by An operations strategy is a set of decisions an organization makes regarding the production and delivery of its goods. Organizations may consider each step they take toward manufacturing or delivering a product an operation, and all decisions regarding these various operations are the operations strategy. An organization’s operations strategy works in tandem with its overall business strategy, helping the organization to achieve its long-term goals and improve competitiveness in the marketplace.
Benefits of having an operations strategy
Employee efficiency
Operations strategies define the goals of different departments, which lets team managers and employees know what they are working toward. An operations strategy can help to ensure any employee that contributes to an operation uses their time and skills efficiently. In addition, organization leaders can learn which departments are operating efficiently and which may need improvement.
Resource Management
Organizations often have a finite number of resources, making it essential that they use them efficiently. Operations strategies can help leaders determine which areas of the organization need the most resources and how to best deliver those resources. By developing an operations strategy, leaders can learn more about the costs of running different departments. They can then analyze these costs and see if they are in line with the organization’s overall goals.
Department cooperation
An operations strategy details how multiple departments within an organization work together. By outlining this coordination, each department knows how it relates to the others. They can also see how their individual department’s goals are helping to achieve the overall goals of the organization alongside the other departments. This is useful for improving decision-making and helping employees in different departments feel like they are on the same team.
Elements of an operations strategy
Products and assembly
Product operations managers look to streamline processes, such as team communication or product assembly. They also analyze data regarding their products and use it to prioritize tasks. For example, they may help product managers decide which elements of a product to build first. Product operations teams work with departments such as manufacturing, customer support and sales to help optimize the process consumers go through with the product, from researching to becoming repeat customers.
Delivering and storing inventory
An inventory operations strategy is one that helps businesses decide how to order, maintain and process their inventory. It looks for more efficient ways to deliver or store inventory, with the goal of reducing costs and waste. An inventory operations strategy also aims to order the optimal number of goods, maximizing storage capacity without wasting resources.
Supply chain optimization
The supply chain element of an operations strategy looks for ways to optimize the movement of products from suppliers to distributors. It may do this in several ways, for example, implementing faster communication technology or optimizing shipping amounts. In a supply chain operations strategy, leaders decide on the structure of the supply chain and the activities of each stage. They also decide where to make products and where to store them.
Quality of the final product
Quality operations aim to produce a satisfactory final product. This includes product testing and analyzing customer feedback. They also check for consistency so their customers all receive the same level of quality. In addition, quality operations managers analyze the operations that contribute to production. For example, they ensure the organization is using the best materials for a high-quality finished product. They constantly monitor the production process to ensure it is leading to their desired quality outcomes.
Scheduling use of resources
Scheduling is the timing and use of resources, and this means ensuring the organization is using its resources at the best possible time. This may include the best time to send out shipments of products or which activities employees should focus on first.
Scheduling is the timing and use of resources, and this means ensuring the organization is using its resources at the best possible time. This may include the best time to send out shipments of products or which activities employees should focus on first.
Facilities management
Facilities planning and management is the analysis of how the organization’s current facilities factor into the organization’s goals. This part of your operations strategy determines if your current facilities are performing as needed. In addition, it also discovers if your organization needs new facilities and if so, it conducts a search to find the right ones.
Forecasting for planning
Forecasting operations is where an organization makes plans for the future. It uses data to make assumptions about the future of the organization. For example, it may study current sales trends to determine profits in a year. It then implements changes within the organization to ensure it is always moving toward its goals. For example, if a forecaster determines a drop in sales because of economic factors that may happen in six months, they may look for ways to reduce costs now to prepare them for this situation.
Levels of Decisions
Strategic decisions:
Strategic decisions are major choices of actions and influence whole or a major part of business enterprise. They contribute directly to the achievement of common goals of the enterprise. They have long-term implications on the business enterprise.
They may involve major departures from practices and procedures being followed earlier. Generally, strategic decision is unstructured and thus, a manager has to apply his business judgement, evaluation and intuition into the definition of the problem. These decisions are based on partial knowledge of the environmental factors which are uncertain and dynamic. Such decisions are taken at the higher level of management.
Operational decisions:
These decisions relate to day-to-day operations of the enterprise. They have a short-term horizon as they are taken repetitively. These decisions are based on facts regarding the events and do not require much of business judgement. Operational decisions are taken at lower levels of management. As the information is needed for helping the manager to take rational, well informed decisions, information systems need to focus on the process of managerial decision making.
Tactical decisions:
These decisions relate to the implementation of strategic decisions. They are directed towards developing divisional plans, structuring workflows, establishing distribution channels, acquisition of resources such as men, materials and money. These decisions are taken at the middle level of management.
