Page 38 - Operations Strategy

WHAT is OPERATiOns sTRATEgy And HOW is iT diffEREnT fROm OPERATiOns mAnAgEmEnT? 13
experience. No top-level board decision was probably ever taken to confirm this prac-
tice, but nevertheless it emerges as the way in which the company organises its designs.
Figure 1.6 illustrates both the top-down and bottom-up for this example.

how do the requirements of the market influence operations strategy? the
market requirements perspective

Operations exist to serve markets. Indeed, a sensible starting point for any operations
strategy is to look to its markets and ask the simple but important question, ‘How can
operations help the organisation to compete in its market place?’ Remember, though,
that the organisation itself usually has some influence over what its markets demand,
if for no other reason than that it has chosen to be in some markets rather than oth-
ers. Therefore, by choosing to inhabit a particular market position, the organisation is,
to some extent, influencing how easy it is for the operations function to support the
market position. This opens up the possibility that, in some circumstances, it may be
sensible to shift the markets in which the organisation is trying to compete, in order to
reflect what its operation is good (or bad) at. We shall discuss this in more detail later;
for now we return to the important point that operations strategy must reflect the
organisation’s market position. And the starting point for this is to develop an under-
standing of what is required from the operation in order to support the market position.
One problem with this is that the concepts, language and, to some extent, philosophy
used by the marketing function to help them understand that markets are not always
useful in guiding operations activities. So, descriptions of market needs developed by
marketing professionals usually need ‘translating’ before they can be used in an opera-
tions strategy analysis.

Figure 1.6 top-down and bottom-up perspectives of strategy for the metrology
company

Top-down Top-down
Group building corporate capability in
Corporate objectives, impact Corporate strategy high-technology products and services
on business objectives which,
in turn, influence operations Metrology division competes on
strategy Business strategy ‘fast-to-market’ innovations

Operations must have fast and
flexible technology, supply
Operations strategy relationships, process and sta
Modular strategy provides flexibility
and innovation at relatively low cost
Day-to-day experience of
providing products and Emergent sense of what the Experiment with ‘modular’ design of
services to the market strategy should be key products and components
reveals problems and
potential solutions that Customers confused by continual
become formalised into product innovation and costs are
operations strategy Operational experience increasing
Bottom-up Bottom-up

M01 Operations Strategy 62492.indd 13 02/03/2017 13:00