Operations Management, Make to Order Strategy - Assignment Example

Student’s Name: Instructor’s Name: Course Code: Date of Submission: Question 1 Operations strategy is the total complex pattern which involves making long term decisions to ensure the organization remains competitive. It comprises all the necessary tasks in an organization such as purchasing of raw materials until they are delivered to an organization (Robert et al 2001). Operations strategy helps to improve the delivery of services and products to customers hence it ensures that the customers are satisfied with what they get from the company. Operations strategy therefore helps an organization to achieve its goals and objectives while satisfying the customers Operations strategy can take two dimensions. The first dimension is top down and the other dimension is the bottom up strategy. The top down operations strategy is whereby the strategic decisions are made at top level and affect the general operations of the organization. It gives the direction of an organization (Cochran & Alberto 2005). Bottom up operations strategy is the strategy where the organization makes strategies which are based on the market conditions. There are various factors which influence the strategic decisions made by an organization. The first factor is the globalization. The world is becoming one small village where people can interact with no difficult. This has led to high competition in various industries and if an organization cannot be able to set its strategies well it might not be able to compete in the market. In this effort, many organizations are considering how they can achieve competitive advantage. One strategy is through strategic planning of the operations of the organization (Cochran & Alberto 2005). This will help an organization to satisfy the customers’ needs which can lead to competitive advantage. Another factor which has affected operations strategy is the technology level. Technology has been changing over time and this has affected the operations of the organizations. The speed at which customers are served is high and also technology has helped to improve connectivity with the customers (Cochran & Alberto 2005). Due to technological advancements, operations strategy has been improved and the products and services are meant to satisfy the needs of the customers. In addition, organizational structure can also influence the operations strategy. The management of an organization can have different priorities with other management for instance the previous executive team. Changes in organizational policies can affect the decisions made concerning the operations strategy (Cochran & Alberto 2005). This is because they will have different priorities for instance increasing market share strategy and cost leadership strategy. Competitive priorities are the priorities which are applied by an organization with the aim of gaining competitive advantage. Competitive priorities help to improve the performance of an organization by attracting many customers. This is because through effective implementation of operations strategy, the operations of an organization will be smooth which will help to satisfy the needs of the customers better. This will help to attract and retain customers hence increasing the competitiveness of the organization (Cochran & Alberto 2005). They also help to improve the reputation of an organization (Dunn & Jeste 2007). Operations strategy may enable an organization to be involved in the corporate social responsibility. This will help to preserve the environment as well as improving the living standards of the people thus promoting the reputation of the organization. This will help to attract more customers and also the organization’s products will be readily accepted by the customers. Competitive strategies further help to improve the delivery of services and products to customers leading to their satisfaction. The operations strategy aims at improving the delivery of services to customers at the least cost possible (Jonsson & Stig-Arne 2002). Through operations strategy, the products are delivered to customers premises in required quantities and in the right quality and at the right time. This will help to satisfy the needs of the customers better besides enabling the organization to improve its operations in the market. In this regard, operations strategy helps to improve the general performance of an organization by meeting the needs of the customers. It also helps an organization to improve its efficiency in its organization. Question 2 Make to order strategy is the strategy which allows manufacturers to make products according to the specification of the customers. The products are only manufactured once the customer has placed an order. From the customers’ point of view, it is the buying strategy where the customer can buy products once they are offered by the producer (Montgomery 2012). The factors to consider in this strategy include the patience of the customer. This strategy is based on the fact that manufacturing is done only when there is an order. This implies that the customer should be patient to wait for the products to be manufactured. This strategy is therefore suitable when the products are not needed immediately. Make to order strategy is also effective when there are ready materials for manufacturing the products. Once the order is made, manufacturing process starts immediately to meet the deadline of the customer (Meredith & Scott 2002). If the materials are not ready for manufacturing, it will be hard to meet the deadline of the customer because the raw materials have to be ordered which will take some time. The advantage of this strategy is that it reduces the costs of holding inventory. There are some costs which are incurred for holding manufactured products such as storage costs. With this strategy they will be eliminated (Meredith & Scott 2002). Make to order strategy on the other hand helps to eliminate variety of products. This is because once the products have been manufactured they are distributed to the respective customers (Meredith & Scott 2002). This helps in variety reduction which improves the efficiency of services to customers. On the other hand, assemble to order is a strategy which allows the manufacturer to