Production Strategy: Reaching the Goals:

Nearly two decades ago productivity was the catch word of the business organizations. Concerned about the term productivity, research centres, several conferences, seminars were organized. As a result, many definitions of productivity have been proposed but all dealing with the efficient use of resources, and thereby reducing the cost of production. But focusing excessively on the cost reduction may result in poorer decisions which are contrary to the goals of the organizations. So, there is a quest to that the operations (production) decisions should be taken in such a way that to achieve broader goals of organizations, such as profitability and growth or for not-for-profit organisations, better public service.

The strategy of an organization reflects its mission and defines its goals, policies, and performance measures precisely. It defines the products produced, ways to compete for customers, and the measures for the performance. It also identifies the centre of the concentration of all the efforts and the competitive advantages the organization shall exploit. Each functional unit has its own strategies designed to support the organizations strategy and to enhance the ability of the organization to achieve its goals. Initially, the business strategies were viewed solely in terms of marketing that means deciding about the products to produce and the market to serve. The production function was referred to impact the strategy minimally and producing and delivering to the market via function at a minimal cost. Only recently, production function has achieved much attention in strategic phase that decisions about production can enhance organization's ability to compete for customers w.r.t. price, quality, responsiveness and reliability of the delivery, product customization, and flexibility. Good production or operation performance is not sufficient to boost an organization, if the production or operational strategy is not consistent with the organization's strategy. An instance, supporting this fact may be a company marketing a product based on quick delivery and product customization may not sell its product if the production function is focusing on product standardization and low cost.