Nigel Slack, author with the Operations Advantage, discusses several ways to gain a successful operations strategy
You will find there’s common misunderstanding about operations strategy: it serves to implement the decisions handed down by whoever is formulating business strategy. Although implementing business strategy top-down is a natural part of operations strategy, it is just one of four elements that must be present if any operations method is to work. These components are illustrated in the diagram below.
All these elements is really a necessary condition to build up a totally strategic operation. These four elements (or perspectives) on operations strategy are discussed in detail below.
Top-Down: Operations must directly reflect the business’ overall strategy
Operations is a amongst many functions that should be aligned with business strategy and pull in the same strategic direction. Deriving an Cheap Operations management Books from a business strategy will not be a simple planning activity. In the translation from business to operations strategy, all of the ambiguities and conflicts which can be buried within most businesses strategies will be exposed and definately will need to be resolved. Business strategies are painted in broad brushstrokes. They point the business within a general direction, but cannot spell out every piece of information; it is precisely what functional strategies are for. Operations strategy should take the typical thrust of commercial strategy and translate it into what it really path for the operation’s resources and processes. Put simply, exactly what is the clear correspondence involving the business along with your operations strategy? This implies making a strong, logical and explicit outcomes of all of the activities with the operation along with the business strategy where it operates. Besides this vertical logic from business to operations strategy, operations strategy also needs to be coherent with itself along with the strategies other functions pursue.
Outside-In: Operations must provide a position to the business in the markets
Operations is the supplier towards the markets. It will help establish and gaze after its desired market position by offering the degrees and services information, innovation and price that outclasses, or at best maintains with, competitors. The true secret question to inquire about needs to be, ‘how well do our operations conserve the business compete in the markets?’ While straightforward, the hitch is that the concepts, language and (to some extent) philosophy accustomed to help marketers understand investing arenas are not always useful in guiding operations. As a result descriptions of market needs often need ‘translating’ before they may be helpful to operations. The relationship between markets along with the operations that provide them isn’t merely a a few markets dictating how operations should behave. Customers will behave, at least partly, about how you (or perhaps your competitors) have treated them before. It usually is a two-way street involving the markets along with your operations.
Bottom-Up: Operations must get strategic advantage by studying under daily experience
Not every decisions which have long-term strategic importance come top-down from senior management. Important ideas can emerge from seemingly routine activities which occur within operations. A business can move around in a particular strategic direction since their on-going experience with serving customers with an operational level convinces them that it’s the right action to take, then a general consensus emerges, often in the operational amount of the organisation. Letting strategic ideas emerge from the operational amount of a company isn’t abdicating responsibility; it can be accepting extraordinary ideas can come from those who act on the sharp end. It will be a dereliction of duty if someone failed to try everything very easy to encourage good ideas from daily experience. Every action, every decision, every transaction made by your operation’s processes, is a chance to enhance existing knowledge.
Inside-Out: Operations must develop the strategic capabilities of the company’s resources and processes
The true secret question this is, ‘what can your operation accomplish that your competition can’t?’ Put simply, how do one’s operations bring something unique on the business’ capabilities? For too many businesses, the answer is it can’t. But even when one’s operation does not have unique capabilities, it ought to at least be striving to gain some form of advantage looking at the resources and processes. Thus, two further questions are relevant: what resources and processes needs to be leading to building capabilities? And: how will be the decisions which can be made within the operation leading to developing and supporting these capabilities? Try asking several questions with the so-called VRIO framework[i].
Do you have valuable operations capabilities?
Do you have rare operations capabilities?
Do you have operations capabilities which can be expensive for imitate?
Have you been organized to capture value of operations capabilities?
The inside-out part of operations strategy should try and make certain that resources and processes are valuable, rare, inimitable, which the procedure is organised to take advantage of them. Understand that each one of these situations are time dependent. A capability could possibly be valuable now, but competition is unlikely to square still.
[i]In, Barney, J. B. (1995). Looking Inside for Competitive Advantage. Academy of Management Executive, Vol. 9, Issue 4, pp. 49-61
About me: Nigel Slack is Emeritus Professor of Operations Management and Strategy at Warwick Business School along with the former head of the company’s Operations Management Group. He behaves as a consultant in several sectors, including Financial Services, Utilities, Retail, Professional Services, General Services, Aerospace, FMCG, and Engineering Manufacturing.
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