Nigel Slack, author of The Operations Advantage, discusses the 4 ways to achieve a successful operations strategy
There’s a common misunderstanding about operations strategy: that it serves to employ the decisions passed on by whoever is formulating business strategy. Although implementing business strategy top-down is but one important role of operations strategy, it is simply certainly one of four elements that has to be present or no operations method is in order to work. These 4 elements are illustrated within the diagram below.

Each one of these elements can be a necessary condition to formulate a truly 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 but one amongst many functions that ought to be aligned with business strategy and pull within the same strategic direction. Deriving an Kogan Page Operations management Books from a business strategy will not 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 be exposed and will should be resolved. Business strategies are painted in broad brushstrokes. They point the company inside a general direction, but cannot spell out all the info; it is precisely what functional strategies are suitable for. Operations strategy should take the general thrust of commercial strategy and translate it into just what it means for the operation’s resources and processes. To put it differently, what is the clear correspondence between business and your operations strategy? This implies building a strong, logical and explicit eating habits study every one of the activities in the operation and the business strategy where 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 that business in their markets

Operations will be the supplier towards the markets. It ought to help establish and look after its desired market position by giving the amount and services information, innovation and value that outclasses, or otherwise maintains with, competitors. The important thing question to inquire about should be, ‘how well do our operations help the business compete in their markets?’ While straightforward, the hitch is the concepts, language and (at some level) philosophy accustomed to help marketers understand investing arenas are not at all times attractive guiding operations. As a result descriptions of market needs often need ‘translating’ before they could be helpful 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, a minimum of partly, on what you (or perhaps your competitors) have treated them during the past. It is always a two-way street between markets and your operations.

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

Not all decisions which may have long-term strategic importance come top-down from senior management. Important ideas can emerge from seemingly routine activities which occur within operations. A business can move around in a certain strategic direction as their on-going experience of serving customers within an operational level convinces them that it is the right course of action, then a general consensus emerges, often from your operational a higher level the organisation. Letting strategic ideas emerge from the operational a higher level a business isn’t abdicating responsibility; it is accepting exceptional ideas comes from those that work on the sharp end. It would be a dereliction of duty if an individual failed to try everything simple to encourage good 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 develop the strategic capabilities of the company’s resources and processes

The important thing question here’s, ‘what can your operation make it happen your competitors can’t?’ To put it differently, how can one’s operations bring something unique towards the business’ capabilities? For too many businesses, the reply is that it can’t. But even if one’s operation does not have unique capabilities, it ought to a minimum of be striving to achieve some form of advantage from its resources and processes. Thus, two further questions are relevant: what resources and processes should be contributing to building capabilities? And: how include the decisions which might be made from the operation contributing to developing and supporting these capabilities? Try asking the 4 questions in the so-called VRIO framework[i].

Are you experiencing valuable operations capabilities?
Are you experiencing rare operations capabilities?
Are you experiencing operations capabilities which might be costly to imitate?
Have you been organized to capture the value of operations capabilities?
The inside-out element of operations strategy should make an effort to make sure that resources and processes are valuable, rare, inimitable, knowning that the procedure is organised to take advantage of them. Understand that each one of these situations are time dependent. A capability could possibly be valuable now, but competitors are unlikely 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 the writer: 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 lots of sectors, including Financial Services, Utilities, Retail, Expertise, General Services, Aerospace, FMCG, and Engineering Manufacturing.
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