NATIONAL COLLEGE OF BUSINESS AND ARTS

Center for Graduate Studies

Master in Business Administration
Fairview, Quezon City

GROUP 1
Session 1,2,3

In partial fulfillment of the

Requirements for the subject

PRODUCTION/ OPERATIONS MANAGEMENT

Submitted to
Dr. Maximo Artieda

Submitted by
Romalyn Purificacion
Creiven Gimpaya
Julius Urbino
Jamie Omugtong

March 10, 2018

Session 1

Production Management
Production management is the process of effectively planning and regulating the operations of
that part of an enterprise which is responsible for actual transformation of materials into finished
product.
It is defined as planning, implementation and control of industrial production process to ensure
smooth and efficient operation. Production management techniques are used in both
manufacturing and service industries.
Simply, production management is a process of planning, organizing, directing and controlling
the activities of the production function.
Production Management

 It’s concerned with manufacturing

 Output is tangible
 Job use less labor and more equipment
 There is no customer participation
5 P’s of Production Management

 Product
 Plant
 Programme
 Process
 People
The Product:
Product is the link between production and marketing. It is not enough that a customer requires
product but the organization must be capable of producing the product.
As per the product policy of the organization an agreement is needed between the various
function on the following aspects of the product.
1. Performance
2. Quality and reliability
3. Aesthetics and ergonomics
4. Quantity and selling price
5. Delivery schedule
To arrive at the above, the external and the internal factors with affect the various aspects such
as market needs, existing culture and legal constraints and the environmental demands should
be given due consideration. Thus, the major policy decision regarding variety of product mix is
going to affect the production system.
The Plant:
The plant accounts for major investment (fixed Assets).
The plant should match the needs of the product; market, the worker and the organization.
The plant is concerned with:
1. Design and layout of the building and offices
2. Reliability, perfect maintenance of equipment
3. Safety of operation
4. The financial constraint
The Process:
There are always number of alternative methods of creating a product. But it is required to
select the one method, which attains the objectives.
In deciding about the process it is necessary to examine the following factors:
1. Available capacity
2. Manpower skills available
3. Type of production
4. Layout of plant
5. Safety
6. Maintenance required
7. Manufacturing cost
The Programme:
The programme here refers to the time table of production.
Thus, the programme prepares schedules for:
1. Purchasing
2. Transforming
3. Maintenance
4. Cash
5. Storage and transport
The People:
Production depends upon people. The people vary in their attitude, skill and expectations from
the work. Thus, to make best use of available human resource, it is required to have a good
match between people and jobs which may lead to job satisfaction.
The production manager should be involved in issues like:
1. Wages/salary administration
2. Condition of work/ safety
3. Motivation
4. Training of employees
Classification of Production
Job Shop Production:
Job shop production are characterized by manufacturing of one or few quantity of products
designed and produced as per the specification of customers within prefixed time and cost.
The distinguishing feature of this is low volume and high variety.
A job shop comprises of general purpose machines arranged into different departments
Each job demands unique technological requirements, demands, processing on machines in a
certain sequence.
Characteristics:

 High variety of products and low volume

 Use of general purpose machine and facilities
 High skilled operators who can take up each job as a challenge because of uniqueness
 Large inventory of materials, tools, parts
 Detailed planning is essential for sequencing the requirements of each product,
capacities for each work centre and order priorities
Advantages:

 Because of general purpose machines and facilities variety of product can be produce
 Operators will become more skilled and competent, as each job gives them learning
opportunities
 Full potential of operators can be utilized
 Opportunity exist for creative methods and innovative ideas
Limitations:

 Higher cost due to frequent set up changes

 Higher level of inventory at all levels
 Production planning is complicated
 Larger space requirements
Batch Production:
It is characterized by the manufacture of limited number of products produced at regular
intervals and stocked awaiting sales.
Characteristics:

 There is shorter production runs

 Plant and machinery are flexible
 Manufacturing lead time and cost are lower as compared to job shop production
Advantages:

 Better utilization of plant and machinery

 Promotes functional specialization
  Cost per unit is lower as compared to job shop production
 Lower investment in plant and machinery
 Flexibility to accommodate and process number of products
 Job satisfaction exist for operators
Limitations:

