My MBA Journey

Record of my personal journey completing an MBA

Operations Week 2 – Towards Excellence Operations for Strategic Impact

Operations Management

Introduction

Having left Victoria for the warmer climes of Queensland, I have fallen behind with my blog posts. I have also lost some rhythm with my study as well due to internet availability, travel hours, and weather. On top of that, there have been problems with the electrics in the caravan to attend to on the way. All of these, except for internet availability, are under control. Internet will depend on where I am camped at the time.

The following notes are the ones I have taken from those provided in the subject module [[Australian Institute of Business [AIB] 2022, ‘Module 2: Towards excellence: operations for strategic impact’, 8004OMGT Operations Management 2022 Term 3, Australian Institute of Business, Adelaide.]].

Operations Strategy

Successful implementation of an organisation’s strategy is contingent on the effective management of operations and processes. This is more critical if the organisation operates in a competitive market. There are some industries of course who are not competitive by nature. These would include social services and health care. Success for an organisation however is not just about competitive advantage or profit, it is also about achieving the organisation’s objectives. In a non profit, this could mean the number of homeless fed, the number of nights shelter provided etc. When an organisation’s overall strategies have been defined, then it follows that there would be a deliberate series of processes by the various areas of the business to pursue these strategies.

The textbook defines operational strategy as the “pattern of decisions and actions that shapes the long term vision, objectives and capabilities of the operation” and its impact on the company’s overall strategy [[(Slack & Lewis cited in Slack & Brandon-Jones 2018, p. 43).]].

Hayes and Wheelwright Four Stage Model

In order to manage operations strategy, organisations must have a concept of how the overall success of the business will be served by the operations strategy. This is known as the operations function ‘vision’. The model below shows the different stages of the operations functions to organisational strategy. Each stage of this model reflects an increase in the strategic impact of the organisation. Each stage is named for its role in the organisation overall.

Hayes and Wheelwright model.
Source: Figure 2.2, Slack & Brandon-Jones 2022, p.49

How to shape operations strategy?

Given the above model, an organisation’s objective should be to work through all four stages to arrive at the fourth stage. In order to successfully achieve this, organisations can utilise four perspectives in viewing their operations strategy.

  1. Top down perspective
  2. Outside in perspective
  3. Bottom up perspective
  4. Inside out perspective

Are the 4 Perpectives of Operations Strategy Reconciled?

The operations manager is charged with the goal of developing strategy that makes constructive contributions to the organisational strategy. The text refers to two methods by which the operations manager can check performance. These are the Operations Strategy Matrix and the Line of Fit model.

The Operations Strategy Matrix below assists the operations manager in ensuring that the inside out and outside in perspectives of operations strategy are reconciled. In other words, the two perspectives are reconciled by aligning what is expected from the market and how the operations respond.

Operations strategy and operations improvement

To implement an operations strategy, it may be necessary to make changes and improvments to existing operations to improve their performance. Improving operations in one area can mean a diminishing of performance in other areas. An example could be where there is extreme cost pressure, the quality of the product may be lowered through speed or a change in input resources.

Conclusion

An interesting and challenging start to the subject. Unlike past subjects that were effectively siloed, Operations extends across all areas of an organisation. The building blocks of operations, processes, can be macro such as retail sales chain, or micro in completing an individual’s staff review.

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Ric Raftis

Find out more about me on my About Me page.

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