Nigel Slack, author from the Operations Advantage, discusses the 4 ways to acquire a successful operations strategy
There is a common misunderstanding about operations strategy: it serves to implement the decisions handed down by whoever is formulating business strategy. Although implementing business strategy top-down is one natural part of operations strategy, it is just among four factors that should be present or no operations strategy is to work. These components are illustrated in the diagram below.

These elements can be a necessary condition to formulate a really 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 should be aligned with business strategy and pull in the same strategic direction. Deriving an Buy Operations management Books from a business strategy will never be a straightforward planning activity. In the translation from business to operations strategy, all the ambiguities and conflicts that are buried within most businesses strategies will likely be exposed and can need to be resolved. Business strategies are painted in broad brushstrokes. They point the company in a general direction, but cannot explain every piece of information; it is exactly what functional strategies are for. Operations strategy must take the general thrust of economic strategy and translate it into just what it method for the operation’s resources and processes. Quite simply, is there a clear correspondence relating to the business and your operations strategy? This means creating a strong, logical and explicit eating habits study all the activities in the operation and the business strategy that it operates. Besides this vertical logic from business to operations strategy, operations strategy should also be coherent with itself and the strategies other functions pursue.

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

Operations may be the supplier to the markets. It will help establish and keep its desired market position by giving the degree of service, innovation and cost that outclasses, or at least keeps up with, competitors. The main element question to inquire about needs to be, ‘how well do our operations assist the business compete in the markets?’ While straightforward, the hitch is that the concepts, language and (to some degree) philosophy used to help marketers understand financial markets are not always useful in guiding operations. Consequently descriptions of market needs often need ‘translating’ before they could be helpful to operations. Their bond between markets and the operations that provide them isn’t merely a matter of markets dictating how operations should behave. Customers will behave, no less than partly, on what you (or maybe your competitors) have treated them in the past. It usually is a two-way street relating to the markets and your operations.

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

Its not all decisions that have long-term strategic importance come top-down from senior management. Important ideas can emerge from seemingly routine activities that occur within operations. A business can relocate a certain strategic direction because their on-going experience with serving customers within an operational level convinces them that it’s the right move to make, then this general consensus emerges, often through the operational degree of the organisation. Letting strategic ideas emerge from the operational degree of an enterprise isn’t abdicating responsibility; it really is accepting exceptional ideas may come from those that just work at the sharp end. It will be a dereliction of duty if someone would not you must do everything simple to encourage guidelines from daily experience. Every action, every decision, every transaction created by your operation’s processes, is a chance to add to existing knowledge.

Inside-Out: Operations must provide the strategic capabilities of the company’s resources and processes

The main element question this is, ‘what can your operation accomplish that the competitors can’t?’ Quite simply, just how can one’s operations bring something unique for the business’ capabilities? For lots of businesses, the answer is it can’t. But regardless of whether one’s operation doesn’t have any unique capabilities, it should no less than be striving to gain some sort of advantage by reviewing the resources and processes. Thus, two further questions are relevant: what resources and processes needs to be adding to building capabilities? And: how include 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].

Are there valuable operations capabilities?
Are there rare operations capabilities?
Are there operations capabilities that are expensive for imitate?
Are you currently organized to capture the value of operations capabilities?
The inside-out portion of operations strategy should attempt to make sure that resources and processes are valuable, rare, inimitable, and that the operation is organised to take advantage of them. Understand that each one of these the situation is time dependent. A capability may be valuable now, but competition is unlikely 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

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 lots of sectors, including Financial Services, Utilities, Retail, Professional Services, General Services, Aerospace, FMCG, and Engineering Manufacturing.
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