 Material handling is complex because of irregular and, longer flows

 Production planning and control is complex
 Work in process inventory is higher compared to continuous production
 Higher set up costs due to frequent changes in set up
Mass Production:
This production system is justified by very large volume of production.
The machines are arranged in a line or product layout. Production and process standardization
exists and all outputs follow the same path.
Characteristics:

 Standardization of product and process sequence

 Large volume of products
 Shorter cycle time of production
 Lower in process inventory
 Perfectly balance production lines
 Production planning and control is easy
 Material handling can be completely automatic
Advantages:

 Higher rate of production with reduced cycle time

 Higher capacity utilization due to line balancing
 Less skilled operators are required
 Low process inventory
 Manufacturing cost per unit is low
Limitations:

 Breakdown of one machine will stop on entire production line

 Line layout needs major change with the changes in the production design
 High investment in production facilities
Continuous Production:
Production facilities are arranged as per the sequence of production operation from the first
operations to the finished product.
The items are made to flow through the sequence of operation through material handling
devices such as conveyors, transfer device, etc.
Characteristics:

 Dedicated plant and equipment with zero flexibility

 Material handling is fully automated
 Process follows a predetermined sequence of operations
 Component materials can’t be readily identified with final product
 Planning and scheduling is a routine action
Advantages:

 Standardization of product and process sequence

 Higher rate of production with reduce cycle time
 Higher capacity utilization due to line balancing
 Man power is not required for material handling as it is completely automatic
 Person with limited skills can be used on the production line
 Unit cost is lower due to high volume of production
Limitations:

 Process number of products doesn’t exist

 Very high investment for setting flow lines
 Product differentiation is limited
Objectives of Production Management
“To produce goods services of right quality and quantity at the right time and right manufacturing
cost”
Right Quality
The quality of product is established based upon the customers need. The right quality is not the
necessarily best quality. It is determined by the cost of the product and the technical
characteristics as suited to the specific requirements.
Right Quantity
The manufacturing organization should produce the products in right number. If they are
produced in excess of demand the capital will block up in the form of inventory and if the
quantity is produced in short of demand leads to shortages of product.
Right Time
Timeless of delivery is one of the important parameter to judge the effectiveness of production
department. So, the production department has to make the optimal utilization of input
resources to achieve its objective.
Right Manufacturing Cost
Manufacturing costs are established before the product is actually manufactured.
All attempts should be made to produce the products at pre-established cost, so as to reduce
the variation between actual and the standard (pre-established) cost.
Productivity
Productivity is the output of any production process, per unit of input. To increase productivity
means to produce more with less.
Productivity is refers to the efficiency of the production system.
Productivity = Efficiency = Output/Input
Productivity is the quantitative relation between what we use as a source of produce them.
Types of Productivity
Partial Productivity
The resources of productivity when measured separately are called as Partial productivity.
A measure of partial productivity plays a very important role in improving the productivity.
Labor Productivity = Output / Labor Productivity
Capital Productivity = Output / Capital Productivity
Material Productivity = Output / Material Productivity
Total Factor Productivity
In any production process, many of the resources inputs are available within the organization,
while a few others are purchased from outside.
Total Factor Productivity = Net Output / (Labor + Capital Productivity)
Total Productivity
The method of calculating Productivity considering all the resources is called Total Productivity.
It is systematic and qualitative to approach to complete the products considering the quality,
price and time.
Total Productivity provides a systematic framework and structure to organization and increase
profitability.
Total Productivity = Total Tangible Output / Total Tangible Input.
Factors Effecting Productivity

 Product
 Plant and Equipment
 Technology
 Material and energy
 Human Factor
 Work method
 Management Style
Ways to Improve Productivity

 Product Development
 Specialization and Standardization
 Market, Consumer and Product research
 Value analysis
 Process Planning and research
 Method Study
 Safety
 Operator Training
 Production Planning and Control
 Material Control
References:
https://www.slideshare.net/shreyasmetri/productivity-and-operation-management
https://www.slideshare.net/patel9078/productio-new-management
http://www.yourarticlelibrary.com/production-management/5-ps-of-production-management-
explained/57397
Session 2

