Nigel Slack, author of The Operations Advantage, discusses the 4 techniques to gain a successful operations strategy
You will find there’s common misunderstanding about operations strategy: it serves to employ the decisions handed down by whoever is formulating business strategy. Although implementing business strategy top-down is a part of operations strategy, it is simply one of four elements that have to be present or no operations method is to function. These 4 elements are illustrated within the diagram below.

All these elements is really a necessary condition to develop a very strategic operation. These four elements (or perspectives) on operations strategy are discussed in detail below.

Top-Down: Operations must directly reflect the business’ overall strategy

Operations is a amongst many functions that should be aligned with business strategy and pull within the same strategic direction. Deriving an Operations management Books Online from the business strategy are not an easy planning activity. In the translation from business to operations strategy, all of the ambiguities and conflicts which are buried within most businesses strategies will be exposed and definately will must be resolved. Business strategies are painted in broad brushstrokes. They point the company in a general direction, but cannot show every detail; it is precisely what functional strategies are suitable for. Operations strategy should take the general thrust of business strategy and translate it into what it means for the operation’s resources and procedures. In other words, exactly what is the clear correspondence between business as well as your operations strategy? What this means is setting up a strong, logical and explicit eating habits study all of the activities of the operation along with the business strategy that it operates. Besides this vertical logic from business to operations strategy, operations strategy also needs to be coherent with itself along with the strategies other functions pursue.

Outside-In: Operations must give you a position for your business in its markets

Operations may be the supplier to the markets. It will help establish and gaze after its desired market position by providing the degrees of service, innovation and expense that outclasses, or at least maintains with, competitors. The key question to question must be, ‘how well do our operations profit the business compete in its markets?’ While straightforward, the hitch is that the concepts, language and (at some level) philosophy used to help marketers understand financial markets are not necessarily useful in guiding operations. As a result descriptions of market needs often need ‘translating’ before they can be beneficial to operations. The partnership between markets along with the operations that provide them isn’t just a matter of markets dictating how operations should behave. Customers will behave, a minimum of partly, on what you (or maybe your competitors) have treated them in the past. It is usually a two-way street between markets as well as your operations.

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

Not every 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 small business can transfer a specific strategic direction as their on-going experience of serving customers within an operational level convinces them that it is the right move to make, then this general consensus emerges, often from the operational degree of the organisation. Letting strategic ideas leave the operational degree of a business isn’t abdicating responsibility; it is accepting extraordinary ideas will come from people who just work at the sharp end. It will be a dereliction of duty if a person would not do everything very easy to encourage ideas 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 get the strategic capabilities of the resources and procedures

The key question the following is, ‘what can your operation do that your competition can’t?’ In other words, just how do one’s operations bring something unique to the business’ capabilities? For a lot of businesses, the reply is it can’t. But even when one’s operation does not have any unique capabilities, it will a minimum of be striving to gain some kind of advantage from the resources and procedures. Thus, two further questions are relevant: what resources and procedures must be contributing to building capabilities? And: how are the decisions which are made inside the operation contributing to developing and supporting these capabilities? Try asking the 4 questions of the so-called VRIO framework[i].

Are there valuable operations capabilities?
Are there rare operations capabilities?
Are there operations capabilities which are expensive to imitate?
Do you think you’re organized to capture the value of operations capabilities?
The inside-out component of operations strategy should try and make certain that resources and procedures are valuable, rare, inimitable, understanding that the operation is organised to use them. Keep in mind that these situations are time dependent. A capability could possibly be valuable now, but competition is not likely 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

The author: Nigel Slack is Emeritus Professor of Operations Management and Strategy at Warwick Business School along with the former head of the Operations Management Group. He provides for a consultant in several sectors, including Financial Services, Utilities, Retail, Services, General Services, Aerospace, FMCG, and Engineering Manufacturing.
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