The Strategic Nature of Operations Management
– the difference between operations management and operations strategy
– the factors that influence operations strategy
– how to look at operations strategy from different perspectives
• However, operations can have real strategic impact. For example, many enterprises such as IKEA, Amazon, Toyota, and Zara have their operations resources as central to their long-term success.
• Earlier, we defined operations management as ’the activity of managing the resources and processes that produce and deliver goods and services’. Operations strategy is concerned more with the macro-level, long-term, aggregate decisions that build operational capabilities.
Enlarged version: http://bit.ly/2oQosp5
The main factors influencing Operations Strategy are:
• Current technology
• Current performance
• Personnel’s capabilities
Enlarged version: http://bit.ly/2p8J23n
”Operations strategy is the set of decisions that shape the long term capabilities of a company’s operations and their contribution to overall strategy through the ongoing reconciliation of market requirements and operations resources.”
This definition reflects the four perspectives on operations strategy:
• market requirements
• operations resources
Enlarged version: http://bit.ly/2nKAzSY
• An alternative view is that of the bottom-up approach, based on which one observes how strategy takes place in practice, thus shaping the strategy by learning from day-to-day experience.
Enlarged version: http://bit.ly/2p8MsTS
• An organization’s operations strategy must reflect the requirements of its markets.
• The starting point is understanding the customer needs, the organization’s market positioning and the competitor’s actions, in order to establish the performance objectives (we’ll explore this in the next lesson).
• On the other hand, the organization must build on its operations capabilities.
• Thus, the organization must understand its resources, capabilities and processes in order to be able to take the decisions that will allow it to meet its performance objectives.