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As the title of this book suggests, operations strategy holds the key to competitive advantage for many organizations. Indeed, it is increasingly recognized as a significant contributor to the effective strategic management of firms both large and small, domestic or international and both profit and non-profit making. Further, despite its historical evolution from a manufacturing or production setting, the service sector and even quasi-governmental institutions now recognize its ubiquitous value and worth.

The study of operations management is one of the oldest business disciplines, but operations strategy, as a subject, is a relatively new phenomenon. This has a major implication: as with any new and unfolding discipline, much of what is reported in this book is heavily research-orientated, both empirical and conceptual. This is important: considerable management literature exists offering glib eulogies without substance or advocation and description without any attempt at order, quantification or practical implementation.

Worse, many approaches reported have suggested almost catholic applicability. It stretches credibility to accept, as many suggest, that all these remedies can offer profound utopian benefits to every firm and every industry: a universal panacea no matter what the ill!

The Difference Between Operations and Strategy

The complexity of our organizations and their contingent, embedded nature in their business and wider environments, makes such claims naive and even misleading. Yet very little is known about operations strategies, their building blocks and their individual power if properly deployed, despite their receiving extensive coverage in management. An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while. No cover image. Read preview. Synopsis This text offers students a high quality treatment of strategic operations management.

The future of strategic operations Management

This process led to several minor changes being made prior to generating the final version of the questionnaire. The questionnaire format was highly structured: all of its questions were fixed-response alternative questions that required respondents to select options on five-point Likert scales. All of the measurement scales used, as shown in Table 2 , were based on previous research. Assuring the validity and reliability of the measures required supporting literature to validate the scales which were used to operationalise the research constructs. As shown in Table 2 , competitive priorities were operationalised using measurement scales adapted from previous studies.

Jordanian manufacturing firms, classified as public shareholding firms on the Amman Stock Exchange were chosen as the target population, because the industrial sector clearly reflects the constructs of this research, in. The sample targeted was the entire population, consisting of 88 industrial firms classified on the Amman Stock Exchange as industrial shareholding firms, according to its report for the year Individual distribution was used to administer the questionnaire, which was accompanied by a covering letter explaining the research objectives.

The participants were asked to complete the questionnaires, which were collected later. The main reason for targeting the entire population was to ensure that the sample was representative and not biased. Depending on the structure of firms, four to five questionnaires were delivered to each manufacturer and were given to its Director, Vice-President, Operations or Production Manager, Finance Manager and Marketing Manager. The respondents comprised individuals in total, of whom completed the questionnaires; 12 out of these responses were unusable.

The number of usable questionnaires was These usable replies represented a response rate of The responding firms covered a wide range of manufacturing activities, including electronics, engineering products, electrical, chemicals and pharmaceuticals. The recommended minimum acceptable limit of reliability for this measure, as reported by [58], is 0.

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As shown in Table 3 , all the constructs passed the reliability test. As shown in Table 4 , frequency and descriptive statistics were used to determine the relative importance of each of the competitive priorities in achieving competitive advantage. The respondents indicated that their firms utilised different competitive priorities to maintain competitive advantage. It may be noted that each the competitive priorities shown in Table 4 has a mean above 3. So it may be concluded that all of competitive priorities are of considerable importance in Jordan.

Table 3.

Multiple regression analysis was conducted to test the research hypotheses. Multiple regression identifies how much of the variance in the dependent variable is explained when a set of variables is able to predict a particular outcome. As shown in Table 5 , Kurtosis and Skewness values were used to check the normality of each variable included in the research. As shown in Table 5 , the values of Skewness and Kurtosis for each variable indicate that the research constructs fell within the acceptable range.

A multiple regression analysis was then conducted. The results are presented in Tables Based on the research hypotheses, the four independent variables of quality, cost, delivery and flexibility were identified as predictor variables and one dependent or outcome variable competitive advantage was considered. The results of the multiple regression analysis, as shown in Table 6 , reveal a coefficient of determination, R 2 , which predicts the relationship between the independent variables and dependent variable, of 0.

This means that This result provides confirmation of the significant role of the four competitive priorities in creating competitive advantage. The results of the F-ratio, as shown in Table 7 , suggest that the regression model is significant at p The regression analysis presented in Table 8 reveals that the creation of competitive advantage is determined by the competitive priorities of flexibility, quality, cost and delivery.

