Chapter 7 Improvement Strategy

Strategy Operation And Integration

The Sand cone Theory

Techniques such as the importance

performance matrix assume that the
improvement priority given to various aspects
of operations performance is contingent upon
the specific circumstances of an organization's
market position. But some authorities believe
that there is also a generic best sequence in
which operations performance should be
improved.

The Learning/Experience Curve

The learning curve argues that the reduction

in unit labor hours will be proportional to the
cumulative number of units produced, and
that every time the cumulative output
doubles, the hours reduce by a fixed
percentage.

Limits to experience-curve-based
strategies

Attributing specific costs is notoriously

difficult, and overhead costs are often
arbitrarily allocated.
The product or service may be superseded.
Relentless pursuit of cost reduction (to the
detriment of all the other key performance
measures) can lead to operational inflexibility.
The control of cost is not the only way that an
operation can contribute to the competitive
position of the firm.

Process Knowledge
One approach to this has been put forward by Roger
Bohn.9 He described an eight-stage scale ranging
from total ignorance to complete knowledge of
the process
1. Complete ignorance
2. Awareness
3. Measurement
4. Control of the mean
5. Process capability
6. Know how
7. Know why
8. Complete knowledge

The strategic importance of operational

knowledge

Deploying capabilities in the market

Operations capabilities must provide a

contribution to what the organization regards
as being its range of potential market
positions, but how the operation can
contribute to this potential is influenced
strongly by the expectations that the rest of
the organization has for its operations.

The four-stage model

1.
2.
3.
4.

This model developed by Professors Hayes

and Wheelwright of Harvard University with
later contribution from Professor Chase of the
University of Southern California, they
developed what they call the Four Stage
Model, which is ideal evaluating the
effectiveness of the contribution/expectation
cycle.
Stage
Stage
Stage
Stage

One Internal Neutrality

Two External Neutrality
Three Internally Supportive
Four Externally Supportive

Thank You