The World without Bankruptcy Laws
Bankruptcy is one of the natural states which a company may find itself in. Entrepreneurship is primarily about taking risks. When companies take risks, some of them succeed, whereas others fail. Hence failure is a natural part of the business. However, many critics of bankruptcy laws believe that there isn’t a need for an elaborate […]
The Wirecard and Infosys Scandals are a Lesson on How NOT to Treat Whistleblowers
What is the Wirecard Scandal all about and Why it is a Wakeup Call for Whistleblowers Anyone who has been following financial and business news over the last couple of years would have heard about Wirecard, the embattled German payments firm that had to file for bankruptcy after serious and humungous frauds were uncovered leading […]
Why the Digital Age Demands Decision Makers to be Like Elite Marines and Zen Monks
How Modern Decision Makers Have to Confront Present Shock and Information Overload We live in times when Information Overload is getting the better of cognitive abilities to absorb and process the needed data and information to make informed decisions. In addition, the Digital Age has also engendered the Present Shock of Virality and Instant Gratification […]
Why Indian Firms Must Strive for Strategic Autonomy in Their Geoeconomic Strategies
Geopolitics, Economics, and Geoeconomics In the evolving global trading and economic system, firms and corporates are impacted as much by the economic policies of nations as they are by the geopolitical and foreign policies. In other words, any global firm wishing to do business in the international sphere has to be cognizant of both the […]
Why Government Should Not Invest Public Money in Sports Stadiums Used by Professional Franchises
In the previous article, we have already come across some of the reasons why the government should not encourage funding of stadiums that are to be used by private franchises. We have already seen that the entire mechanism of government funding ends up being a regressive tax on the citizens of a particular city who […]
It is very important for an organization to have well defined objective. A well-defined objective facilitates development of strategies and policy thereby creating value for customers.
Operational strategy is essential to achieve operational goals set by organization in alignment with overall objective of the company. Operational strategy is design to achieve business effectiveness or competitive advantage.
Operational strategy is planning process which aligns the following:
In this global competitive age organization goal tend to change from time to time therefore operations strategy as a consequence has also be dynamic in nature. A regular SWOT analysis ensures that the organization is able to maintain competitive advantage and business leadership.
For success of organizational strategic objective, strategic planning has to trickle down to various function areas of the business. In order to build strategy management process a sequential process as below is followed
Competition Analysis: In this step company evaluates and studies current competition in the market and practices that are followed in the industry for operations and production vis-a-vis company policies
Goal Setting: Next step involves narrowing down the objective towards which the organization wants to move towards.
Strategy Formulation: The next step is breaking down of organizational goals into operations and production strategies.
Implementation: The final step is to convert operations and production strategies into day to day activities like production schedule, product design, quality management etc.
As organizations are always customer-centric, production and operation strategy for organization are built around them
Measurement of formulated operations and production strategy is important to maintain alignment with the organization objectives. In simple terms productivity is defined as sum of total output per employee or per day. Productivity of company is dependent on industry and environmental conditions in which it is operating.
Two essential part of productivity are labor and capital. In scenario of limited resources, optimum and efficient utilization of labor and capital will generate favorable productivity. Productivity measurement also enables company to identify areas which require improvement or special focus. Also productivity provides ready report card to measure status against company’s production objective.
Productivity measurement can be classified in three categories based on the inputs used for calculation. Partial productivity ration of output is compared to one of resource used for example, labor productivity where output is compared to the labor wages.
Total productivity measure takes into consideration sum of all input factors which are used for the output.
In the modern age technology plays an important part in productivity.
Another important factor is the case of production is wastivity. Not 100% of input would be converted to output, there is going to waste during production.
Wastivity is reciprocal of productivity. Classic examples of wastivity are defective products and services which either have to be re-cycle or disposed of completely. Other example is idle capacity of material, man-power equipment etc.
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