5

What are the three main ways companies can achieve competitive advantage?

Answer 5

• Differentiation – Unique products/services
• Cost Leadership – Lowest cost of operations
• Response – Flexibility and speed

Question 6

What are the components of the ‘Response’ strategy in competitive advantage?

Answer 6

• Flexibility: Ability to produce a wide variety of products
• Reliability: On-time delivery
• Quickness: Speed of production or delivery

Question 7

List and briefly explain the four competitive priorities in operations strategy.

Answer 7

• Cost – Efficient operations to keep prices low.
• Quality – Consistency and excellence in product performance.
• Delivery – Fast and on-time product/service delivery.
• Flexibility – Ability to adapt to changing demand or custom orders.

Question 8

Why is it difficult for a company to excel in all competitive priorities at once?

Answer 8

Because each priority typically involves trade-offs; e.g., increasing flexibility or quality may raise costs or lengthen delivery time.