Nigel Slack, author with the Operations Advantage, discusses several methods to gain a successful operations strategy
There’s a common misunderstanding about operations strategy: it serves to try the decisions passed down by whoever is formulating business strategy. Although implementing business strategy top-down is one important role of operations strategy, it is just among four elements that must be present if any operations strategy is to work. These factors are illustrated inside the diagram below.

Each of these elements is really a necessary condition to build up a really strategic operation. These four elements (or perspectives) on operations strategy are discussed in greater 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 Cheap Operations management Books coming from a business strategy won’t be a straightforward planning activity. In the translation from business to operations strategy, every one of the ambiguities and conflicts which can be buried within most businesses strategies is going to be exposed and will need to be resolved. Business strategies are painted in broad brushstrokes. They point the business enterprise in a general direction, but cannot disclose everything; that is what functional strategies are for. Operations strategy must take the general thrust of economic strategy and translate it into what it really means for the operation’s resources and operations. To put it differently, exactly what is the clear correspondence involving the business and your operations strategy? This means creating a strong, logical and explicit outcomes of every one of the activities with the operation and the business strategy that operates. Besides this vertical logic from business to operations strategy, operations strategy must also be coherent with itself and the strategies other functions pursue.

Outside-In: Operations must give a position to the business in the markets

Operations will be the supplier towards the markets. It will help establish and maintain its desired market position through providing the degrees of service, innovation and expense that outclasses, at least maintains with, competitors. The main element question must must be, ‘how well do our operations help the business compete in the markets?’ While straightforward, the hitch is the concepts, language and (to some extent) philosophy accustomed 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 may be beneficial to operations. The partnership between markets and the operations that serve them isn’t simply a a few markets dictating how operations should behave. Customers will behave, a minimum of partly, on what you (or your competitors) have treated them during the past. It is usually a two-way street involving the markets and your operations.

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

Its not all decisions who have long-term strategic importance come top-down from senior management. Important ideas can leave seemingly routine activities which happen within operations. A company can transfer a specific strategic direction since their on-going example of serving customers at an operational level convinces them that it’s the right move to make, then a general consensus emerges, often from your operational amount of the organisation. Letting strategic ideas leave the operational amount of a business isn’t abdicating responsibility; it is accepting that great ideas may come from those who work on the sharp end. It might be a dereliction of duty if a person didn’t you must do everything simple to encourage plans from daily experience. Every action, every decision, every transaction made by your operation’s processes, is a chance to add to existing knowledge.

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

The main element question here’s, ‘what can your operation do this your competitors can’t?’ To put it differently, just how can one’s operations bring something unique for the business’ capabilities? For lots of businesses, the solution is it can’t. But even if one’s operation doesn’t have a unique capabilities, it must a minimum of be striving to gain some type of advantage by reviewing the resources and operations. Thus, two further questions are relevant: what resources and operations must be adding to building capabilities? And: how are the decisions which can be made inside operation adding to developing and supporting these capabilities? Try asking several questions with the so-called VRIO framework[i].

Do you have valuable operations capabilities?
Do you have rare operations capabilities?
Do you have operations capabilities which can be expensive to imitate?
Do you think you’re organized to capture the value of operations capabilities?
The inside-out component of operations strategy should attempt to ensure that resources and operations are valuable, rare, inimitable, understanding that the operation is organised to take advantage of them. Understand that these situations are 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 the author: Nigel Slack is Emeritus Professor of Operations Management and Strategy at Warwick Business School and the former head of the Operations Management Group. He acts as a consultant in numerous sectors, including Financial Services, Utilities, Retail, Expertise, General Services, Aerospace, FMCG, and Engineering Manufacturing.
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