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Production or Operations Strategy

Elements of Production or operational function

The Production or Operations Strategy is related to the following elements:

  1. Production system,
  2. Production or Operational planning and control,
  3. Supply chain management,
  4. Logistics management

Corporate World Example

Excel Industries, a pioneering company in the area of industrial and agrochemicals, adopted a policy of successive vertical integration for import substitution. It starts with the end product and then integrates backward to make raw materials for it.


Production System

The production system is concerned with the capacity, location, layout, integration, product designed, sequence of working, degree of automation.

Strategies related to production system are significant as they deal with vital issues affecting the capability of the organization to achieve its objectives.

Strategy implementation would have to take into account the production system factors as they involve decisions which are long-term in nature and influence not only the operations capability of an organization but also its ability to implement strategies and achieve objectives.

Production Planning and Control

Strategies related to operations planning and control are concerned with Raw materials supply, other inventory management, and quality management, maintenance of plant and equipment, cost control in every process.

Here, the aim of operational planning strategy implementation is to see how efficiently resources are being utilized. The aim is to know in what manner the day-to-day operations is being managed in the light of long-term objectives. Companies use quality management as a strategic tool.

You can see in case of KSB Pumps is a German company. KSB pumps manufacture valves and pipes.

KSB pumps with has quality control system at every process. KSB Pumps has built a solid reputation for its quality products. Structurally, it has a separated department of quality assurance having two groups of quality inspection and quality engineering. Thus, quality is a consideration not only at the inspection stage but is built into the design itself.

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