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Operations Strategy Management
Operations Strategy Management
Operations often comes second in strategic planning, treated as the mechanism for executing strategy, not an area needing strategic planning in its own right. However, in today's complex, global markets, neglecting operations strategy management is a costly mistake. Technology is constantly changing, supply chains evolve, and costs fluctuate. These changes affect your operations and are driven by a number of factors that are complex, but not unpredictable. Operations strategy management is the process of anticipating these changes and analysing them in the context of the direction of the company in order to forge a strategy to compete and lead in the market.
There are a large number of considerations and processes that fall under the umbrella of operations. Information technology and communications, supply chain and transportation, financial transactions and fulfillment and distribution are just some of the major factors that fall under operations strategy management. To achieve market leadership, a company must not only align its processes to execute its strategic goals, but pursue a strategy of creating and maintaining an operational edge in the market. Depending on the business, this can involve the constant pursuit of cost-efficient manufacturing, sourcing and logistics, a geographic structure that is most efficient financially, leading-edge communications technology and more.
When engaging in operations strategy management, companies need to start early, and get the operations organisation involved in strategy from the start. Product development, marketing, and other departments should not only keep operations in mind when considering feasibility in execution, but plan to leverage operational advantages from the beginning. The most efficient companies keep the entire supply chain and logistics process in mind when drafting plans for new products, and operations has input and priority in the product strategy.
Because so many companies treat operations as secondary, consultants are commonly used to bring operations strategy management to the forefront. Whether executed by an internal or external team, this type of project will clearly define the firm's core competencies and desired competencies, and identify the steps of the planing process in which operations input is key. Those steps are usually earlier rather than later!
Finally, experts in operations strategy management will be aware of the industry best practices, trends, and drivers of innovation. This type of forward-looking knowledge can be used to plan a company's operations, discover potential areas of competitive advantage, and integrating them into the corporate strategy. Once the initial process to integrate operations strategy has been set up, it's important to revisit it on a regular basis, and ensure that the operations organisation is not coasting or taking a back seat to the other departments when determining the direction of the company.
Gaining an operational advantage is much easier when operations is treated as a driver of corporate strategy, rather than simply the process by which it is executed. Opportunities for lower cost manufacturing, more efficient supply chains, faster distribution or more powerful information technology should be evaluated, integrated into a company's overall strategy, and seized to capture market share and bottom-line growth.
