Nigel Slack, author of The Operations Advantage, discusses the 4 methods to gain a successful operations strategy
There exists a common misunderstanding about operations strategy: who’s serves to employ the choices passed on by whoever is formulating business strategy. Although implementing business strategy top-down is but one important role of operations strategy, it is only among four elements that must be present or no operations approach is to function. These elements are illustrated in the diagram below.
Each of these elements is really a necessary condition to formulate 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 but one amongst many functions that should be aligned with business strategy and pull in the same strategic direction. Deriving an Buy Operations management Books from a business strategy are not a basic planning activity. In the translation from business to operations strategy, all the ambiguities and conflicts which can be buried within most businesses strategies will probably be exposed and may have to be resolved. Business strategies are painted in broad brushstrokes. They point the company in a general direction, but cannot show every detail; that maybe what functional strategies are suitable for. Operations strategy should take the thrust of economic strategy and translate it into exactly what it method for the operation’s resources and operations. Quite simply, is there a clear correspondence relating to the business plus your operations strategy? This implies setting up a strong, logical and explicit link between all the activities of the operation and 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 the strategies other functions pursue.
Outside-In: Operations must provide a position for the business in their markets
Operations could be the supplier to the markets. It ought to help establish and keep its desired market position through providing the amount and services information, innovation and price that outclasses, or at best keeps up with, competitors. The true secret question must should be, ‘how well do our operations profit the business compete in their markets?’ While straightforward, the hitch could be that the concepts, language and (somewhat) philosophy accustomed to help marketers understand investing arenas are not invariably valuable in guiding operations. This means that descriptions of market needs often need ‘translating’ before they are often helpful to operations. Their bond between markets and the operations that serve them isn’t only a a few markets dictating how operations should behave. Customers will behave, at the very least partly, on how you (or maybe your competitors) have treated them previously. It is always a two-way street relating to the markets plus your operations.
Bottom-Up: Operations must get strategic advantage by studying under daily experience
Not every decisions which may have long-term strategic importance come top-down from senior management. Important ideas can leave seemingly routine activities which happen within operations. A business can transfer a particular strategic direction because their on-going example of serving customers with an operational level convinces them that it is the right thing to do, then this general consensus emerges, often from your operational amount of the organisation. Letting strategic ideas leave the operational amount of a company isn’t abdicating responsibility; it really is accepting that great ideas comes from those who just work at the sharp end. It could be a dereliction of duty if an individual did not fit everything in possible to encourage guidelines 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 provide the strategic capabilities of the company’s resources and operations
The true secret question the following is, ‘what can your operation make it happen the competitors can’t?’ Quite simply, just how do one’s operations bring something unique on the business’ capabilities? For a lot of businesses, the answer is who’s can’t. But regardless of whether one’s operation does not have unique capabilities, it ought to at the very least be striving to gain some kind of advantage by reviewing the resources and operations. Thus, two further questions are relevant: what resources and operations should be causing building capabilities? And: how will be the decisions which can be made within the operation causing developing and supporting these capabilities? Try asking the 4 questions of 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?
Have you been organized to capture the need for operations capabilities?
The inside-out part of operations strategy should attempt to ensure that resources and operations are valuable, rare, inimitable, knowning that the procedure is organised to use them. Do not forget that all these everything is time dependent. A capability may be valuable now, but competitors are 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
The author: Nigel Slack is Emeritus Professor of Operations Management and Strategy at Warwick Business School and the former head of the company’s Operations Management Group. He behaves as a consultant in numerous sectors, including Financial Services, Utilities, Retail, Services, General Services, Aerospace, FMCG, and Engineering Manufacturing.
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