Chapter 1: Operations strategy – developing resources and processes for strategic impact
For some business managers, the idea of an ‘operations strategy’ is a contraction in terms. After
all, to be involved in the strategy process is the complete opposite of those detailed and day-to-
day tasks and activities that are associated with being an operations manager. Yet at the same
time we know that operations can have a real strategic impact:
- Enduringly remarkable enterprises manage their operations resources and processes in
central to long-term strategic success.
- All enterprises, and all parts of the enterprise need to prevent strategic decisions being
frustrated by poor operational performance.
The principles of operations strategy can be deployed in all parts of the business, all functions
of the business and all its extended supply network – and that, by using these principles, any
type of enterprise will benefit.
Why is operations excellence fundamental to strategic success?
‘Operations’ is the part of the organization that creates and/or delivers its products and services.
Every organization has an operations function; every organization tries to add value by
producing some mix of products and services for external or internal customers; transforming
inputs in outputs that satisfy customer needs. This is illustrated in the transformation model:
Most operations produce both products and services; with only a peripheral service element of
almost pure services.
Operations network and ‘levels of analysis’
The ‘processes’ within a transformation system are a network (two or more sets of resources
linked together) of transforming resources. Networks can describe operations activity of many
different types at many different levels of analysis.
- A network of individual units of resources – the capabilities of each unit of resources in
the process and the relationship between them.
- A network of processes – the capabilities of each process in the operation and the
relationship between them.
- A network of operations – the capabilities of each operation in the network and the
relationship between them.
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For some business managers, the idea of an ‘operations strategy’ is a contraction in terms. After
all, to be involved in the strategy process is the complete opposite of those detailed and day-to-
day tasks and activities that are associated with being an operations manager. Yet at the same
time we know that operations can have a real strategic impact:
- Enduringly remarkable enterprises manage their operations resources and processes in
central to long-term strategic success.
- All enterprises, and all parts of the enterprise need to prevent strategic decisions being
frustrated by poor operational performance.
The principles of operations strategy can be deployed in all parts of the business, all functions
of the business and all its extended supply network – and that, by using these principles, any
type of enterprise will benefit.
Why is operations excellence fundamental to strategic success?
‘Operations’ is the part of the organization that creates and/or delivers its products and services.
Every organization has an operations function; every organization tries to add value by
producing some mix of products and services for external or internal customers; transforming
inputs in outputs that satisfy customer needs. This is illustrated in the transformation model:
Most operations produce both products and services; with only a peripheral service element of
almost pure services.
Operations network and ‘levels of analysis’
The ‘processes’ within a transformation system are a network (two or more sets of resources
linked together) of transforming resources. Networks can describe operations activity of many
different types at many different levels of analysis.
- A network of individual units of resources – the capabilities of each unit of resources in
the process and the relationship between them.
- A network of processes – the capabilities of each process in the operation and the
relationship between them.
- A network of operations – the capabilities of each operation in the network and the
relationship between them.
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