Operations Management Strategy


 — March 9th, 2022

Operations Management Strategy

Operations management is defined as the administration of business practices to create the highest level of efficiency possible within the company. It revolves around converting materials and labor into goods and services as efficiently as possible to maximize the profit of an organization.

In order to plan, analyze, and execute a company’s operations, a strategy is essential. An operations strategy is implemented by employers as a way to execute cost-effective processes for creating and distributing products and services.

This means, an operations management strategy is delivery-focused and is put in place as a way for businesses to effectively convert inputs to outputs. The inputs in question can refer to anything from materials, equipment and technology to human resources such as staff or workers.

Ultimate Guide - How Great Communication Fuels Transformation at Speed

Operation management strategy examples:

  • Corporate strategy - Corporate strategy concerns itself with the entirety of the organization, where decisions are made with regard to the overall growth and direction of a company.
  • Customer-driven strategy - A customer-driven strategy prioritizes the customer experience above all else and uses customer needs to guide every facet of operations, from the marketing plan to product development.
  • Supply chain strategy - A supply chain strategy is a formal approach to managing the network between an organization and its suppliers.
  • Product development strategy - Product development strategy enables product organizations to create a stream of innovative offerings that disrupt the competition and delight customers.
  • Cost-driven strategies - Cost-based strategies relate to the business decision to base the price of a product on the costs of production rather than external factors such as competition or the economic environment.

What are the benefits of having an operations strategy?

There are several benefits to having an operations strategy within a company. These include:

Improved employee efficiency

Having an operations strategy in place ensures that both organization leaders and employees understand what they are working towards as it outlines the objectives of different company departments.

It also allows employers to identify which departments are operating efficiently and those which may need to work harder in order to see good results. In this way, operations strategy helps ensure that any employee contributing to an operation makes use of their time and skills productively and reliably.

Department cooperation

An operations strategy details how different departments within a business work side by side. It’s important to understand that interdepartmental communications and collaborations involve more than simply cooperating with other teams.

It is about fostering a shared vision,  mutual respect, and in-depth understanding of each other's roles. With this knowledge, each department gains an understanding of the part they, along with other departments in the company, play in helping the business reach its goals and expectations.

Increased profitability

In the long run, having an operations management strategy in place leads to overall income increases. When operations run smoothly, employers have more time to focus on cultivating new ideas and apply them to increase company sales.

Furthermore, with experienced leaders in place, the monitoring of revenue and expenses is much more straightforward. When company profitability is well managed, it becomes easier to understand revenue.

Increased customer satisfaction

Keeping existing customers happy should be a priority for every organization. Customer satisfaction is important because it hugely increases the chances of a consumer returning to avail of more products and services.

Customer expectations can be met when a quality management program is put in place that helps maintain high standards while ensuring efficiency. Remember when customer expectations are met, satisfaction levels can increase, which can also lead to better retention and increased referrals.

Communications in operations management

One of the biggest productivity challenges of an operation process is communication, especially internal communication. When a firm does not have an adequate standard of internal communication, its customers end up suffering from the lack of standardization and delays.

Steps to improve communication across company operations:

Improve relations amongst company leaders

Conflict between department heads can damage relationships across different sectors of the organization. As a result of these poor relations, it becomes difficult for employees within the departments to communicate effectively.

Utilizing team-building exercises is a great way to build camaraderie amongst department heads and is a proven way to strengthen relationships and improve communication. When leaders find a way to work side by side, it will set a positive example for employees within each department.

Clearly outline communication guidelines

Many organizations fail to outline the procedures for interdepartmental communication, which leaves interaction between departments up to the employees’ discretion. This can create friction and slow down workflows.

How to set communication guidelines:

  • Make a list of your communication channels
  • Identify primary uses and expectations
  • Share and enforce with each department
  • Repeat quarterly

Consider physical gaps between employees

Effective communication among staff members can be impacted by physical distance. Finding ways to bridge the gap between employees who may be working on different floors, in separate buildings, or even in other continents is essential.

This means it is difficult to communicate in a singular way that meets all employees’ needs. That’s why a multi-faceted approach that takes different styles and methods into account is needed.

Identify the vital information always needed

If information concerns employees and their work, they have a right to know. Either the information helps them work more efficiently or it gives them a perspective on how their work should be done. Each operational unit needs to create a list of the missing details from other operational units and their routine expectations.

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Key Takeaway

To operate productively businesses must use the least amount of resources needed and strive to meet the customer's requirements to the highest possible standard. An operations strategy can take on different roles depending on company size and the product.

Operational strategies focus on the goals and aspirations of the company, as well as the actual plans for getting the business to achieve their goals. Strategic plans should include not only the identification of existing processes and technologies, but also considerations around the supply chain, their customers, their competitors, their own strengths and weaknesses, and the business facilities.

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