Operation Strategy Management

Strategy is defined as a method or plan chosen to bring about a desired future, such as achievement of a goal or solution to a problem. In management strategy is the means by which an entity seeks to achieve its objectives, survives and prospers in the long term. Strategy aids an entity in moving closer to its long term goals. For simplicity, I will confine my discussion of strategy to that of operations strategy in which I would identify the four perspectives of operations strategy and relate it to the content of an organization’s operations strategy.

Operation strategy concerns the pattern of strategic decisions which set the roles, objectives and activities of operations. The decisions and actions taken within a business’ operations will have a direct impact on the basis on which an organization is able to achieve its goals. The way in which an organization utilizes its resources will determine the extent to which it can pursue performance objectives, which are: cost (Low cost), quality (high quality), speed (fast delivery), dependability (reliable delivery) and flexibility (diversifying product range). There are four perspectives on operational strategy, these are: the “top down” approach, the “bottom up” approach, the market requirement approach and the capabilities of operations resources approach.

The “top down” perspective is one which is derived from the entity’s business strategy, therefore, it is operations strategy that the firm uses to realize it's business strategies. This perspective is centered around executive decision making, this implies that the management of the entity would determine the objectives of the firm and will seek to outline how the rest of employees would work toward achieving the objectives. So for example, my business DML Ltd aims to offer the lowest price for shoes on the market (business objective) , then my operational strategy should seek to achieve a low cost of operations. Likewise, if DML Ltd aims to ensure a fast delivery time (business objective), then my operational strategy should be aligned to achieving speed in operations. Therefore, we see how the top down approach contributes to the content of an organization's operational strategy. The top down approach is advantageous in the sense that it gives an entrepreneur/management a greater sense of control as this perspective enables an owner/management to carry out operations based on the business objective specifications. On the other hand the top down approach can be disadvantageous as the success of an entity relies on the business objectives, however if there is improper knowledge about the market or product development ideology is poor, the directions and objectives communicated to employees would be unclear meaning that employees wouldn't know how to effectively achieve business objectives, which results in decreased revenues for the firm.

The second operational strategy perspective; the bottom up perspective sees operational strategy emerging through a series of actions and decisions taken over time within operations. The actions taken with this strategy are usually characterized by a continuous series of incremental improvements. The bottom up approach is one where an entity learns from it's experiences and aims to develop and enhance its operational capabilities. Within this approach we see the concept of workforce strategy development as operations managers use the collective brainpower of employees of all levels to assist in creating the mechanisms to reach business objectives. So for example DML Ltd would take the advice an operations manager in the packaging department who says that we should hire 10 new workers in order to increase the speed in which shoes are packaged and sent off to retailers, this idea would be highly considered as it falls in line with my business objective which is fast delivery times. Also an operations manager in the production department suggests that we regularly service our production machines more regularly as they have been recently needing both minor and major repairs, this suggestion again aligns itself with another business objective which is low product cost as overheads now decrease. So here again, we see how this operational strategy perspective contributes to the content of the organizations operational strategy. The major advantage of the bottom up approach is that it increases employee morale, whereas the major disadvantage is that in most cases employees don't seem to grasp what exactly is operational strategy.

The third operational strategy perspective is the market requirement approach is one in which the operations strategy is tailored to suit the market environment that it operates in. This perspective illustrates that an organization's operations strategy should be linked to its marketing strategy by considering how its products and services win orders in the market place. This perspective identifies two types of competitive criteria in any market. Market qualifying