Develop Strategic Alternatives

The audit provides insights into existing problem areas, and it also highlights some possible directions. In developing alternatives, however, it is important to keep the enterprise’s strategic goals in sight. What are we trying to achieve? Where are the important problems with current strategies and their implementation? Is there sufficient capacity? Is the current technology the appropriate one? If we are not cost competitive, what strategies can change that situation? Are there emerging technologies in products, processes, or both that need top be implemented or at least watched carefully? Are there operations control technologies whose installation could solve or improve current operations performance deficiencies?

The above questions are typical of those that should be considered in developing possible strategic alternatives. Although the six basics of operations strategy form a broad outline, the alternative strategies should be specific to the company and its industry.

The planned status of the operations function relative to the four criteria is provided. For each of the elements, specific alternatives must be developed to realize the planned levels of achievement. For example, our hypothetical company probably employs low skilled workers who are paid low wages. However, since the quality level produced by these workers is high, inspection processes must be thorough to achieve a consistent high level of quality. This can be accomplished, as shown by the case of McDonald’s discussed earlier. Now, with a much greater emphasis on flexibility and quality skilled workers need to be substituted or the labor force may require extensive retraining.

Similarly, it is likely that more design engineers and perhaps fewer industrial engineers are required and that a larger scope of work instead of narrowly defined jobs, greater discretion on the shop floor rather than in central control, and the like may be needed to turn around the work force and job design element. The key point is that the achievement level in Table should not be merely a wish list. The managers must provide specific alternatives to establish clearly how the transition from the present levels in Table to the planned levels in Table below can be made. Vague platitudes and abstract plans will not suffice.

Of course, there is no unique right way to move from the present levels to the planned levels. Several alternatives must be considered. Further, when specific alternatives are evaluated, the planned levels may be adjusted somewhat. For example, strong emphasis on both the flexibility and quality criteria may require decisions that increase capital costs and may result in substantial increase in unit production costs. The company may revise the planned in view of these findings.


Planned status of the operations function relative to the operations strategy
(Priority Weights) (25) (30) (10) (35)
Elements of Cost Quality Dependability Flexibility
operations Strategy
Positioning 25 90 50 90
Process flow and technology 50 75 50 75
Capacity/location decisions 25 100 50 75
Work force and job design 25 100 75 100
Operating decisions 50 90 50 80
Suppliers and vertical integration 25 90 75 100

Select a Strategy:

The assumption is that enterprise goals and strategies guided the development of the alternatives, but goals and strategies need to be highlighted again in selecting an operations strategy. The selected strategy must have strategic fit. It must help achieve the enterprise mission.

In addition, it must have organized fit. The operations strategy must be implemented to be effective, and a brilliant strategy can fall if it does not fit the organization. The difficulties with organizational fit commonly occur with new and emerging technologies – product, process, or operations control – where existing personnel or organizational structure is not well adapted to the strategy. Lack of organizational fit does not mean the strategy is poor, but it may mean that it cannot be implemented now that some organizational development is necessary before one can hope for implementation.

One of the most common difficulties faced by operations managers occurs during the growth phase as the process technology evolves. If staff members have grown up with a system requiring customization, they often have difficulty adapting to the needs of a higher volume, more standardized system.

“What? Gaming in the workplace? No way!” This is something that we hear from Corporate
Closely tied to the question of how much capacity should be provided to meet forecasted
The notion of focus naturally, almost inevitably from the concept of fit. Just as a
At its heart a capacity strategy suggests how the amount and timing of capacity changes
However, as with most strategic decisions, the issue is more complex than it first appears.