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suMMary ansWers tO Key QuestIOns 41
resources and market requirements. And, at a commonsense level, strategy execution
must be concerned with making changes to the way things are done currently. Presum-
ably, this will involve changing some combination of the organisation’s capacity, sup-
ply arrangements, technology, new product and service development and so on. Which
is exactly what operations strategy does. So, the decision areas of operations strategy
can be seen as a ‘checklist’ for the practical changes that executing any strategy implies.
After all, any topic that deals with operations, whether at an operational or strategic
level, must be concerned with practical issues. ‘Operations’ is about doing stuff, getting
things done, making things happen. It is about how we deal with the reality of creating
services and products. It is about execution.

suMMary ansWers tO Key QuestIOns

Why is operations excellence fundamental to strategic success?
‘Operations’ is the activity of managing the resources and processes that produce and
deliver goods and services. All operations transform resource inputs into outputs of
products and services and can be analysed at three levels: that of the business itself; as
part of a greater network of operations; and at the level of individual processes within
the operation. Operations management contributes to the success of any organisation
by reducing costs, by increasing revenue by reducing capital employed and by providing
the basis for future innovation.

What is strategy?
Strategic decisions are those that set broad objectives that direct an enterprise towards
its overall goal, plan the path that will achieve these goals, stress long-term rather than
short-term objectives and deal with total picture rather than with individual activities,
and are often seen as above or detached from routine day-to-day activities. However,
it is not easy to totally characterise strategy or strategic decisions. Some organisations
make no explicit strategic decisions, as such. Rather, they develop over time, often with
strategies that ‘emerge’ from their ongoing experience of doing business. Furthermore,
the strategy that is espoused by an organisation may not always be reflected in what
it actually does. This is why strategy is often taken to be the ‘pattern of decisions’ that
indicate the company’s overall path.

What is operations strategy?
Operations strategy is the total pattern of decisions that shape the long-term capabili-
ties of any kind of operation and their contribution to overall strategy, through the
ongoing reconciliation of market requirements and operation resources. All businesses
have markets, all businesses own or deploy resources; therefore, all businesses are con-
cerned with the reconciliation of markets and resources.

how should operations reflect overall strategy?
An operations strategy will be one of several functional strategies that are governed by
the decisions that set the overall strategic direction of the organisation. This is called the
‘top-down’ approach. So, corporate strategy should be reflected in the strategies of each
business unit, which should, in turn, inform the strategy of each business function.

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