Operations Strategy Assessment
Students should be able to:
1. Describe the steps in an operations strategy
assessment.
2. Explain linkages between major operations
decisions and strategy.
3. Determine whether gaps exist between
competitive priorities and capabilities.
Corporate Strategy
Market Analysis
Connection
Between
Corporate
Strategy and
Key
Operations
Management
Decisions
Competitive Priorities
New Service/
Product Development
No
Yes
Operations Strategy
Decisions
Designing and Improving Processes
Designing Value Chains
Operating Value Chains
Performance
Gap?
Capabilities
Operations Strategy Assessment
1. What are the major opportunities and threats?
2. Which processes are involved?
3. Which competitive priorities must the processes
achieve?
4. How have the major decisions affecting the
processes aligned with the competitive priorities?
5. What are the gaps in the competitive capabilities of
the processes?
6. How should the gaps be closed?
McDonald’s Operations
Strategy Assessment
1.
Identify Opportunities and Threats
2.
Identify Desired Competitive Priorities
• Store-to-customer process
• Suppliers-to-store process
3.
Major Decision Alignment
4.
Identify Competitive Capability Gaps
5.
Close the Gaps
Competitive Priorities
Cost
1. Low-cost operations
Quality
2. Top quality
3. Consistent quality
Time
4. Delivery speed
5. On-time delivery
6. Development speed
Flexibility
7. Customization
8. Variety
9. Volume flexibility
McDonald’s Operations
Decision Alignment
Major Decisions
• Facilities Design
• Sourcing
• Workforce
• Quality
• Capacity
Examples
Competitive
Priorities Supported
Key Reasons for McDonald’s Success
• Consistency
• Limited product range
• Minimization of variation
• Formalization of procedures
Is it a good idea to collaborate with the EDF?
How to Assess Performance Gaps
1. Identify Competitive Priorities and Capability Measures
• Justify competitive priorities
• Select several measures for each competitive priority
• Establish benchmarks for each measure
2. Gather Operating data for each Measure
•
•
•
•
You are measuring “capability”
Objective data nice, but may be limited
Subjective data – ordinal scale
Observer calibration is essential
3. Analyze Gaps
• Gaps are the difference between established benchmarks
and observed capability
• Significant gaps need to be closed