Operations Strategy and Processes

The operation of a business is the core of what it does. The processes that go to make up the operation and the overall operations of the business should be aligned to the strategy of the business.

Definitions

It is as well to make sure that we are clear what we are talking about in this article: Operations Strategy and Processes.

• When we talk about a strategy we are talking about a long-term goal or direction.
• When we talk about operations we are talking about the actual mechanics a business uses to deliver its product to customers.
• When we talk about processes we are talking about the detailed activities that form part of a business’s operations.

Businesses in manufacturing actually make products, whereas services businesses deliver some kind of service. The service might be “delivering” a product (e.g. a retailer), but it does not involve making it. Nevertheless, a retailer has many similar operations problems to a manufacturer: storage, distribution, security, safety.

Already you can probably begin to see some of the operational processes that need to be considered.

Operations Strategy

Operations strategy is primarily concerned with making sure that the operational functions of the business are set up in such a way so that they can best meet the requirements of the market, so that the needs of the business are ultimately fulfilled. It seems simple, but one organisation’s goals may differ from those of another organisation in the same market. Consider the variables of price, quality, speed of delivery, costs. All these will form part of the business’s goals which will determine its strategies in its operations.

As well as trying to ensure that operations strategies fit well with the goals of the business, they also have to, inevitably, fit in with the principles and techniques of the mechanics of the operational processes themselves. Some of the goals may not fit well with limitations of the operation.

Implementation of operations strategies will require knowledge of the systems and polices in operations, including those that relate to quality, resource planning and activity control, plant management, motivation and organisation of people, performance metrics, continuous improvement and environmental concerns.

If, for some reason, the operation of a business is set up incorrectly or falls out of line with the strategies of that business, then inevitably conflict will follow. This could happen at any level. The owners or the management team of the business should ensure that this is avoided by making sure that those responsible for setting up the operational processes are aware of the overall business strategies.

Processes

An organisation has to use processes to ensure that standards are maintained. Processes define the way activities are carried out within a business, and that includes everything from accounts receivable in the accounts department to the use of safety equipment on the shop floor.

Processes are the means by which a small business can become a larger business as they allow an activity or task to be repeatable – the same every time. They therefore become person independent, and in theory anyone could perform the task if they follow the processes (assuming they have the requisite skill level).

Processes in a business’s operation should also be aligned to the strategies of the organisation, including processes in the operations of the business. That is not to say that processes cannot be removed, updated or added to when things change, such as a change of strategy; a change of technology; or legal changes.

It is important to ensure that the operations and processes of a business are set up and remain aligned with the overall strategies of the business. If they are not, then conflict will undoubtedly follow.