Align resources with requirements
Download
1 / 15

Level 1 - Fit - PowerPoint PPT Presentation


  • 80 Views
  • Uploaded on

Align resources with requirements. Level 1 - Fit. Develop sustainable competitive advantage. Increasing complexity. Level 2 - Sustainability . Include impact of uncertainty. Level 3 - Risk. This chapter examines the third level of the operations strategy process – risk.

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha
Download Presentation

PowerPoint Slideshow about 'Level 1 - Fit' - rozene


An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
Slide1 l.jpg

Align resources with requirements

Level 1 - Fit

Develop sustainable competitive advantage

Increasing complexity

Level 2 - Sustainability

Include impact of uncertainty

Level 3 - Risk

This chapter examines the third level of the operations strategy process – risk


Slide2 l.jpg

External operational risk (Market needs exceeding current level of capability means risk of failing to satisfy the market)

Internal operational risk (excess capability for current market needs means risk of unexploited capabilities)

Real fit over time (‘requirements evolve and capabilities evolve’)

Line of fit

Level of market requirements

B

A

Level of operations resource capability


Slide3 l.jpg

B level of capability means risk of failing to satisfy the market)

y2

x2

Pure operations risk

Line of fit

Level of market requirements

A

y1

Level of operations resource capability

x1


Slide4 l.jpg

E level of capability means risk of failing to satisfy the market)

F

Speculative operations-related risk

Line of fit

Level of market requirements

y4

D

y5

C

y3

Level of operations resource capability

x3

x5

x4


Slide5 l.jpg

CAUSATIVE level of capability means risk of failing to satisfy the market)

EVENT(S)

NEGATIVE

CONSEQUENCE

Risk and the operations transformation model


Slide6 l.jpg

1985 level of capability means risk of failing to satisfy the market)

1998

Line of fit

Level of market requirements

H

y8

y7

I

y6

G

Level of operations resource capability

x6

x7

Speculative operations-related risk at Monsanto (1985-1998)


Slide7 l.jpg

5.00 level of capability means risk of failing to satisfy the market)

Line A

Increasingly risk averse

4.00

Line B

3.00

0

20

25

30

35

40

45

50

55

60

Age

Age and risk-taking profile


Slide8 l.jpg

Line of fit level of capability means risk of failing to satisfy the market)

Level of market requirements

y10

K

L

y9

J

Level of operations resource capability

x8

x9

x10

Subjective operations failure


Slide9 l.jpg

OPERATING CONTEXT level of capability means risk of failing to satisfy the market)

CAUSATIVE

EVENT(S)

(corroded storage tank leaks)

NEGATIVE

CONSEQUENCE

(?)

The influence of context on causative events and negative consequences


Slide10 l.jpg

4. level of capability means risk of failing to satisfy the market)

The negative consequences for all possible stakeholders. This might include generic groups such as ‘concerned citizens’, politicians and media.

3. The negative consequences for immediate stakeholders (i.e. staff, managers, customers, neighbours). Prone to greater subjective interpretation.

Generic stakeholder concerns

Specific stakeholder concerns

Specific operations process concerns

1. The direct (physical and temporal proximity etc.) negative consequences of an operational incident.

2.

The negative consequences for the entire operations process. Might be separated from specific incident by space and time.

Specific event

Layers on context for understanding negative consequences


Slide11 l.jpg

Prevention level of capability means risk of failing to satisfy the market)

Recovery

Mitigation

Three risk control strategies

Negative consequences

Causative event(s)


Slide12 l.jpg

[1] level of capability means risk of failing to satisfy the market)

Degree of coupling in the operation

Loose

Tight

Major

[2]

Potential crisis

[4]

[3]

Causal event (failure)

Probable control through mitigation

[5]

[6]

Minor

Coupling, mitigation and recovery


Slide13 l.jpg

Very undesirable: low pay-off and high risk level of capability means risk of failing to satisfy the market)

A

X

Spread of pay-offs for decision

B

Y

Very desirable: high pay-off and low risk

The risk-return diagram


Slide14 l.jpg

mean level of capability means risk of failing to satisfy the market)

HIGH

Probability

Value of firm

LOW

Today

Low

2 years

High

Time

Uncertainty cone and outcome distribution

Based on Amram and Kulatilaka, 1999)


Slide15 l.jpg

Cone of uncertainty for investment level of capability means risk of failing to satisfy the market)

Operational assets and capabilities

Cone of external uncertainty

Assets and capabilities modifying exposure to uncertainty


ad