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Operations StrategyFinal · Singh

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A–Z Concept Dictionary

Quick definitions with anchor cases. For deeper coverage, see the matching flashcards.

Anticipation vs. Postponement — proactive (push, plan ahead) vs. reactive (pull, decide late). Benetton runs both. Anchor: Benetton.
Assembly line for services — apply manufacturing repetition to services by ruling out arrival/process uncertainty. Anchor: Shouldice, Aravind.
Basis of competition (evolution) — price → selection → speed; the dimension that wins changes over time. Anchor: AmazonFresh.
Bottom of the Pyramid (BOP) — markets with no infrastructure / informal customers / low income; require functional rethink, not form adaptation. Anchor: Aravind.
Capacity strategies — lead / lag / match — build ahead, after, or in step with demand. Anchor: DuPont, Lilly.
Chaining (flexibility) — connect flexible plants so no plant is an island; a little chaining captures most of full-flex benefit. Anchor: Detroit Motors.
Cost decomposition (3-bucket) — best-practice/efficiency · utilization (market) · strategic (product/service choice). Anchor: American Connector.
Cross-subsidy — paying segment funds free segment when same process serves both. Anchor: Aravind (1/3 paying funds 2/3 free).
Dedicated vs. flexible capacity — dedicated cheaper if utilized & demand certain; flexible hedges uncertainty (sequential = future products, simultaneous = current basket). Anchor: Lilly, Detroit Motors.
Demand correlation — flexibility benefit is largest when product demands are negatively correlated. Anchor: Detroit Motors.
Disintermediation — cutting middlemen via platform/scale; Amazon's process focus. Anchor: AmazonFresh.
Economies of scale vs. scope — cost-per-unit at volume vs. cost benefit from variety on shared assets. Anchor: American Connector (DJC scale, ACC scope).
Flexibility (definition) — adaptation speed × range × consistency of performance. Anchor: Detroit Motors.
Focus → Volume → Learning → Process Excellence → Outcome (spiral) — virtuous cycle of operational focus. Anchor: Shouldice, Aravind.
Focus factory — single product/service/process scope concentrates learning. Anchor: Shouldice.
Gini coefficient as a market screen — grocery/food delivery needs high inequality (price-insensitive customers + dense pop). Anchor: AmazonFresh.
Greggio (knit-in-gray, dye-late) — process reversal that postpones color choice till demand is known. Anchor: Benetton.
product-process matrix Product-Process Matrix — diagonal of fit (Project → Job Shop → Batch → Line → Continuous Flow vs. variety/volume); flexibility lets you go off-diagonal. Anchor: American Connector, Wriston, Detroit Motors.
Jackfruit metaphor — flexibility doesn't help current product, only future generations; investing is a selfless act. Anchor: Lilly.
Lifecycle cost / mission misalignment — plant mission must change as products age; KPIs must follow. Anchor: Wriston.
Learning curve — cost falls log-linearly with cumulative volume; can be within-plant only / within-firm / industry-wide (the choice determines pre-emption potential). Anchor: DuPont (within-firm), Lilly (changeover loses learning).
Make-to-order vs. make-to-stock — order = responsive, lower utilization; stock = cost-efficient, higher utilization. Anchor: American Connector (ACC vs. DJC), Chipotle vs. McDonald's.
Mass customization — combine standardization with late-stage variety. Anchor: Benetton, Shouldice.
Mission-specific measurement & incentives — different plants/divisions need different KPIs. Anchor: Wriston.
Modularization, standardization, process reversal — the 3 enablers of postponement. Anchor: Benetton.
Network effects (direct / indirect / data) — same-side users (weak: review depth), cross-side (strong: more sellers attract more buyers), data network (recommendation moats). Anchor: AmazonFresh.
Newsvendor / fashion inventory — single-shot inventory under demand uncertainty; underage vs. overage costs. Anchor: Benetton (implied through greggio).
Pre-emption — use scale + cost to deny competitor volume + signal capacity to deter entry. Anchor: DuPont.
Process focus vs. product focus — Amazon focuses on a process (aggregation, returns-to-scale, fragmented mkt) not a product. Anchor: AmazonFresh.
Quality dimensions — conformance vs. performance — meeting spec vs. delivering function; inspection vs. process control. Anchor: Aravind, Shouldice.
Queueing / utilization-vs-response — response time blows up non-linearly past ~85% utilization (the "knee"). Anchor: American Connector.
Risk allocation in a supply chain — demand risk to franchisees, mfg-execution risk to subcontractors, design risk retained. Anchor: Benetton.
Scale advantage — once you have it, comparable scale is the only way to fight back. Anchor: AmazonFresh, DuPont, Walmart.
Sequential vs. simultaneous flexibility — handles successive product generations vs. current portfolio mix. Anchor: Lilly.
Self-service / P2P / mass customization in services — let the customer do part of the work. Anchor: Shouldice.
Supply network (not chain) — coordinated web of independent firms with aligned incentives. Anchor: Benetton.
United Systems of Benetton — agents + IS + subcontractors + franchisees + incentives — they all fit. Anchor: Benetton.
Value stick — WTP (Willingness to Pay) at top, OC (Opportunity Cost) at bottom; competitive wedge = WTP – OC. Anchor: every case.
Variety as destructive temptation — chasing breadth dilutes focus. Anchor: Shouldice.
Vertical integration / scope — own more of the chain or coordinate via market. Anchor: Benetton (no), Aravind+AuroLab (yes).