Operation Management
Introduction
Production/operations management is the process, which combines and transforms various
resources used in the production/operations subsystem of the organization into value added
product/services in a controlled manner as per the policies of the organization. Therefore, it is
that part of an organization, which is concerned with the transformation of a range of inputs into
the required (products/services) having the requisite quality level.
The set of interrelated management activities, which are involved in manufacturing certain
products, is called as production management. If the same concept is extended to services
management, then the corresponding set of management activities is called as operations
management.
A Framework for Managing Operations
Managing operations can be enclosed in a frame of general management function as shown in
Fig. 1.3. Operation managers are concerned with planning, organizing, and controlling the
activities which affect human behavior through models.
Planning
Activities that establishes a course of action and guide future decision-making is planning. The
operations manager defines the objectives for the operations subsystem of the organization,
and the policies, and procedures for achieving the objectives. This stage includes clarifying the
role and focus of operations in the organization’s overall strategy. It also involves product
planning, facility designing and using the conversion process.
Organizing
Activities that establishes a structure of tasks and authority. Operation managers establish a
structure of roles and the flow of information within the operations subsystem. They determine
the activities required to achieve the goals and assign authority and responsibility for carrying
them out.
Controlling
Activities that assure the actual performance in accordance with planned performance. To
ensure that the plans for the operations subsystems are accomplished, the operations manager
must exercise control by measuring actual outputs and comparing them to planned operations
management. Controlling costs, quality, and schedules are the important functions here.
Behaviour
Operation managers are concerned with how their efforts to plan, organize, and control affect
human behavior. They also want to know how the behavior of subordinates can affect
management’s planning, organizing, and controlling actions. Their interest lies in decision-
making behavior.
Models
As operation managers plan, organize, and control the conversion process, they encounter
many problems and must make many decisions. They can simplify their difficulties using models
like aggregate planning models for examining how best to use existing capacity in short-term,
break even analysis to identify break even volumes, linear programming and computer
simulation for capacity utilization, decision tree analysis for long-term capacity problem of facility
expansion, simple median model for determining best locations of facilities etc.
Operations Management and Strategy
What is Operation

- Everything that happens within a company to keep it running and earning money is
referred to collectively as business operations.
What is Management

- The activities associated with running a company, such as controlling, leading,

monitoring, organizing, and planning.
What is Operation Management?

- is defined as the design, operation, and improvement of systems that create and deliver
the firm’s primary products and services.
- is the key to achieving competitive advantage for organizations, whether they are in
manufacturing industry or the service industry.
B. Mahadevan discuss that OM is a systematic approach to addressing issues in the
transformation process that converts inputs into useful, revenue generating outputs.
 Operation management is a systematic approach. It involves understanding the
nature of issues and problems to be studied; establishing measures of
performance; collecting relevant data; using scientific tools, techniques, and
solution methodology for analysis; and developing effective as well as efficient
solutions to the problem at hand. Therefore, for successful operations
management, the focus should be on developing a set of tools and techniques to
analyze the problems faced within an operations system.
 Operation management involves addressing various issues that an organization
faces. These issues vary markedly in terms of the time frame, the nature of the
problem, and the commitment of the required resources. Operations
management provides alternative methodologies to address such wide-ranging
issues in an organization.
 Transformation process are central to operations systems. The transformation
process ensures that inputs are converted into useful outputs. Therefore, the
focus of operations management is to address the design, planning, and
operational control of the transformation process.
 The goal of the operations management is to ensure that the organization is able
to keep costs to a minimum and obtain revenue in excess of costs through
careful planning and control of operations. Therefore, operations management
also involves the development of performance evaluation systems and methods
through which the operating system can make improvements to meet targeted
performance measures.
Objective of Operating Management

- Customer Service
- Resource Utilisation

Customer Service
The first objective of operating systems is the customer service to the satisfaction of customer
wants. Therefore, customer service is a key objective of operations management. The operating
system must provide something to a specification which can satisfy the customer in terms of
cost
and timing. Thus, primary objective can be satisfied by providing the ‘right thing at a right price
at the right time’.
These aspects of customer service—specification, cost and timing—are described for four
functions in Table 1.2. They are the principal sources of customer satisfaction and must,
therefore,
be the principal dimension of the customer service objective for operations managers.
Resource Utilisation

