Toward A New Operations Strategy in the Network Economy

The rapid development of information technology has dramatically changed the dynamics of the market and altered the rules of competition. Inter-organization information systems make it possible for firms to achieve effective integration both in decision-making and operations processes, which brings enormous potential for supply chain cooperation. The scope of operations now is no longer confined to plant or strategic business unit (SBU) level. It has expanded to the whole supply chain. In the network economy, almost every underlying assumption of old economy operations management comes into questions. Competitive advantages making firms success in the old economy may lose their utility in the new IT-based economy. New source of competitive advantages should be identified and cultivated. This study conceptually extends existing operations strategy models: (1) to reflect the substantial change brought by the network economy and the new characteristics of emerging operations mode; (2) by extending the unit of analysis from plant and strategic business unit to supply chain organization; (3) by adding new construct and at the same time extending the connotation of prior constructs used in traditional operations strategy models. A conceptual framework of the new operations strategy is recommended