Sample Essay

In the new world economy operations management strategy decisions include design or goods and services, managing quality, process strategy, location strategy, inventory management, supply chain and more (Heizer & Render 7). Ducati’s operations strategies are described here forth. Ducati will strive to reduce manufacturing overhead costs by ten percent through process improvement over the year 2009 to year 2010. The existing manufacturing capacity will be doubled over the next three years. Maximum utilization of current capacity will be undertaken to enhance productivity by business process reengineering. Continuous focus on improving product quality will be undertaken with aim of reducing warranty claim costs by thirty percent and create value for customers by reducing maintenance costs of product by fifty percent.  Procurement optimization will be undertaken to improve logistic flow and reduce direct material costs.

For this purpose global sourcing will be used to acquire materials and using cross functional teams to optimize activities. Current direct material costs weight on revenue is a staggering fifty four percent. Initial target will be to reduce it by 0.5 percent by end of this year and later bring it down to fifty percent over the next 3 years. Two new assembly lines with electronically controlled tools will be installed in year 2010.

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