Operations Strategy
Operations strategy is a guiding principle used to plan analyze and execute a
company’s operations Businesses use operations strategies to identify and
implement cost effective processes for creating and distributing products and
services An operations strategy supports a company’s overall business strategy in
order to maximize profits
Key Elements of an Operations Strategy
There are a few key elements that go into a company’s operations strategy
Production system An organization’s production system determines the
short term and long term planning for how resources are turned into marketable
products and services A comprehensive production system includes clear work
flows quality control benchmarks and supply chain management strategies
Facilities A company’s operational capabilities are influenced by the size and
number of production facilities To function properly specific facilities require
achievable production goals clear safety procedures and inventory management
systems
Product or service One of the most important elements of any operations
strategy is the quality management of a product or service Businesses analyze the
lifecycle of their products and services in order to predict market trends adjust
their product or service and allocate resources to new service development and
product development
Technology Operations strategy increasingly depends on new technological
developments like machine learning production line automation real time metrics
and market forecasting tools
Resources A comprehensive overall strategy for operations takes into account
the total operations resources available to an organization including locational
mechanical and human resources
Types of Operations Strategies
Businesses employ different types of operations strategies based on their specific
market needs
Core competency strategies Core competency operations strategies revolve
around the main strengths of a company’s business model By identifying the best
core business processes within an organization core competency operations
strategies focus on leveraging existing strengths to maximize profitability
Corporate strategies This type of operations strategy adheres to a company’s
mission statement and aligns itself to a larger corporate strategy Businesses using
this type of operations strategy develop production initiatives key performance
indicators KPIs and decision making processes based on an overall strategic
plan determined by company leaders and stakeholders
Competitive strategies Companies using this type of strategy develop their
operations processes in order to distinguish their product or service from
competitors By identifying competitive priorities within a specific economy
businesses can change their operations strategy to move toward a competitive
advantage whether that’s a higher quality product or a faster lead time during
production
Product or service strategies This type of operations strategy revolves around
the quality control of existing products or services as well as the development of
new products and services Businesses using this model often determine their
operations strategies based on the research and ideas from product managers
Customer driven strategies Organizations using customer driven strategies
make operations decisions based on the customer experience This type of
operations strategy aligns with sales and marketing strategies to manage and fulfill
customer expectations
Example of Operations Strategy
A furniture retailer deciding to change its manufacturing strategy by outsourcing
production to an automated facility By using new technological resources this
hypothetical furniture company can manage its supply chain better and create
products faster to improve its competitive position