Page 62 - Operations Strategy

HOW is OPERATiOns sTRATEgy dEvElOPing? 37
● Operations strategy as ‘supply strategy’
● Operations strategy as ‘functional strategy’
● Operations strategy as the firm’s ‘operating model’
● Operations strategy as ‘strategy execution’

Operations strategy as ‘supply strategy’
Earlier in this chapter we described how all operations could be viewed as a network.
Processes are a network of interconnected individual resources. Operations are a net-
work of interconnected processes. And, at a strategic level of analysis, supply networks
are an interconnected network of operations. So, if the natural context of all individual
operations is as part of a supply network (and, indeed, all operations are part of a supply
network – no operation does everything itself), then at a strategic level, what is the differ-
ence between operations strategy and supply (network) strategy? Surely, it is argued, the
responsibility of operations is to supply its customers by reconciling market requirements
(what customers want) with operations resources (what the operation can do). This is
our definition of operations strategy. So, if we include in our definition of an operation’s
resources the whole network of its suppliers and their suppliers, as well as customers and
their customers and so on, operations strategy is indistinguishable from supply strategy.
However, some authorities would argue that there is more than a semantic difference
between operations and supply strategy. The term ‘supply strategy’, they would argue,
emphasises the responsibility that all operations have to take some accountability for
the contribution of the supply network of which they are a part. To quote two well-used
sayings of supply network practitioners: ‘individual operations don’t compete, supply
chains (or networks – we shall explain the difference in Chapter 5) compete’, and ‘your
customer doesn’t care if your supplier lets you down, it was you who failed to deliver’.
No operations strategy should ignore the configuration and management of the sup-
ply network of which it is part, and no supply strategy should ignore the individual
capabilities of the operations that constitute the network. In this book, we treat supply
network strategy (or, more accurately, purchasing and supply strategy) as one of opera-
tions strategy’s decision areas in Chapter 5, but we could just as easily have used ‘supply
strategy’ as the over-arching framework for the whole book.

Operations strategy as ‘functional strategy’

Earlier we established that the transformation model, on which operations activities are
based, not only applies to all types of business, but also describes functions other than
the operations function, such as marketing, finance, information systems and HRM.
So, it follows that if it is helpful to take a strategic view of the ‘operations’ transforma-
tion process, it should also be worthwhile doing the same for any other organisational
function. In other words, operations strategy, its frameworks, concepts, models and
tools, can form the basis of any functional strategy. Or, put another way, all functions
deliver service externally or internally using their resources and processes, and just like
the operations function, every function has a responsibility to make sure that the way
they develop their resources and processes contributes to overall strategy. Therefore, the
application of operations strategy should be central to senior managers in any function.
This is where we need to distinguish between the different components of expertise
necessary to lead a function. There is a strong case for an appreciation of operations

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