Another major objective of operating systems is to utilise resources for the satisfaction of
customer wants effectively, i.e., customer service must be provided with the achievement of
effective operations through efficient use of resources. Inefficient use of resources or
inadequate
customer service leads to commercial failure of an operating system.
Operation Strategy
A plan specifying how an organization will allocate resources to support infrastructure and
production. An operations strategy is typically driven by the overall business strategy of the
organization, and is designed to maximize the effectiveness of production and support elements
while minimizing costs.
What is Strategy

- The direction and scope of an organization over the long-term, which achieves
advantage in a changing environment through its configuration of resources with the aim
of fulfilling stakeholder expectations’.
Strategy can be considered to exist at three levels in an organization:

- Corporate level
 is the highest level of strategy. It sets the long-term direction and scope for the
whole organization. If the organization comprises more than one business unit,
corporate level strategy will be concerned with what those businesses should be,
how resources (e.g. cash) will be allocated between them, and how relationships
between the various business units and between the corporate centre and the
business units should be managed. Organizations often express their strategy in
the form of a corporate mission or vision statement.
- Business Level
 is primarily concerned with how a particular business unit should compete within
its industry, and what its strategic aims and objectives should be. Depending
upon the organization’s corporate strategy and the relationship between the
corporate centre and its business units, a business unit’s strategy may be
constrained by a lack of resources or strategic limitations placed upon it by the
centre. In single business organizations, business level strategy is synonymous
with corporate level strategy.
- Functional Level
 The bottom level of strategy is that of the individual function (operations,
marketing, finance, etc.) These strategies are concerned with how each function
contributes to the business strategy, what their strategic objectives should be and
how they should manage their resources in pursuit of those objectives.
Tools for Implementation of Operations

- Process flow diagram:

 This diagram is at the heart of continuous improvement. It represents everything
that happens in a process, and you must complete it before embarking on
process improvement. The initial process flow diagram is necessary to
understand what’s actually being done and provides a document that you can
use to communicate process changes.
- Histogram:
 You may remember the histogram from school because it’s a basic method to
display data. The histogram simply displays the frequency of different
measurements and shows their distribution.
- Pareto chart:
 Another common bar chart is the Pareto chart. In this chart, the events are
displayed on the x-axis, and the number of occurrences is displayed on the y-
axis. The Pareto chart allows you to instantly identify the vital few events that are
causing most of your problems.
- Ishikawa diagram:
 The Ishikawa diagram (often called a fishbone diagram because of its
resemblance to a fish skeleton) is one of many cause-and-effect tools. The
diagram starts at the head with a problem statement. Running along the spine
are possible causes for the problem.
- Failure mode and effects analysis (FMEA):
 You can use this tool to identify the root cause of a problem. It’s a very structured
approach that begins by identifying all possible things that can go wrong, or the
failure modes of your process or product.
 - Run chart:
 This chart is a simple but powerful tool used to monitor a process over time. You
can use it to identify changes in mean measurement and trends that may occur.
Unlike the control chart discussed next, the run chart doesn’t require any
statistical analysis.
- Control chart:
 Statistical process control (SPC) is a statistical technique used to monitor and
control processes. The most common SPC tool is the control chart, which is
usually a line graph showing a particular measurement taken over time.
Industry Best Practice
Best practices are a set of guidelines, ethics or ideas that represent the most efficient or prudent
course of action. Best practices are often set forth by an authority, such as a governing body or
management, depending on the circumstances. While best practices generally dictate the
recommended course of action, some situations require that industry best practices be followed.
Example of Best Practices
TIS Majorana School of Brindisi, Europe

- Teaching and Learning Collaboratively: The Flipped Classroom Approach

 ITIS Majorana School’s classroom model is based on collaborative teaching and
learning. The school actively seeks to enhance interaction and collaboration
using ICT (Information and Communication Technology).
Best Practices for Increasing Productivity

