Operations Strategy

Operations strategy is the "total pattern of decisions that shape the long-term capabilities of an operation and their contribution to overall strategy" (APICS Dictionary 2008).

Operations strategy must be in alignment with the overall businss strategy of the organization.

Business Strategy Alignment

  • A mission statement "is a formal short written statement of purpose of a company or organization" (Wikipedia 2010). Its purpose is to guide the decisions made in the firm.
  • The vision statement of a business is a desirable and compelling image of what it will be like should the business mission be accomplished.
  • Business strategy identifies the overall approach to achieving the business mission. It is the "plan of action designed to achieve" the goal (Wikipedia 2010).
  • Functional strategies identify how each organizational function will achieve their part of the business mission.

Elements of the Operations Strategy

  • Capacity decisions - amount, type and timing of capacity changes
  • Facilities decisions - service, manufacturing, warehouses, distribution facilities
  • Technology decisions - manufacturing & service processes, materials handling, transportation equipment, computer systems
  • Organizational decisions - structure (centralized/decentralized), control and reward systems, workforce decisions
  • Sourcing decisions - sourcing strategies, supplier selection, supplier performance measuremen
  • Planning & control - forecasting, tactical planning, inventory management, production planning & control
  • Quality management - total quality management, continuous improvement, statistical quality control
  • Product & service development - development process, organization and supplier roles

References

Chase, Jacobs & Aquilano (2006).