Nigel Slack, author from the Operations Advantage, discusses the 4 ways to gain a successful operations strategy
There’s a common misunderstanding about operations strategy: which it serves to try the decisions transferred by whoever is formulating business strategy. Although implementing business strategy top-down is one part of operations strategy, it is just certainly one of four elements that have to be present or no operations approach is to be effective. These elements are illustrated within the diagram below.

Each one of these elements is a necessary condition to develop a truly 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 one amongst many functions that need to be aligned with business strategy and pull within the same strategic direction. Deriving an Buy Operations management Books coming from a business strategy are not a basic planning activity. Through the translation from business to operations strategy, each of the ambiguities and conflicts that are buried within most businesses strategies will probably be exposed and definately will have to be resolved. Business strategies are painted in broad brushstrokes. They point the organization in a general direction, but cannot show all the info; it is precisely what functional strategies are suitable for. Operations strategy should take the general thrust of economic strategy and translate it into exactly what it path for the operation’s resources and operations. In other words, is there a clear correspondence between business as well as your operations strategy? This means building a strong, logical and explicit link between each of the activities in the operation as well as the business strategy that it operates. Besides this vertical logic from business to operations strategy, operations strategy must also be coherent with itself as well as the strategies other functions pursue.

Outside-In: Operations must provide a position for that business in its markets

Operations may be the supplier towards the markets. It must help establish and gaze after its desired market position by providing the amount and services information, innovation and value that outclasses, or at least keeps up with, competitors. The key question to question should be, ‘how well do our operations assist the business compete in its markets?’ While straightforward, the hitch is the concepts, language and (to some extent) philosophy used to help marketers understand financial markets are not invariably attractive guiding operations. Consequently descriptions of market needs often need ‘translating’ before they could be necessary to operations. The connection between markets as well as the operations that provide them isn’t just a few markets dictating how operations should behave. Customers will behave, no less than partly, how you (or your competitors) have treated them before. It is always a two-way street between markets as well as your operations.

Bottom-Up: Operations must get strategic advantage by gaining knowledge from daily experience

Don’t assume all decisions which have long-term strategic importance come top-down from senior management. Important ideas can emerge from seemingly routine activities that happen within operations. An enterprise can move around in a certain strategic direction his or her on-going experience with serving customers at an operational level convinces them that it’s the right thing to do, then the general consensus emerges, often from your operational a higher level the organisation. Letting strategic ideas emerge from the operational a higher level a company isn’t abdicating responsibility; it really is accepting extraordinary ideas comes from those who just work at the sharp end. It might be a dereliction of duty if someone did not try everything very easy to encourage ideas from daily experience. Every action, every decision, every transaction manufactured by your operation’s processes, is an opportunity to enhance existing knowledge.

Inside-Out: Operations must enjoy the strategic capabilities of the resources and operations

The key question this is, ‘what can your operation do that your competition can’t?’ In other words, how can one’s operations bring something unique towards the business’ capabilities? For lots of businesses, the reply is which it can’t. But regardless of whether one’s operation does not have any unique capabilities, it should no less than be striving to gain some sort of advantage from its resources and operations. Thus, two further questions are relevant: what resources and operations should be adding to building capabilities? And: how would be the decisions that are made from the operation adding to developing and supporting these capabilities? Try asking the 4 questions in the so-called VRIO framework[i].

Have you got valuable operations capabilities?
Have you got rare operations capabilities?
Have you got operations capabilities that are expensive to imitate?
Are you organized to capture value of operations capabilities?
The inside-out part of operations strategy should attempt to make certain that resources and operations are valuable, rare, inimitable, and that the procedure is organised to exploit them. Do not forget that all these everything is time dependent. A capability could be valuable now, but competition is improbable 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 author: Nigel Slack is Emeritus Professor of Operations Management and Strategy at Warwick Business School as well as the former head of the Operations Management Group. He acts as a consultant in several sectors, including Financial Services, Utilities, Retail, Professional Services, General Services, Aerospace, FMCG, and Engineering Manufacturing.
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