Nigel Slack, author in the Operations Advantage, discusses the 4 ways to acquire a successful operations strategy
There exists a common misunderstanding about operations strategy: which it serves to apply the selections transferred by whoever is formulating business strategy. Although implementing business strategy top-down is certainly one part of operations strategy, it is merely certainly one of four factors that must be present or no operations technique is to function. These elements are illustrated from the diagram below.
These elements is a necessary condition to produce a really strategic operation. These four elements (or perspectives) on operations strategy are discussed in more detail below.
Top-Down: Operations must directly reflect the business’ overall strategy
Operations is certainly one amongst many functions that need to be aligned with business strategy and pull from the same strategic direction. Deriving an Kogan Page Operations management Books from your business strategy won’t be an easy planning activity. In 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 definately will should be resolved. Business strategies are painted in broad brushstrokes. They point the business enterprise in a general direction, but cannot disclose every detail; that is what functional strategies are suitable for. Operations strategy should take the typical thrust of economic strategy and translate it into what it opportinity for the operation’s resources and operations. Put simply, exactly what is the clear correspondence involving the business along with your operations strategy? Therefore making a strong, logical and explicit link between each of the activities from the operation along with the business strategy in which it operates. Besides this vertical logic from business to operations strategy, operations strategy also need to be coherent with itself along with the strategies other functions pursue.
Outside-In: Operations must give you a position for your business in the markets
Operations will be the supplier to the markets. It should help establish and keep its desired market position through providing the levels and services information, innovation and price that outclasses, or at least maintains with, competitors. The true secret question to inquire about needs to be, ‘how well do our operations help the business compete in the markets?’ While straightforward, the hitch is that the concepts, language and (at some level) philosophy used 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 could be necessary to operations. The relationship between markets along with the operations that provide them isn’t only a a few markets dictating how operations should behave. Customers will behave, a minimum of partly, on how you (or perhaps your competitors) have treated them before. It is always a two-way street involving the markets along with your operations.
Bottom-Up: Operations must get strategic advantage by gaining knowledge from daily experience
Its not all decisions which have long-term strategic importance come top-down from senior management. Important ideas can emerge from seemingly routine activities which happen within operations. An enterprise can move around in a specific strategic direction his or her on-going experience of serving customers with an operational level convinces them that it’s the right action to take, then the general consensus emerges, often in the operational level of the organisation. Letting strategic ideas emerge from the operational level of a business isn’t abdicating responsibility; it can be accepting that extraordinary ideas will come from people that just work at the sharp end. It might be a dereliction of duty if one failed to you must do everything easy to encourage ideas from daily experience. Every action, every decision, every transaction created by your operation’s processes, is an opportunity to add to existing knowledge.
Inside-Out: Operations must provide the strategic capabilities of its resources and operations
The true secret question this is, ‘what can your operation make it happen the competitors can’t?’ Put simply, just how do one’s operations bring something unique to the business’ capabilities? For a lot of businesses, the answer is which it can’t. But even if one’s operation doesn’t have a unique capabilities, it ought to a minimum of be striving to realize some form of advantage from the resources and operations. Thus, two further questions are relevant: what resources and operations needs to be adding to building capabilities? And: how would be the decisions that are made inside operation adding to developing and supporting these capabilities? Try asking the 4 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?
Are you organized to capture value of operations capabilities?
The inside-out element of operations strategy should attempt to be sure that resources and operations are valuable, rare, inimitable, which the operation is organised to take advantage of them. Keep in mind that each one of these things are time dependent. A capability could be valuable now, but competition is not going to stand 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 writer: Nigel Slack is Emeritus Professor of Operations Management and Strategy at Warwick Business School along with the former head of its Operations Management Group. He provides for a consultant in several sectors, including Financial Services, Utilities, Retail, Expertise, General Services, Aerospace, FMCG, and Engineering Manufacturing.
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