Operations Strategy

Businesses that produce goods and services often rely on a system that optimizes the use of resources, people and processes. Ensuring the system works efficiently and toward the organization's overall goals is a priority for many businesses. Having an operations strategy in place can be helpful in the planning of processes and tasks and aligning them with the larger goals of your organization

What is an operations strategy?

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.

For example, a company that produces and sells computers may have the following operations:

• Obtaining materials
• Working with suppliers
• Designing new computers
• Manufacturing computer designs
• Managing employees
• Delivering finished computers to sellers or consumers

Benefits of having an operations strategy

There are several benefits to having an operations strategy within your business or organization, such as:

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

The typical elements of an operations strategy are:

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 leads 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.

A common challenge for those working in scheduling operations is finding a compromise between competing goals in terms of shared resources. For example, both the product development and customer satisfaction teams may want to conduct a focus group, but your organization only has the resources to host one at a time. Within your operations plan, you would determine the optimal scheduling for these two departments.

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.

Key success factors for operations strategies

Key factors to consider throughout any operations strategy include:

• Goals:?You can establish a goal for every operation to give the operation direction and may help you with decisions regarding the operation, which may help achieve the larger goals of the organization.
• Employees:?Most operations have employees who perform them. Having the right employees for each task can improve the quality of the finished task. Whenever you are analyzing an operation, you can look to see who works on it and for ways to improve their ability to do their job well.
• Innovation:?Innovation can help organizations find better ways to operate and potentially gain an advantage over their competitors. Within every operation, it's a good idea to look for areas where you can innovate. You can encourage operations managers to try new processes and then analyze the results.
• Analysis:?All operations require regular analysis, and with analysis, you can learn which operations are running well and which need improvement. Consider implementing a system for regular analysis in each section of your operations strategy by having members of each operation analyze themselves, or establish a separate department to analyze all the other operations.