- Operations Managers are responsible for, and work in conjunction with, many aspects of
the company; their skill-set must reflect both a breadth and depth of knowledge from a
myriad of areas. Root highlights several best practices used by operational managers to
increase productivity, decrease waste, and generate profit.
 Equipment Upgrades - One of the responsibilities of an operations manager is to
analyze work functions and determine what equipment upgrades would improve
productivity.
 Communication Coordination - Improved communication within an organization
can increase productivity. When information is sent from one department to
another quickly and accurately, it can speed up the pace at which the company
can operate and ensures that all necessary parties get the information they need
to be productive.
 Revenue Collection - The operations manager is in charge of billing and revenue
collection. By analyzing revenue collection procedures, the operations manager
can create ways of collecting revenue quickly to make sure the company has
cash on hand.
 Training - Operational managers work with the human resources department and
departmental managers to develop more efficient ways for employees to do their
jobs. Analyzing work functions is one of the many tasks that an operations
manager performs each day.
Source
http://www.businessdictionary.com/definition/business-management.html

https://www.shopify.com/encyclopedia/business-operations

Production/Operations Management by William J.Stevenson, Irwin/McGraw-Hill

http://www.businessdictionary.com/definition/operations-strategy.html

http://cws.cengage.co.uk/barnes/students/sample_ch/ch2.pdf

http://www.dummies.com/business/operations-management/common-quality-tools-for-operations-
management/

https://www.investopedia.com/terms/b/best_practices.asp#ixzz59GKS4pvG

https://elearningindustry.com/itis-majorana-school-example-best-practice

https://online.kettering.edu/news/2016/07/21/best-practices-operations-management

Session 3

Why some organizations fail?

1. Putting too much emphasis on short term financial performance at the expense
of research and development
2. Failing to take advantage of strengths and opportunities , and/or failing to
recognize competitive threats
3. Neglecting operations strategy
4. Placing too much emphasis on product and service design and not enough on
process design and improvement.
5. Neglecting investments in capital and human resources

Operations Strategy

Are plans for achieving organizational goals. The importance of strategies cannot be
overstated; an organizations strategies have major impact on what the organization
does and how it does it. Strategies can be long term, intermediate term, or short term.
To be effective, strategies must be designed to support the organizations mission and
its organizational goals.
 BUSINESS STRATEGY
Defines long-range plan for
company

OPERATIONS STRATEGY
MARKETING STRATEGY
Develops a plan for the FINANCE STRATEGY
Defines marketing plans to
operations function to Develops financial plan to
support the business
support the business support the business stategy
strategy
strategy
Strategies and Tactics

Organizations have overall strategies called:

Organizational strategies – Which relate to the entire organization
Functional strategies- Which relate to each of the functional areas of the organization. It
should support the overall strategies of the organization

Tactics – Are the methods and actions used to accomplish strategies. They are more
specific than strategies, and they provide guidance and direction for carrying out actual
operations.
Core Competencies

It helps define a business strategy is an understanding of the company’s strength. In

order to formulate a long-term plan, the company managers must know the
competencies of their organization.

It could include special skills of workers, such as expertise in providing customized

services or knowledge of information technology.

Organizational core competencies

1. Workforce  Highly trained
 Responsive in meeting customer
needs
 Flexible in performing a variety of
tasks
 Strong technical capability
 Creative in product design
2. Facilities  Flexible in producing a variety of
products
 Technologically advanced
 An efficient distribution system
3. Market understanding  Skilled in understanding customer
 wants and predicting market trends
4. Financial know-how  Skilled in attracting and raising
capital
5. Technology  Use of latest production
technology
 Use of information technology
 Quality control techniques

Operations strategy as a competitive weapon

Process
An activity or group activities that takes one or more inputs, transforms and add value to
them and provides one or more outputs for the customer
Inputs -> Transformation process (adding value) -> Outputs

Value Chain
Are an interrelated series of processes that produces a service or a product to the
satisfaction of customers.
1. Core process – Deliver value to external customers
 Customer relationship process
 New service/ product development process
 Order fulfillment process
 Supplier relationship process
2. Support process – Provide vital inputs for the core processes
 Capital acquisition
 Budgeting
 Recruitment and hiring
 Evaluation and compensation
 Human resource support and development
 Regulatory compliance
Operations Management
The systematic design, direction, control of processes that transform inputs into
services and products for internal and as well as external customers

Trends and challenges in Operations Management

 Productivity improvement
 Global competition
 Rapid technological change
 Ethical, workforce diversity and environmental issues.

