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First Individual

Assignment

of

Operation Management

Submitted to Submitted by

Karishma Agrawal Antovna Gyawali

Course Instructor, OM BBA-BI 'B'

7th Sem

Ace Institute of Management

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1. What are the major priorities associated with operation strategy? Why should a

service organization worry about being world class, if it doesnt compete outside its

own national boundary?

An operations strategy for a business is the company's plan for how the business will

operate to achieve a set of goals. Operations strategy is the total pattern of decisions

which shape the long-term capabilities of any type of operations and their contribution to

the overall strategy, through the reconciliation of market requirements with operations

resources. There are various priorities associated with operation strategy which are listed

as:

1. Product and service design

2.Cost

3.Location

4.Quality

5.Quick response

6.Flexibility

7.Inventory management

8.Supply chain management

9.Service

Despite of these many, there are four main priorities associated with operation strategyand they are:

CostAny company should focus on producing and distributing of a product or service with aminimum of expenses or wasted resources. this will result in low price of product orservices. the large segment of customers rely on low cost. As a result, customers use costas the primary determinant for making a purchase. . To successfully compete in thisniche, a firm must be the low-cost producer.

eg: Lincoln Electric-reduced costs by $10 million a year for 10 years

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QualityQuality is often subjective. Quality is defined differently depending on who is defining it.

However, two major quality dimensions include{

i. High performance design:

-Superior features, high durability, & excellent customer service

ii. Product & service consistency:

-Meets design specifications

-Close tolerances

-Error free delivery

Quality can be divided into two categories: product quality and process quality. Thus, thegoal of process quality is to produce error free products through total quality

management (TQM).

eg: Ritz-Carlton - one customer at a time

Speed of Delivery/ dependabilityTime/speed one of most important competition priorities. First that can deliver often wins

the race. Time related issues involve

i. Rapid delivery:

Focused on shorter time between order placement and delivery

ii. On-time delivery:

Deliver product exactly when needed every timeSimilarly, Dependability means being on time. dependability is generally regarded by

customers as a good thing. Certainly being late with delivery of goods and services can

be a considerable irritation to customers.

eg: Dell-ships custom-built computers in two days

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FlexibilityFlexibility always means being able to change the operation in some way. Companyenvironment changes rapidly. Company must accommodate change by being flexible.There are two sectors where company should be flexible.

i. Product flexibility:

- Easily switch production from one item to another

- Easily customize product/service to meet specific requirements of acustomer

ii. Volume flexibility:

- Ability to ramp production up and down to match market demands tosum up, flexibility is the ability to respond to rapid changes in customerdemand and requirements for existing.

eg:Custom Foot Shoe Store:

-customers feet are scanned electronically to capture measurements

-custom shoes are mailed to the customers home in weeks

-prices are comparable to off-the-shelf shoes