Nigel Slack, author in the Operations Advantage, discusses some ways to have a successful operations strategy
There is a common misunderstanding about operations strategy: that it serves to apply the selections handed down by whoever is formulating business strategy. Although implementing business strategy top-down is certainly one part of operations strategy, it is simply certainly one of four elements that have to be present if any operations technique is in order to work. These components are illustrated in the diagram below.
These elements is a necessary condition to develop 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 should be aligned with business strategy and pull in the same strategic direction. Deriving an Kogan Page Operations management Books from a business strategy won’t be a straightforward planning activity. Throughout the translation from business to operations strategy, every one of the ambiguities and conflicts which might be buried within most businesses strategies will likely be exposed and can have to be resolved. Business strategies are painted in broad brushstrokes. They point the organization inside a general direction, but cannot explain every detail; it is exactly what functional strategies are for. Operations strategy should take the thrust of business strategy and translate it into exactly what it means for the operation’s resources and procedures. Quite simply, is there a clear correspondence relating to the business as well as your operations strategy? This implies making a strong, logical and explicit outcomes of every one of the activities with the operation and also the business strategy that it operates. Besides this vertical logic from business to operations strategy, operations strategy also need to be coherent with itself and also the strategies other functions pursue.
Outside-In: Operations must give you a position to the business in the markets
Operations will be the supplier for the markets. It should help establish and gaze after its desired market position by giving the levels and services information, innovation and cost that outclasses, at least keeps up with, competitors. The main element question to inquire about ought to be, ‘how well do our operations conserve the business compete in the markets?’ While straightforward, the hitch is that the concepts, language and (somewhat) philosophy utilized to help marketers understand investing arenas are not always beneficial in guiding operations. This means that descriptions of market needs often need ‘translating’ before they can be beneficial to operations. Their bond between markets and also the operations that provide them isn’t only a few markets dictating how operations should behave. Customers will behave, no less than partly, on what you (or your competitors) have treated them before. It will always be a two-way street relating to the markets as well as your operations.
Bottom-Up: Operations must get strategic advantage by gaining knowledge 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 that occur within operations. A company can move in a particular strategic direction his or her on-going experience of serving customers at an operational level convinces them that it is the right course of action, then a general consensus emerges, often from your operational amount of the organisation. Letting strategic ideas emerge from the operational amount of a small business isn’t abdicating responsibility; it can be accepting that great ideas comes from those that work on the sharp end. It might be a dereliction of duty if a person did not do everything simple to encourage ideas from daily experience. Every action, every decision, every transaction manufactured by your operation’s processes, is an opportunity to add to existing knowledge.
Inside-Out: Operations must enjoy the strategic capabilities of their resources and procedures
The main element question this is, ‘what can your operation do that your competition can’t?’ Quite simply, how can one’s operations bring something unique on the business’ capabilities? For lots of businesses, the reply is that it can’t. But even though one’s operation does not have any unique capabilities, it will no less than be striving to get some kind of advantage from its resources and procedures. Thus, two further questions are relevant: what resources and procedures ought to be contributing to building capabilities? And: how include the decisions which might be made inside the operation contributing to developing and supporting these capabilities? Try asking some questions with the so-called VRIO framework[i].
Are there valuable operations capabilities?
Are there rare operations capabilities?
Are there operations capabilities which might be costly to imitate?
Are you organized to capture the value of operations capabilities?
The inside-out portion of operations strategy should try and make certain that resources and procedures are valuable, rare, inimitable, understanding that the operation is organised to exploit them. Understand that every one of these the situation is time dependent. A capability might be valuable now, but competition is not going to face 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 and also the former head of their Operations Management Group. He acts as a consultant in many sectors, including Financial Services, Utilities, Retail, Professional Services, General Services, Aerospace, FMCG, and Engineering Manufacturing.
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