PROJECT

IMPLEMENTATION
STRATEGY &
COMPETITIVENESS
Dr. Rucha, K.
DMS&PP

0722/77 591364

kingsrucha2020@gmail.com
kingsrucha@uonbi.ac.ke
 Competitiveness and Operations
Strategy
• Intensified competition in a number of global
recently has triggered renewed interest in the
operations function and the contribution it can
make to a company's overall competitiveness
• A growing recognition that it can be a formidable
weapon if equipped and managed properly.
• Any organization's success in the long term needs
operations-based objectives
• Hence the development of a coherent
operations strategy
• Early works on the concept of operations
strategy are traceable to Wickham
skinner at the Harvard Business School in
the late 60s and early 70s
• Operations strategy currently the most
researched area in the endeavor to come
up with the most competitive strategy
 Competitiveness:
National and Firm-Specific
• Competitiveness of a nation is its comparative
ability to sell its products in the global markets
while raising or maintaining its standard of living.
• Competitiveness of a firm is its ability to compete
and prosper in the marketplace.
• Competitiveness can be thought of as a measure of
productivity or the efficiency and effectiveness of
converting natural and human resources into useful
products and services.
 Concept of strategy

◆ Business strategy is a long-range game plan of an

organization and provides a road map of how to
achieve the corporate mission.
◆ Strategy
✓ a common vision which provides direction for
action in an organization.
✓ Provides consistency in decisions, and keeps the
organization moving in the right direction
• Concerned with setting broad policies and
plans for using the resources of the firm that
support the corporate strategy
– Design of the process
• selecting technology, sizing the process, and
location
– Infrastructure needed to support the process
• planning and control systems, quality assurance, and
organization of the operations function
 Strategy & Competitiveness

◆A strategy defines how it will compete

in its own best way.
◆strategy consists of policies and plans
for how to use production resources to
meet corporate strategic goals.
◆strategy must be consistent with and
supportive of the corporate strategy.
 Competitive priorities
• Competitive abilities that a business should
seek to acquire, sustain, or improve on.
• Performance objectives which operations
management should try to achieve for the
business to gain an operations-based
advantage, and further, for it to contribute to
its competitiveness.
 Also referred to as:

• Performance Objectives
• Competitive Devices
• Strategic Choice Attributes
• Customer Requirements
• Competitive Priorities
• Competitive Capabilities
• Operations priorities
The literature identifies a set of four
performance objectives
• Doing things cheaply (for a cost advantage)
• Doing things right (for a quality advantage)
• Doing things on time (for a
delivery/dependability advantage)
• Being able to change what is done (for a
flexibility advantage)
The operations function can provide a competitive advantage
through its performance at the five competitive objectives

Quality Being RIGHT

Speed Being FAST

Dependability Being ON TIME

Flexibility Being ABLE TO CHANGE

Cost Being PRODUCTIVE

Five Performance Objectives
• Quality
• Speed
• Dependability
• Flexibility
• Cost
 Operations Priorities
• Cost
Efficiency
– Low-cost operations
• Quality
– Customer pleasing design
– Consistent
• Time
Effectiveness
– Fast delivery time
– On-time, reliable delivery
– Development speed (time to market)
• Flexibility
– Customization (product flexibility)
– Volume flexibility
 QUALITY
✓High and consistent product and process
quality; focus on customer requirements
✓Wanting to satisfy customers by providing
goods and services which are ‘fit for their
purpose’
▪ Doing things right
▪ Appearance
▪ Performance and function
▪ Wear, endurance ability
▪ After-sales service
 DELIVERY
✓Doing things on time
✓Keeping the delivery promises which have
been given to your customers
✓Doing things quickly
✓Delivering goods or services to the
customers as soon as they would like them
✓Time-to-market (development) and order
delivery
 FLEXIBILITY
✓Quickness of response to changes in
product mix, demand volume and
technology (customization)
✓Being able to change what you do to satisfy
changed requirements to cater for
unexpected requirements
 COST
✓Low cost operation; suited for commodity-
like products
✓Wanting to do things cheaply
✓Aiming to give good value at a low cost and
still achieve a satisfactory return
 Setting Priorities
Cost

Can you
Delivery have it Quality
all?

Flexibility

Are these objectives tradeoffs or independent?

 Sand Cone model
• Starting foundation is quality
– Ferdows and De Meyer(1990)
– Sequence: Quality, Dependability, Flexibility,
and Cost efficiency
• Other priorities build on the quality
foundation
– E.g Roth and Miller(1992); Noble(1995)
Sandcone model
Stage 1 - one priority is developed

Stage 2 - a 2nd priority is developed;

1st priority is widen

Stage 3 - a 3rd priority is developed;

1st and 2nd priorities are widen

Stage 4 - ...
 Productivity Frontier Model
• The productivity frontier is the sum of all
existing best practices of a firm at any given
time.
– It is therefore the maximum value that a firm
delivering a particular product can create at a
given cost, using the best available
technologies, skills, management techniques,
and purchased inputs.
• The productivity frontier is a moving target.
– New innovations can move it outward.
•It is only on the frontier that traditional trade-
offs will exist (M. Porter).
–Farther back from the frontier, one is more likely
to experience simultaneity of excellence.

•Simultaneity is indicative of slack in the

existing processes.
–Hence identify and exploit existing slacks in
order to realize improvements.
P. M.