Concept-by-Symptom

When you spot a symptom in a case, look it up here to find which concept(s) apply.

Competitive Position

Symptom	Concept	What to do
Competitor has lower cost	3-bucket cost decomposition	Build up the gap; bucket as efficiency / utilization / strategic. Strategic gap can't be closed without re-strategy.
Should we match the low-cost competitor?	product-process matrix + value stick	If your WTP advantage is real, retreat to the niche. If WTP is imagined, you're in trouble.
Industry consolidating; customers shrinking	Power of B in B2B + strategic gap	Niche focus is the only path. Cost war on a shrinking pie kills you.
Premium brand AND low cost simultaneously	Focus → Volume → Learning spiral + customer-as-coproducer	Rare; possible only via deep focus + assembly-line discipline. Anchors: Shouldice, Aravind.
New entrant's basis of competition is different	Basis of competition evolves	Adapt or die (Webvan, Gap died on the wrong basis).

Capacity & Flexibility

Symptom	Concept	What to do
Demand uncertain across products	Sequential vs. simultaneous flexibility	Use breakeven approach — flex while uncertain, dedicated once volume proven.
Building capacity ahead of demand?	Preemption preconditions	All preconditions met → preempt. Any missing → wait.
Big variety, low volume per SKU	product-process matrix off-diagonal + chaining	Modest flex with chaining, not full-flex.
Plant capacity rigid; demand swings	E[Sales] / E[Lost Sales]	Rigid capacity eats downside, blocked from upside. Quantify.
Drug demand could be huge or could flop	Mixed flex/dedicated ("date to marry")	Start flexible; switch to dedicated past breakeven.
Should I buy CNC machines to be flexible?	Flexibility = organizational capability, not equipment	Capex alone doesn't deliver flex. Plan training + scheduling over years.

Plant / Mission

Symptom	Concept	What to do
Plant always looks unprofitable on corporate KPIs	Mission-specific KPIs	Plant probably has a different mission. Customize KPIs to match.
Should we close the underperforming plant?	Power of B in B2B + myopia & amnesia	Customer relationships may force keeping it 5-10 yrs with redefined mission.
Different lifecycle stages mixed in same factory	Lifecycle product-process fit	Customize accounting and process expectations per product line.

Supply Chain & Boundaries

Symptom	Concept	What to do
Should we vertically integrate this input?	Vertical integration test	Yes only if input is strategic + scale + firm-specific learning + no competitive market.
Demand uncertain at variant level (color, config)	Postponement (modularization + standardization + process reversal)	Defer differentiation till demand visible.
Pure JIT and we keep stocking out	JIT prerequisites missing	Add a buffer (postponement-style) — pure JIT needs stable demand + reliable suppliers.
Supply chain coordination broken at scale	Information system as binding constraint	Human-trust system can't scale past a point. Invest in IS.
Two firms similar outcomes, different systems (Zara vs Benetton)	Imitable but takes time + supply networks don't travel	The system, not the outcome, is the moat.

Service & BOP

Symptom	Concept	What to do
Service has high variability + can't standardize	Rule out arrival/process uncertainty	Schedule, screen, simplify. No assembly-line for services without this.
Quality + cost both demanded; customers pay premium	Focus-Volume-Learning spiral + assembly line for services	Singh's signature combo. Shouldice, Aravind, In-N-Out.
Bottom-of-pyramid market, no infrastructure	Rethink functionality, not form + deskill + cross-subsidy	Don't downgrade Western product. Aravind playbook.
Customer-facing service with reputation as moat	Word-of-mouth + alumni channel	Brand compounds with quality. Don't break the focus that earns it.

Platform & Scale

Symptom	Concept	What to do
Online platform, fragmented + high-FC market	Process focus (Amazon-pattern)	Aggregate. Returns-to-scale + data flywheel + Prime-style moat compounds.
Two-sided market, more users → more value	Network effects (direct / indirect / data)	Cross-side and data effects beat same-side. Network beats scale in platforms.
Should we enter a 2% margin market?	Process focus extension + basis of competition	Margin is downstream of strategic position. Defensive necessity + leverage justifies entry.
Established firm being attacked by new entrant	Scale + B&M proximity vs. basis of competition	Walmart-Amazon: different moats. Recognize what's actually at stake.

Organizational Scope

Symptom	Concept	What to do
Founder firm hitting scale; family vs. professional managers	Information system + culture transition	Process discipline must replace personal trust at a certain scale.
Multiple brands or geographies straining coordination	Centralize vs. decentralize	Centralize standards + capital allocation; decentralize execution + local adaptation.
Firm succeeding but tempted to add product variety	Variety as destructive temptation + focus break	Resist unless the operating system genuinely transfers (process focus).

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