Nigel Slack, author in the Operations Advantage, discusses the four techniques to have a successful operations strategy
There’s a common misunderstanding about operations strategy: who’s serves to apply the choices passed on by whoever is formulating business strategy. Although implementing business strategy top-down is one natural part of operations strategy, it is simply one of four factors that should be present if any operations technique is to work. These 4 elements are illustrated inside the diagram below.
Each one of these elements is often a necessary condition to develop a truly 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 one amongst many functions that need to be aligned with business strategy and pull inside the same strategic direction. Deriving an Buy Operations management Books from the business strategy are not a basic planning activity. During the translation from business to operations strategy, each of the ambiguities and conflicts that are buried within most businesses strategies will likely be exposed and will should be resolved. Business strategies are painted in broad brushstrokes. They point the organization in a general direction, but cannot explain every detail; it is precisely what functional strategies are suitable for. Operations strategy must take the typical thrust of commercial strategy and translate it into what it path for the operation’s resources and processes. Put simply, what is the clear correspondence involving the business and your operations strategy? What this means is making a strong, logical and explicit link between each of the activities from the operation along with the business strategy that operates. Besides this vertical logic from business to operations strategy, operations strategy should also be coherent with itself along with the strategies other functions pursue.
Outside-In: Operations must supply a position for the business in the markets
Operations may be the supplier for the markets. It will help establish and keep its desired market position through providing the amount and services information, innovation and price that outclasses, or otherwise maintains with, competitors. The true secret question to ask should be, ‘how well do our operations help the business compete in the markets?’ While straightforward, the hitch is that the concepts, language and (somewhat) philosophy accustomed to help marketers understand investing arenas are not invariably useful in guiding operations. This means that descriptions of market needs often need ‘translating’ before they may be helpful to operations. The relationship between markets along with the operations that serve them isn’t only a couple of markets dictating how operations should behave. Customers will behave, no less than partly, on what you (or perhaps your competitors) have treated them previously. It is always a two-way street involving the markets and your operations.
Bottom-Up: Operations must get strategic advantage by learning from daily experience
Not all decisions who have long-term strategic importance come top-down from senior management. Important ideas can emerge from seemingly routine activities which occur within operations. A company can move around in a specific strategic direction as their on-going experience of serving customers within an operational level convinces them that it’s the right thing to do, a general consensus emerges, often from the operational level of the organisation. Letting strategic ideas emerge from the operational level of a company isn’t abdicating responsibility; it’s accepting that great ideas comes from people that act on the sharp end. It could be a dereliction of duty if an individual didn’t try everything very easy to encourage ideas from daily experience. Every action, every decision, every transaction created by your operation’s processes, is an opportunity to include in existing knowledge.
Inside-Out: Operations must develop the strategic capabilities of their resources and processes
The true secret question this is, ‘what can your operation make it happen the competitors can’t?’ Put simply, how do one’s operations bring something unique on the business’ capabilities? For way too many businesses, the solution is who’s can’t. But even when one’s operation doesn’t have a unique capabilities, it must no less than be striving to get some sort of advantage by reviewing the resources and processes. Thus, two further questions are relevant: what resources and processes should be causing building capabilities? And: how are the decisions that are made from the operation causing developing and supporting these capabilities? Try asking the four questions from the so-called VRIO framework[i].
Are you experiencing valuable operations capabilities?
Are you experiencing rare operations capabilities?
Are you experiencing operations capabilities that are expensive to imitate?
Have you been organized to capture the need for operations capabilities?
The inside-out part of operations strategy should make an effort to ensure that resources and processes are valuable, rare, inimitable, which the procedure is organised to exploit them. Understand that every one of these everything is time dependent. A capability could be valuable now, but competitors are improbable 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 the author: Nigel Slack is Emeritus Professor of Operations Management and Strategy at Warwick Business School along with the former head of their Operations Management Group. He provides a consultant in lots of sectors, including Financial Services, Utilities, Retail, Professional Services, General Services, Aerospace, FMCG, and Engineering Manufacturing.
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