Management

Operations and Logistics Management

Operations management is the entire spectrum of functions and processes that are used to carry out production, sales, quality control, and distribution of products and services to meet the goals of an organization. Inventory, storage, and supply of goods constitute logistics management. Logistics control has military origins, where it implied movement of supplies, rations, equipment, gear and weaponry to the waterfront. Now it means delivery of raw material for factory consumption and distribution of the finished product to the end consumer. Together Operations and Logistics management constitute the business process control of an organization.A competitive advantage is an advantage over competitors gained by offering consumers greater value, either by means of lower prices or by providing greater benefits and service that justifies higher prices.Generally, four ‘generic strategies’ are adopted for gaining a competitive advantage. They are differentiation, differentiation focus, cost leadership, and cost focus.We see a differentiation strategy in use in the diamond industry. The diamond jewelry products are uniquely positioned in the market and carry a premium tag. Cost leadership means to gain a competitive advantage by lowering the cost of the product. The Chinese consumer durables are examples of the products that gained a competitive advantage by keeping the production cost low. The differentiation focus is to target a particular product over a narrow clientele in a big competitive market. Exclusive retail of pet dog accessories, shampoos, soaps, diet foods, and supplements is an example of differentiation focus. In the cost focus, an enterprise seeks to provide competition to large companies by focussing on a narrow range of in-house made products. These products have utility similar to the upmarket ones but have the advantage of less cost. However, in the ‘global village,’ the old models of ‘competitive advantage’ are insufficient to lend an edge to a business.

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