manufacture products in advance. From the customers’ point of view it is the strategy of buying already manufactured products (Montgomery 2012). This is the strategy whereby products are assembled once the order is made. Assembling cannot be done if there is no order made. Assemble to order strategy also has some advantages. The first advantage is that it helps to reduce the variety of assembled products. The products are assembled once an order is made thus this strategy helps to reduce the stored products. Another advantage is that assemble to order strategy is that there is flexibility in using the assembly products. If there is no order which has been made, the parts of assembly can be used somewhere else. This also helps to reduce the variety of stocked items (Meredith & Scott 2002). There is also the advantage of reduced operations costs. There is little storage of assembled products thus costs such as storage and labor costs are eliminated and this improves the efficiency of the organization. The disadvantage of assemble to order strategy is that it may increase delivery time of the assembled products. This is because the products have to be assembled once the order is made which may take some time (Meredith & Scott 2002). Another disadvantage is that it may lead to stocking excess inventory parts which lead to holding of stock which can otherwise be used somewhere else. Make to stock strategy is the strategy used by manufacturers to manufacture products based on the focus of the demand (Montgomery 2012). Forecast is done and then manufacturing is done according to the forecasted demand. This is the most commonly used strategy by many organizations. The quantity to be manufactured depends on forecasting the supply and the demand. The products are manufactured according to the estimated demand and supply balance which is calculated using the laws of supply and demand. This technique has some advantages and they include the following. The first advantage is that this technique helps an organization to manufacture units which can meet the changing demands of the customers. The stocked units can be delivered to customers where there is need thus the organization will avoid stock out experiences (Cochran & Alberto 2005). This technique also helps an organization to enjoy economies of scale. The organization will buy raw products in large quantities which will lead to quantity discounts given to the buyer. Quantity discounts help to lower the overall cost of production in an organization. However, the drawback of this strategy is that it depends on the accuracy of the forecast. Inaccuracy in forecast will lead to overstocking or under stocking (Cochran & Alberto 2005). An organization may overstock the products which may lead to increased expenses of holding stock such as storage costs. Question 3 Capacity planning is matching the supply with the demand. It helps to utilize the resources of the company effectively. The four main steps involved in making capacity decisions include; selecting the most appropriate process to be used in capacity planning (Stevenson 2002). The process should not be complicated but simple to be implemented by the organization. The second step is asses the resources to be measured. This will help to set the limits of the capacity planning. The resources are very essential in determining the success of the capacity decision (Stevenson 2002). The performance of the resources is also measured to determine the amount of resources that will be consumed. The third step is to conduct forecasting on the future demand. The demand will help in making the capacity decision. Accuracy of forecast improves the accuracy of the capacity planning. The last step is to implement the capacity decision reached (Stevenson 2002). The decision should be implemented taking into all the aspects required to make the decision successful. Capacity planning takes two dimensions which are long term capacity planning and short term capacity planning. Long term capacity planning includes setting long term strategic plans concerning the production facilities for a long period of time (Vollmann et al 2005). The major decisions which are involved in the long term capacity planning include location issues and technological planning for an organization. On the other hand, there is short term capacity planning. This involves strategic planning for factors of production such as scheduling for labor and allocating various resources to meet the needs of the organization. It involves making short term goals for the organization. An organization can improve its production by strategically planning for its resources and skills available. Effective demand forecast and training the employees can help an organization to improve the resources which can lead to improved production of the organization (Vollmann et al 2005). There are various techniques which can be applied in capacity planning. The first one is the capacity planning which uses the overall factors. This type is based on the master production schedule (Vollmann et al 2005). Another technique is capacity bills which use the bills of materials to forecast the demand. The concerns that will be considered in forecasting for capacity planning include the changes in economic conditions. This is important because it helps to know the purchasing capacity of the consumers (Stevenson 2002). Another concern is the lifestyle change. Customers will change their buying behavior regularly thus the capacity planning should take into consideration the changing lifestyles. Another concern which should be taken into account when conducting capacity planning is to know which programs can be run together. This will help an organization to design programs for processes which can run at the same time (Vollmann et al 2005). Time and resources will be saved if two or more programs can be run at the same time. Capacity of the facilities should also be a concern. The machines should be assessed their capability and how much they can produce at a given time. This is important as the production capacity can be estimated (Vollmann et al 2005). Works Cited Cochran, Jeffery & Alberto Marquez Uribe. "A Set Covering Formulation for Agile Capacity Planning Within Supply Chains." 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