There are three strategies in production planning: the chase strategy, the stable workforce-variable work hour’s strategy, and the level strategy. Businesses can choose one or more of these. When a business uses one of these strategies it is called a pure strategy and when it uses two or more it is called a mixed strategy (Jacobs & Chase, 2011). Team C reflected upon the chase strategy, identified three companies that use the chase strategy, and the challenges of using this strategy. Chase Strategy Companies
This strategy can be successful for certain types of companies. A catering operation would benefit from not having a full time service staff, especially during slow seasons. When business picks up the caterer can simply hire service staff through a temp agency. Construction companies general operate under the chase strategy as well, hiring workers for big jobs and laying them off when the job is complete. The chase production plan is when demand changes or fluctuates throughout the year. The production is “chasing” the demand needs of the customers.
An example of the chase strategy of the production plan would be farmers who use migrant workers to pick crops. The product demand influences are the growing cycle, water scarcity, weather conditions, market needs, and crop size. The farmer may harvest several different crops at different times of the year. Migrant workers only work for those specific harvest periods and move on to other farms for other crop harvests. This requires the farmers to have flexibility with planting and harvesting the product depending on the variable demand challenges. Challenges
Any compassionate business leader will confirm that it is never easy to layoff personnel or make the announcement about the end of a project. Delivering pink slips to hard working individuals requires a certain level of empathy. It is unfortunate because no matter how the message is delivered someone will carry bad feelings about the organization with them. Let’s not ignore that letting employee’s go can also cost money. Depending on their tenure with the company these costs could range from contributing to unemployment insurance or maybe even providing a severance package.
Changes in inventory are not considered to be a driver for the Chase Strategy. Production and demands will vary and staffing adjustments are necessary to ensure the survival of the business. During different periods managers must match production with demand needs by using temp workers, new hires, layoffs and maybe even contractors. The examples above could be considered as challenges attached to the Chase Strategy. Conclusion Chase strategy is a part of the production planning strategies and a chase production plan implies that the demand in production varies.
According to the textbook, Operations and Supply Chain Management (2011), the success of implementing the chase strategy depends on having a pool of easily trained applicants to draw on as order volumes increase and lay-off employees when orders decrease. When deciding rather the chase strategy is best suited, a business must consider if the company has the flexibility to inherent the production capacity of increased and decreased to match, or chase, the demand of goods and services. Business that are able to offer the flexibility, may benefit from a good strategy fit and deliver excellent performance results (Douglas, 2013). References