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Operations and Supply Strategy

Operations and Supply Strategy. A Framework. Value Chain and Tradeoffs. Customer Services. Customer Desire Product Attributes. Product Design. Use Distributors. Make. Buy. Supply Chain Ownership. Manufacturing Processes. Strategy Foundations. Market Opportunities

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Operations and Supply Strategy

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  1. Operations and Supply Strategy A Framework

  2. Value Chain and Tradeoffs Customer Services Customer Desire Product Attributes Product Design Use Distributors Make Buy Supply Chain Ownership Manufacturing Processes

  3. Strategy Foundations • Market Opportunities • Operational Effectiveness (improvements) • Customer Economics • Sustaining Advantage • Positioning • Building new capabilities (business models) • Strategic Fit

  4. Operational Effectiveness • Cost • Production, procurement, set-up, distribution, inventories, outsourcing • Quality • Time • Fast , on-time, time-to-market • Flexibility • Technology

  5. Customer Economics • Customer’s cost in using the product • Total needs of the customer • Component-price fluctuations and risk sharing • Mass Customization

  6. Capabilities • Efficiency frontier and capability

  7. Sustaining Advantage • Ownership of Channels • Proprietary Standards • High Cost of Switching Out • Non-imitable Products • Leveraging partners in alliance • Continuous stream of new products • Open Architecture • Patents

  8. Issues • Positioning in the Value Chain Network Management System PC Monitor Operating System Printer Keyboard Mouse Processor Modem Zip Drive Mother Board ROM Drive Disk Drive Desk Top PC

  9. Issues (continued) • Capability Choice • Business Models • Architecture

  10. Business ModelCisco Systems

  11. Dell Computers • Dell Computers • database access in real time • suppliers assign engineers to Dell’s design teams • Dell stops line to fix supplier problem • 3P shipping and merge-in-transit

  12. Strategic Fit Capabilities Product Ownership Fragmentation Operational Integral Low Effectiveness Economics Modular High Sustaining Modular Linked and Advantage leveraged

  13. Manufacturing Strategy • Make-to-stock • Assemble-to-order • Make-to-order

  14. Service Strategy • Standardized Service • Assemble-to-order • Customized Service

  15. Decisions • Products • Processes • Facilities • Operations • Business Models

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