Linkage between corporate, business and operation strategy

Corporate Strategy Business Strategy Operations Strategy

The management Prescribes a precise Broadly it involves
practices, organizational method of creating value sourcing of raw materials
policies, external- and monetizing that value. or the feed, processing to
relationships (either with a It describes the way firm make the final product and
customer, a supplier or a will exploit its core delivering the product or
competitor), and the capital competencies and employ the service to the
structure of the firm its competitive strengths in customer/consumer
creating VALUE

Developing operations strategy

The operations function can develop in order to give a company a competitive

advantage in its market. The operation strategies focuses on specific capabilities of the
operation that give the company a competitive edge.

Operations Manager must work closely with marketing in order to understand the
competitive situation in the company’s market before they can determine which
competitive capabilities are important. There are four broad categories of competitive
capabilities:

1. Cost – Competing based on cost means offering a product at a low price relative
to the prices of competing products. Note that a low cost strategy can result in a
higher profit margin, even at a competitive price. Also, low cost does not imply
low quality.
2. Quality – Many companies claim that quality is their top priority and many
customers say that they look for quality in products they buy. Quality has two
dimensions:
A. High performance design – This means that the operations function will be
designed to focus on aspects of quality such as superior features, close
tolerance, high durability and excellent customer service.
B. Goods and services consistency – Which measures how often the goods or
services meet the exact design specification.
 3. Time – Or speed is one of the most important competitive priorities today.
Companies in all industries are competing to deliver high quality products in as
short a time as possible.
4. Flexibility – As a company’s environment changes rapidly, including customer
needs and expectations, the ability to readily accommodate these changes can
be a winning strategy.
References:
https://www.quora.com/What-are-the-differences-between-corporate-strategy-business-
strategy-and-operational-strategy
Operations Management: An Integrated approach, McGraw-Hill 2010 4th edition
Production and Operations Management, McGraw-Hill 2012

SESSION 3 (Continued)
ELEMENTS OR COMPONENTS OF OPERATIONS STRATEGY

1. Designing the production system

 Designing the production system involves selecting the:

o type of product design,

o type of production processing system and
o the type of finished goods inventory policy

for each major product line the business plan.

o Types of Product Design

 Custom products - Custom products are designed according to

the needs of individual customers

 Standardized products - Standardized products are produce

models, either continuously or in very large batches to meet the
stable demand for longer period.

o Types of Production Processing System

 Product Focused - Generally employed in mass production

organizations, where there are groups of machine, tools and
workers arranged according to their respective tasks in order to
put together a product.

 Process Focused - It is designed to support production

departments that perform a single task like painting or packing.
These systems are highly flexible and can easily be modified to
support other product design.
2. Focus on factories and service facilities

 One important element of operations strategy is to plan for each production

facility to be specialized in some way. Specialization of a production facility
allows it to excel at achieving a particular set of objectives. According to
Wickham Skinner, “A factory that focuses on a narrow product mix for a particular
market niche will outperform the conventional plant, which attempts a broader
mission.” This is because its equipment, supporting systems and procedures can
concentrate on a limited task for one set of customers, its costs and especially its
overheads are likely to be lower than those of the conventional plant. The key
point is that, it is generally desirable for factories and service facilities to be
specialized in some way, so that, they will not be vulnerable to smaller or more
specialized competitors, that can provide customers with a better set of lower
costs, faster product or service delivery, on-time delivery, high product and
service quality, and flexibility.

3. Product/Service Design Development

 After the product is designed and developed it goes through various stages: 1)
introduction, 2) growth, 3) maturity and 4) decline. During the development of
new products such activities like operations, marketing, and engineering
functions are considered. The product design has a tremendous impact on
product quality, production cost, and numbers of suppliers and levels of
inventories.

