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Part One
Introduction
development and supply processes, moving a product
from its initial design through volume production, test,
distribution, and into post-sales service, responsively and
efficiently. Finally, Flextronics has developed integrated
industrial parks to exploit fully the advantages of their
global, large-scale, high-volume capabilities. Positioned
in low-cost regions, yet close to all major world markets,
Flextronics industrial parks can significantly reduce the
cost of production. Locations include Gdansk in Poland,
Hungary, Guadalajara in Mexico, Sorocaba in Brazil,
Chennai in India and Shanghai in China. Flextronics own
suppliers are encouraged to locate within these parks,
from which products can be produced on-site and shipped
directly from the industrial park to customers, greatly
reducing freight costs of incoming components and
outgoing products. Products not produced on-site can be
obtained from Flextronics’ network of regional manufacturing
facilities located near the industrial parks. Using this
strategy, Flextronics says it can provide cost-effective
delivery of finished products within 1–2 days of orders.
What is strategy and what is operations strategy?
Strategic decisions
‘Operations’ is not the
same as ‘operational’
The content and process
of operations strategy
Surprisingly, ‘strategy’ is not particularly easy to define. Linguistically the word derives
from the Greek word ‘strategos’ meaning ‘leading an army’. And although there is no direct
historical link between Greek military practice and modern ideas of strategy, the military
metaphor is powerful. Both military and business strategy can be described in similar ways,
and include some of the following.
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Setting broad objectives that direct an enterprise towards its overall goal.
Planning the path (in general rather than specific terms) that will achieve these goals.
Stressing long-term rather than short-term objectives.
Dealing with the total picture rather than stressing individual activities.
Being detached from, and above, the confusion and distractions of day-to-day activities.
Here, by ‘strategic decisions’ we mean those decisions which are widespread in their effect on
the organization to which the strategy refers, define the position of the organization relative
to its environment, and move the organization closer to its long-term goals. But ‘strategy’ is
more than a single decision; it is the total pattern of the decisions and actions that influence
the long-term direction of the business. Thinking about strategy in this way helps us to discuss
an organization’s strategy even when it has not been explicitly stated. Observing the total
pattern of decisions gives an indication of the actual strategic behaviour.
Operations strategy
Operations strategy concerns the pattern of strategic decisions and actions which set the role,
objectives and activities of the operation. The term ‘operations strategy’ sounds at first like a
contradiction. How can ‘operations’, a subject that is generally concerned with the day-to-day
creation and delivery of goods and services, be strategic? ‘Strategy’ is usually regarded as the
opposite of those day-to-day routine activities. But ‘operations’ is not the same as ‘operational’.
‘Operations’ are the resources that create products and services. ‘Operational’ is the opposite
of strategic, meaning day-to-day and detailed. So, one can examine both the operational and
the strategic aspects of operations. It is also conventional to distinguish between the ‘content’
and the ‘process’ of operations strategy. The content of operations strategy is the specific
decisions and actions which set the operations role, objectives and activities. The process of
operations strategy is the method that is used to make the specific ‘content’ decisions.
From implementing to supporting to driving strategy
Most businesses expect their operations strategy to improve operations performance over
time. In doing this they should be progressing from a state where they are contributing very
little to the competitive success of the business through to the point where they are directly