Nigel Slack, author from the Operations Advantage, discusses some solutions to have a successful operations strategy
There exists a common misunderstanding about operations strategy: which it serves to employ the decisions handed down by whoever is formulating business strategy. Although implementing business strategy top-down is certainly one important role of operations strategy, it is only one among four elements that has to be present if any operations technique is in order to work. These components are illustrated in the diagram below.

All these elements is really a necessary condition to develop a totally strategic operation. These four elements (or perspectives) on operations strategy are discussed at length 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 will not be a basic planning activity. Through the translation from business to operations strategy, all the ambiguities and conflicts which are buried within most businesses strategies will probably be exposed and definately will need to be resolved. Business strategies are painted in broad brushstrokes. They point the organization within a general direction, but cannot explain everything; that maybe what functional strategies are for. Operations strategy must take the overall thrust of business strategy and translate it into just what it opportinity for the operation’s resources and procedures. Quite simply, it is possible to clear correspondence between your business along with your operations strategy? This implies setting up a strong, logical and explicit link between all the activities from the operation and the business strategy that operates. Besides this vertical logic from business to operations strategy, operations strategy also needs to be coherent with itself and the strategies other functions pursue.

Outside-In: Operations must supply a position for that business in the markets

Operations could be the supplier to its markets. It ought to help establish and look after its desired market position through providing the degrees and services information, innovation and cost that outclasses, at least keeps up with, competitors. The important thing question to question needs to be, ‘how well do our operations help the business compete in the markets?’ While straightforward, the hitch would be that the concepts, language and (to some degree) philosophy used to help marketers understand finance industry is not always useful in guiding operations. This means that descriptions of market needs often need ‘translating’ before they may be necessary to operations. The relationship between markets and the operations that serve them isn’t just a few markets dictating how operations should behave. Customers will behave, at least partly, on how you (or maybe your competitors) have treated them before. It usually is a two-way street between your markets along with your operations.

Bottom-Up: Operations must get strategic advantage by studying under daily experience

Don’t assume all decisions which have long-term strategic importance come top-down from senior management. Important ideas can leave seemingly routine activities that happen within operations. A company can move in a selected strategic direction his or her on-going experience of serving customers with an operational level convinces them that it’s the right thing to do, then a general consensus emerges, often in the operational level of the organisation. Letting strategic ideas leave the operational level of a business isn’t abdicating responsibility; it can be accepting that great ideas will come from people who work at the sharp end. It might be a dereliction of duty if a person didn’t do everything easy to encourage plans from daily experience. Every action, every decision, every transaction produced by your operation’s processes, is a chance to add to existing knowledge.

Inside-Out: Operations must develop the strategic capabilities of the resources and procedures

The important thing question the following is, ‘what can your operation accomplish that the competitors can’t?’ Quite simply, just how do one’s operations bring something unique for the business’ capabilities? For a lot of businesses, the answer then is which it can’t. But even when one’s operation doesn’t have any unique capabilities, it ought to at least be striving to realize some sort of advantage from its resources and procedures. Thus, two further questions are relevant: what resources and procedures needs to be causing building capabilities? And: how would be the decisions which are made from the operation causing developing and supporting these capabilities? Try asking some questions from the so-called VRIO framework[i].

Have you got valuable operations capabilities?
Have you got rare operations capabilities?
Have you got operations capabilities which are costly to imitate?
Are you currently organized to capture value of operations capabilities?
The inside-out element of operations strategy should try to be sure that resources and procedures are valuable, rare, inimitable, and that the operation is organised to exploit them. Do not forget that all these everything is time dependent. A capability might be valuable now, but competitors are not going 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 and the former head of the Operations Management Group. He behaves as a consultant in lots of sectors, including Financial Services, Utilities, Retail, Expertise, General Services, Aerospace, FMCG, and Engineering Manufacturing.
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