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In recent years, management gurus have urged businesses to adopt such strategies as just in time, lean manufacturing, offshoring, and frequent deliveries to retail outlets. But today, these much-touted strategies may be risky. Global financial turmoil, rising labor costs in developing countries, and huge volatility in the price of oil and other commodities can disrupt a company's entire supply chain and threaten its ability to compete.
In Operations Rules, David Simchi-Levi identifies the crucial element in a company's success: the link between the values it provides its customers and its operations strategies. And he offers a set of scientifically and empirically based rules that management can follow to achieve a quantum leap in operations performance. Flexibility says Simchi Levi, is the single most important capability that allows firms to innovate in their operations and supply chain strategies.
A small investment in flexibility can achieve almost all the benefits of full flexibility. And successful companies do not all pursue the same strategies. Amazon and Wal Mart, for example, are direct competitors but each focuses on a different market channel and provides a unique customer value proposition Amazon, large selection and reliable fulfillment; Wal-Mart, low prices that directly aligns with its operations strategy.
Simchi Levi's rules regarding such issues as channels, price, product characteristics, value-added service, procurement strategy, and information technology transform operations and supply chain management from an undertaking based on gut feeling and anecdotes to a science.
