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PROCESS OF PRODUCTION STRATEGY MANAGEMENT

What is Strategic Management?


Strategic or institutional management is the conduct of drafting, implementing and
evaluating cross-functional decisions that will enable an organization to achieve its long-term objectives.
It is the process of specifying the organization’s mission, vision and objectives, developing policies and
plans, often in terms of projects and programs, which are designed to achieve these objectives, and then
allocating resources to implement the policies and plans, projects and programs. A balance scorecard is
often used to evaluate the overall performance of the business and its progress towards objectives.

What is the Strategy in production management?


Strategic management is an ongoing process that evaluates and controls the business and
the industries in which the company is involved; assesses its competitors and sets goals and strategies to
meet all existing and potential competitors; and then reassesses each strategy annually or quarterly to
determine how it has been implemented and whether it has succeeded or needs replacement by a new
strategy to meet changed circumstances, new technology, new competitors, a new economic
environment., or a new social, financial, or political environment.

PROCESS OF PRODUCTION STARTEGY MANAGEMENT

A five-component approach to promote successful organizational


performance
1. Vision formulation which leads to the statement of the Mission.

2. The mission is then converted into performance Objectives

3. To achieve objectives you develop Strategies

4. Strategy Implementation

5. Evaluation of performance
 ESTABLISHING THE HIERARCHY OF STRATEGIC INTENT:-
a. Creating and communicating a vision

b. Designing a mission statement

c. defining the business

d. setting objectives

• VISION
What you want the organization to be, a vision for the future .Your vision is your
dream of what you want the organization to be. Your strategy is the large-scale plan you will
follow to make the dream happen. Your tactics are the specific actions you will take to follow the
plan. Start with the vision and work down to the tactics as you plan for your organization.

• MISSION
Mission or Purpose is a precise description of what an organization does. It should
describe the business the organization is in. It is a definition of “why” the organization exists
currently. Each member of an organization should be able to verbally express this mission. Three
Components of the mission statement

1. The needs to be served by the company

2. The targeted customer group

3. How the company will provide the product/service.

 FORMULATION OF PRODUCTION STRATEGY:-


 Performing a situation analysis, self-evaluation and competitor analysis: both internal and
external; both micro-environmental and macro-environmental.

 Concurrent with this assessment, objectives are set. These objectives should be parallel to
a time-line; some are in the short-term and others on the long-term. This involves crafting
vision statements mission statements overall corporate objectives strategic business unit
objectives and tactical objectives.

 Placement and execution of required resources are financial, manpower, operational


support, time, technology support.

 Operating with a change in methods or with alteration in structure.

 Distributing the specific tasks with responsibility or moulding specific jobs to individuals
or teams.

 The process should be managed by a responsible team. This is to keep direct watch on
result , comparison for betterment and best practices, cultivating the effectiveness of
processes, calibrating and reducing the variations and setting the process as required.

 Introducing certain programs involves acquiring the requisition of resources: a necessity


for developing the process, training documentation,process testing, and imalgation with
(and/or conversion from) difficult processes.

Strategy formulation is the process of determining appropriate courses of action for


achieving organizational objectives and thereby accomplishing organizational purpose.
Strategy formulation is vital to the well-being of a company or organization. There are
two major types of strategy:

(1) corporate strategy, in which companies decide which line or lines of business to engage
in; and

(2) business or competitive strategy, which sets the framework for achieving success in a
particular business. While business strategy often receives more attention than corporate
strategy, both forms of strategy involve planning, industry/market analysis, goal setting,
commitment of resources, and monitoring.

 IMPLEMENTATION OF PRODUCTION STRATEGIES:-


a. Activating strategies,

b. Designing structures and systems

c. Managing behavioural implementation

d. Managing functional implementation

e. Operationalising strategies
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to understand what return you expect from your project. This translates into a more
effective evaluation and implementation. The strategy likely will be expressed in high-
level conceptual terms and priorities. For effective implementation, it needs to be
translated into more detailed policies that can be understood at the functional level of the
organization. The expression of the strategy in terms of functional policies also serves to
highlight any practical issues that might not have been visible at a higher level.

The strategy should be translated into specific policies for functional


areas such as:

 Marketing

 Research and development

 Procurement

 Production

 Human resources

 Information systems

 EVALUATION & CONTROL OF PRODUCTION STRATEGY


a. Performance strategic evaluation

b. Reformulating strategies

c. Reformulating strategies

The final stage in production strategic management is strategy


evaluation and control. All strategies are subject to future modification because internal
and external factors are constantly changing. In the strategy evaluation and control
process managers determine whether the chosen strategy is achieving the organization's
objectives. The fundamental strategy evaluation and control activities are: reviewing
internal and external factors that are the bases for current strategies, measuring
performance, and taking corrective actions.

Difference between strategic control and strategic evaluation ?


Strategic Evaluation:- An evaluation used by managers as an aid to
decide which strategy a program should adopt in order to accomplish its goals and
objectives at a minimum cost. In addition, strategy evaluation might include alternative
specifications of the program design itself, manpower specifications, progress objectives,
and budget allocations.
Strategic Control:- Strategic control is a tool that allows managers to evaluate whether or
not their selected strategies are working as intended. It enables managers to find ways to
improve the strategies and seek changes if strategies are not working.

 CONCLUSION:-
For sustained growth and maintaining market leadership, long-range
production plans and strategic are essential. Competition from abroad has upgraded the
status of manufacturing as a strategic weapon to achieve comparative competitiveness in
India. Advancement made in electronics and information technologies have introduced
new capabilities in the manufacturing operations.

The success stories of several small but high-technology firms in less


advanced countries. Many countries have found advanced strategies which are the key
results areas identified in manufacturing are those of flexibility, quality, rapid
changeover by core standardization and process trade-offs.