4. Technology Selection and Process Development

 An essential part of operations strategy is the determination of how products will

be produced. This involves deciding and planning every detail of production
processes and facilities. Combining high-technology equipments like robots,
automated warehouse, with conventional equipments and devising overall
production schemes are the challenges faced by operations manager today.

5. Allocation of Resources to Strategic Alternatives

 Most companies have limited resources available for the production. Cash and
Capital funds, capacity, workers, engineering talent, machines, materials, and
other resources are available in varying degrees to each firm .These resources
must be allocated in ways that maximize the achievement of the objectives of
operations.

6. Facility Planning: Capacity, Location, and Layout

 The long range capacity to produce the products/services for a firm is part of
setting operations strategy. Capital is required for production capacity. The
decisions involved regarding the acquisition of land and production equipments,
specialized production technologies to be developed, and location of new
factories have long-lasting effects and are subject to heavy risk.
COMPETITIVE PRIORITIES
In 1984 Hayes and Wheelwright suggested that companies compete in the marketplace by
virtue of one or more of the following competitive priorities:

 Quality
 Lead-time
 Cost
 Flexibility

Many authors and practitioners have added to and adapted this list over the years.
Foo and Friedman (1992) for example proposed a set of six competitive priorities, adding
‘Service’ and ‘Manufacturing Technology’ to the above while expanding ‘Time’ into:

 ‘time to market’ and

 ‘lead times’

Others have added

 ‘Innovation’,
 ‘Dependability’

Quality, time, cost and flexibility can be defined in various different ways to include, for
example: 
Dimensions of quality:

 Performance - the primary operating characteristics.

 Features - optional extras (the "bells" and "whistles").
 Reliability - likelihood of breakdown.
 Conformance - conformance to specification.
 Technical durability - length of time before the product becomes obsolete.
 Serviceability - ease of service
 Aesthetics - look, smell, feel, taste.
 Perceived quality - reputation.
 Value for money.

Dimensions of time:

 Manufacturing lead time.

 Due date performance.
 Rate of product introduction.
 Delivery lead time.
 Frequency of delivery.
Dimensions of price and cost:

 Manufacturing cost.
 Value added.
 Selling price.
 Running cost - cost of keeping the product running.
 Service cost - cost of servicing the product.
 Profit.

Dimensions of flexibility

 Material quality - ability to cope with incoming materials of varying quality.

 Output quality - ability to satisfy demand for products of varying quality.
 New product - ability to cope with the introduction of new products.
 Modification - ability to modify existing products.
 Deliverability - ability to change delivery schedules.
 Volume - ability to accept varying demand volumes.

MANUFACTURING STRATEGIES
Manufacturing strategies could be defined as a collective pattern of coordinated decisions that
act upon the formulation, reformulation, and deployment of manufacturing resources and
provide a competitive advantage in support of the overall strategic initiative of the firm.
It could also be defined as the set of coordinated tasks, and decisions which need to be taken in
order to achieve the company’s required competitive performance objectives.
The latter definition relates manufacturing strategy with manufacturing objectives, whereas the
former definition connects it with the business objective.
Another defines manufacturing strategies as a blueprint for action towards world-class
manufacturing; a pattern of decision to be executed in line with overall business goals or
objectives mostly through a gradual process.
SERVICES MARKETING STRATEGY
Services marketing strategy focuses on delivering processes, experiences, and intangibles to
customers rather than physical goods and transactions. It involves integrating a focus on the
customer throughout the firm and across all functions. All company functions – marketing,
selling, human resources, operations, and R&D – must work together to create an effective
services marketing strategy. Rather than the traditional goods marketing focus on transactions
and exchange, services marketing strategy is centered on the customer, usage, and
relationships (Vargo and Lusch, 2004a).
ROLE OF OPERATIONS STRATEGY
The role of operations strategy is to provide a plan for the operations function so that it can
make the best use of its resources.
Operations strategy specifies the policies and plans for using the organization’s resources to
support its long-term competitive strategy
The role of operations strategy is to make sure that all the tasks performed by the operations
function are the right tasks.