Introduction: VCAP Framework of Operations Strategy

Question 1

Operations Management

Answer 1

Managing the process of matching supply with demand in real-time (distinction with economics).

Goal: Link the firm’s business strategy with its operating strategy.

Question 2

VCAP Framework of Operations Strategy

Answer 2

Value, Competencies, Assets, & Processes

Question 3

Value Proposition (Customer-Facing Side of Business)

Answer 3

Firms Prioritize Different Dimensions:

1. Price
2. Variety
3. Timeliness
4. Quality

Question 4

Competencies (Supply Side of Business)

Answer 4

Value Proposition informs the firm’s competencies.

Cost (of operating) -> Price

Flexibility (to change inputs, activities, volumes or outputs)
-> Variety

Responsiveness -> Timeliness (total lead time)

Process Quality (ability to deliver desired quality outputs) -> Quality

Question 5

Resource View: Assets

Answer 5

Shape & sustain the firm’s competencies.

1. Sizing: How much capacity?
2. Timing: When to expand or contract, build capacity?
3. Type: What kinds of resources?
4. Location: Where to position resources?

Question 6

Process View: Processes

Answer 6

Converts inputs to outputs.

Reflect firm’s competencies:
1. Supply (tech): When to outsource & how to manage suppliers? Who to source from?
2. Technology: Coordination, product, process transportation. 3. Demand: How to match demand with available supply?

Question 7

Efficiency Frontier

Answer 7

A function that indicates the maximum level of attainable performance result by a given set of inputs.

Note: Any firm within any Industry can be mapped.

Question 8

Tools to Tailor Operations under the VCAP Framework

Answer 8

1. Product-Process Matrix
2. Strategic Operational Audit
3. Balaned Scorecard

Question 9

Product-Process Matrix

Answer 9

1. Job Shop: Focus on day-to-day issues. Low-volume, one-of-a-kind products are the hallmark.
2. Batch: Focus on productivity enhancement and economies of scale to meet standard practice. Competitive differentiation plays a central role. Organizations likely produce multiple products with a low volume.
3. Assembly Line: There are fewer major products but a higher volume. An assembly line process consists of highly similar goods produced repetitively.
4. Continuous Flow: Process and product improvements advance past industry standards and result in a sustainable competitive advantage. High product volume along with high standardization.

Question 10

Strategic Operational Audit

Answer 10

1. Audit the Value Proposition, Current Competencies and Resources & Processes.
2. Characterization:
   a. Identify from Top-Down Needed Competencies and Needed Resources & Processes.
   b. Identify from Bottom-Up deliverable Value Proposition.
3. Identify Gaps between each level:
   a. Value Proposition and what is deliverable.
   b. Needed and possible capabilities.
   c. Available and need resources and processes.
   d. Gaps occur at the high level are then broken down by what happens at the lower levels.

Question 11

Balanced Scorecard

Answer 11

Market view: the value proposition or the business strategy

Operations view: competencies, resources and process views.

Learning & Growth view: breaking out of the process view, the Innovation portion.

Financial view: the financial growth strategy as defined by revenue growth or cost reduction.

Question 12

VCAP Framework Summary

Answer 12