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Operations Strategy: Aligning the Organization for Superior Execution

Operations Strategy: Aligning the Organization for Superior Execution. Introduction. Operations is all about how work is organized and performed The goal is execution: getting work done It’s about the details, but also the high-level organizing structure

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Operations Strategy: Aligning the Organization for Superior Execution

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  1. Operations Strategy: Aligning the Organization for Superior Execution

  2. Introduction • Operations is all about how work is organized and performed • The goal is execution: getting work done • It’s about the details, but also the high-level organizing structure • Operations is focused on business processes

  3. Outline • Build an operations strategy framework • Apply the framework to your organizations • Wrap-up & summary

  4. Operations Strategy • A strategy is a well coordinated set of objectives, policies and plans aimed at securing a long-term competitive advantage. It provides vision for the organization. Corporate What business are we in? How do we compete in a given business? Divisional What is the role of operations in the business? Functional

  5. Operations Strategy – Three Components • Mission • Operations Objectives • Management Levers

  6. Building an Operations Strategy Target Market Who is our intended customer? Value Proposition What are the most important elements of our product/service from the customer’s perspective? Operating Strategy: Mission + Objectives How do we do what we do? Delivery System: Levers How is the work organized and performed?

  7. Operations Strategy – Three Components • Mission • Operations Objectives • Management Levers

  8. Mission of Operations • States a purpose for operations and priority among objectives. It specifies the primary task which must be achieved for operations to succeed. It is derived from the business strategy, objectives, and the particular business situation. • Corporate mission statement: what you do, who you are • Operations mission statement: how you do what you do

  9. Mission of Operations - Examples • Ford Motor Company: “Quality is Job #1” • FedEx: “When it absolutely, positively has to be there overnight” • Northwest Airlines: “Provide safe, clean, on-time air transportation with luggage, in a professional and consistent manner” • Dartmouth-Hitchcock Medical Center: “We advance health through research, education, clinical practice and community partnerships, providing each person the best care, in the right place, at the right time, every time”

  10. Operations Strategy – Three Components • Mission • Operations Objectives • Management Levers

  11. Operations Objectives • Cost • Quality • Delivery • Speed • Reliability • Flexibility • New Product/Service Introduction • Volume • Product/Service Mix

  12. Objectives: “Winners” vs. “Qualifiers” • Qualifier: must have to enter market • Winner: feature that leads the customer to choose your product or service • Consider the “3 C’s” when ranking objectives: • Customers • Competitors • Capabilities

  13. Operations Strategy – Three Components • Mission • Operations Objectives • Management Levers

  14. Management Levers • Capacity Management • Facilities • Inventory • Planning and Control • Human Resources • New Products / New Services • Process and Technology • Quality Management • Sales and Operations Planning • Supply Chain Management

  15. Framework Intro Wrap-Up • Establish a framework for an operations strategy • Operations mission • Objectives • Management levers • Goal: define a consistent direction and establish how to get there

  16. Operations Strategy Break-Out

  17. Operations Strategy - Breakout • Who is your target market? • What is your value proposition – what does your target market want? • Specify an operations mission statement for your organization • It should say something about how you execute • The focus is “how you do what you do” • Carefully define each operations objective for your organization: • Cost • Quality • Delivery • Flexibility • Rank order these four objectives • Which are more important, which are less important? • What measurable targets do you, or should you, employ for these objectives?

  18. Operations Strategy - Homework • For each of the seven management levers: • What are the current policies for each? • Are they consistent with the other levers? • Are they consistent with the operations objectives? • What action programs must be put in place to remedy any problems? • Who will carry out these programs? When? • Capacity Management • Human Resources • New Products / New Services • Process and Technology • Quality Management • Sales and Operations Planning • Supply Chain Management

  19. Wrap-Up • Establish a framework for an operations strategy • Operations mission • Objectives • Management levers • Goal: define a consistent direction and establish how to get there • Operations can be a powerful competitive weapon!

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