Page 106 - Operations Strategy

TARgETing And OPERATiOns fOCus 81
simple notion – that many operations are carrying out too many (often conflicting)
tasks. The obvious result is that they are unable to perform them all with any real degree
of success, whereas concentrating on one or two specific objectives, even at the expense
of adopting a vulnerable ‘concave’ trade-off curve as discussed previously, can lead to
substantially superior performance in those few objectives. It means redeploying opera-
tions resources to the needs of only a very specific part of the market.

the concept of focus

Most of the early work on what was then called the ‘focused factory’ concept was car-
ried out by Wickham Skinner of Harvard Business School. Based on his ideas of how
trade-offs dominated operations decision making, he argued that one way of achieving
an effective operations strategy is through the concept of factory focus. This meant
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that first a business should establish a consistent set of policies for the various elements
of its operations, which will support not only each other but also marketing require-
ments. Second, because of the inherent trade-offs, one operation cannot provide peak
performance in all performance objectives at the same time. In his article ‘The Focused
Factory’, Skinner based these arguments on his observations of a variety of US industries
in the early 1970s. He found that most factories were trying to tackle too many tasks
and therefore trying to achieve too many objectives. Because of this they were failing to
perform well in any single objective. He concluded that a factory that was focused on
a narrow range of products, and aimed at satisfying a particular section of the market,
would outperform a plant that was attempting to satisfy a broader set of objectives. The
equipment, systems and procedures that are necessary to achieve a more limited range
of tasks for a smaller set of customers could also result in lower (especially overhead)
costs. Focus, according to Skinner, can be expressed as dedicating each operation to a
limited, concise, manageable set of products, technologies, volumes and markets, then
structuring policies and support services so they focus on one explicit task, rather than
on a variety of inconsistent, conflicting, implicit tasks.

Focus as operations segmentation
In Chapter 1, we briefly described how marketing managers attempt to understand
their markets through the process of segmentation. Market segmentation breaks heter-
ogeneous markets down into smaller, more homogeneous markets. Within operations
resources, what we have called ‘focus’ is very similar to the process of segmentation. In
fact it can be regarded as operations segmentation. Operations, like markets, are com-
plex. A whole range of different skills, process technologies, flow sequences, knowledge
applications, individual decisions and so on, come together to create a range of differ-
ent products and/or services. Operations managers spend much of their time attempt-
ing to split up the tasks of managing these resources in order to simplify them and
thereby manage them more effectively. In effect, they are segmenting their operations
resources. And, just as in marketing there are continual debates around the best way
to segment markets, so in operations there are similar debates as to the most sensible
way to segment resources. Ideally, operations segmentation and market segmentation
should correspond; that is, separate clusters of resources clearly and distinctively serve
individual market segments. The major problem with the whole idea of focus, however,
is that what is a sensible basis for segmenting markets does not always map onto the
ideal basis for segmenting operations resources. For example, an advertising agency

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