Therefore, all the hypothesised relationships between competitive priorities and competitive advantage are accepted. The multiple regression analysis, therefore, shows the existence of a significant positive relationship between each of the four independent variables quality, cost, delivery and flexibility and the dependent variable competitive advantage.

These results are congruent with the findings of previous empirical work.

For example, [40] found significant relationships between quality, cost and flexibility and financial performance. It should be noted that each of the four competitive priorities quality, cost, flexibility and delivery contributes to improving and sustaining the competitive advantage of a firm, since such priorities are all linked to its corporate and functional strategies.

Operations managers, however, should consider the fact that each of the competitive priorities is a complex construct which ultimately affects the planning and implementation of the operations strategy of a firm by meeting the related organisational objectives. As a way of explanation, competing via a cost reduction leadership strategy leads firms to analyse the manufacturing cost-related categories including direct production costs, productivity, capacity utilisation and inventory reduction [61].

Similarly, quality as a competitive priority is a multidimensional construct.

Phase I: Basic Financial Planning

In their comments on these dimensions, [61] emphasise the conformance dimension of quality. This conclusion leads us to think strategically about the mutual relationships among competitive priorities. Reference [62], furthermore, believes that the four competitive capabilities can be emphasised and enhanced simultaneously. Since competitive advantage is enhanced by an increase in organisational performance, scholars such as [2] have linked competitive priorities to performance.

The findings of [2] are consistent with literature e.

Iconoclastic

The study deals with the four competitive priorities of cost, delivery, quality and flexibility in manufacturing strategy and its findings indicate that different groups of manufacturers Do All, Speedy Conformers, Efficient Conformers and Starters emphasise different sets of competitive priorities, even within the same industry. Further, the Do All types, who emphasise all four competitive priorities, seem to perform better on customer satisfaction than their counterparts in the Starters group. In summary, [2] suggests that different manufacturers use different bases to compete within the same industry.

Similarly, [65] examines the relationship between manufacturing strategy and competitive strategy and their influence on firm performance. The findings of [65] confirm that all four manufacturing strategies cost, delivery, flexibility and quality are means by which a firm can implement its competitive strategies and further that the competitive priorities are interrelated and correlated to one another. In this context, [65] identify the existence of strong relationships between competitive strategy and manufacturing strategy.

In line with [62,65] argue that improving quality can reduce manufacturing lead time, the amount of time spent on reworking and the quantity of materials rejected, thus contributing to improvements in flexibility, delivery times and unit cost efficiencies. Managers need to deal with several types of competitive priority to construct a manufacturing strategy.


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Competitive priorities facilitate the creation of operations and manufacturing strategies to enhance the competitive advantage of a firm. The results of this study indicate, as hypothesised, that strong relationships exist between competitive priorities and competitive advantage. Managers, therefore, need to consider the following implications when planning the operations and manufacturing strategy of a firm: 1 quality positively affects the creation of competitive advantage; 2 cost leadership strategy affects positively the creation of competitive advantage; 3 delivery positively affects the creation of competitive advantage; and 4 flexibility positively affects the creation of competitive advantage.

It is interesting to note also that the four competitive priorities flexibility, cost, quality and delivery exist in most of the industries covered in the sample.

Operations as a competitive advantage in a disruptive environment

This suggests that different manufacturers use different competitive priorities to compete within the same industry. In addition, it can be concluded that each priority affects the others. Providing products at high quality with fewer defects will enable a firm to compete via a cost leadership strategy by reducing set-up time and manufacturing cost. Flexibility as a multidimensional construct acts as a competitive weapon in the arsenal of any manufacturing or service firm when managing demand and capacity in response to changes related to customer needs and expectations.

In addition, flexibility gives a firm the ability to handle variations in customer delivery schedule, to introduce new parts or new products quickly, to adjust capacity rapidly, to customise products and to handle changes in the product mix quickly. It may be concluded that competitive priorities are interrelated and correlated and that such priorities play a major role in creating, developing and sustaining the competitive advantage of a firm.

The findings of this research suggest that linking competitive priorities to competitive advantage is the master key for a firm to survive in a turbulent environment. Operational and marketing strategies should place emphasis on competitive priorities such as quality, cost, flexibility and delivery to achieve, develop and maintain competitive advantage.

It would be of value to conduct more empirical studies into the impact of competitive priorities on the financial and nonfinancial performance of firms and into their role in planning various functional strategies, including those of manufacturing, operations, marketing and finance.

Strategic Operations Management

Mellahi and H. Tracey, M. Vonderembse and J.