Role of Operational Strategy in Achieving Business Goals
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Every business, whether a start-up or a well-established company, needs to establish clearly defined business objectives and future goals. However, achieving those goals depends on how structured the company’s operational strategy is.
Today let’s delve deeper into the role of business operations strategy in achieving business objectives, and what an organization can do to develop and implement said strategy into its management processes.
What is an Operations Strategy?
An enterprise’s operations strategy is part of a larger business management process that takes into account all its activities and ensures sustained operational effectiveness for the short as well as long term. This means setting up an operational team and creating a proper operational workflow that can keep the business on track as it works towards its goals.
An operations strategy includes multiple focused plans and initiatives that come together to help the organization capitalize on its capabilities. When strategy and operations come together, it involves devising actions and making conscious decisions around the creation, planning, management and improvement of operational procedures, assets and systems within the organization.
Say, you are a manufacturing company. Your operations strategy would include creating and managing the complete lifecycle of your product, from its inception to bringing it to the market. This includes setting up procedures for the procurement of raw materials, streamlining the manufacturing process, building a distribution channel, and identifying dealers and marketplaces. You will also need to invest in the training and development of your workforce to keep pace with the changing industry. Also, by monitoring customer demands and deploying data analytics, you will equip yourself with the right set of insights to make better decisions that will maintain and improve operational performance and give you an edge in the market.
Operational Strategy is the Foundation for Success
Undoubtedly a business can manage without an operations strategy and go in blind into the market. But this cannot be sustained for long, especially if the business is looking to scale and grow its market presence.
With a clearly defined operations plan in its pocket, a business can ensure greater operational efficiency and success. The operations strategy ensures that the organization’s operational capabilities are aligned with its business strategy. This helps in maximizing resource utilization, including facilities, machines and technology, talent and supply chain. A positive result of this is reduced costs and satisfied customers.
Correlation Between Operations Strategy and Project Management
Project management and operations strategy are two separate activities that are dependent on each other. One can usually find the two coming together when a company is planning on launching new products, looking for ways to optimize processes, undertaking facility expansions or relocations, or seeking to optimize its supply chain.
As an operations strategy example, let’s consider a new product launch. Here, project management oversees the specific tasks and timelines required for product development and launch. Operations strategy is tasked with the integration, manufacturing, and supply chain requirements. When the operations strategy calls for any changes in the process, it is the project management team that ensures those changes are successfully implemented.
In the case of expansion or when moving to a new facility, it is the operations strategy that identifies and selects the best design and layout, while project management is in charge of executing the plan. In supply chain improvement, project management takes care of the implementation while operations strategy directs the activity.
The Benefits of Strategic Process Management
Done right, an effective operation strategy provides numerous benefits to an organization, including:
- Equip the company to adapt to sudden changes.
- Improve resource utilization, bringing down operational costs.
- Channel efforts and resources on business-critical matters, thus improving overall profitability.
- Bring procedural uniformity across all departments.
- Inculcate a proactive rather than reactive methodology.
Five Key Elements of Operational Strategy
Irrespective of what your business goals are, there are five key elements of operational strategy that are relevant to all businesses and industries.
- Process Designing: For a business to achieve its optimum operational efficiency, it needs to prioritize the design and optimization of its processes. From creating the flow of operations and standardizing procedures across departments, to establishing quality control methods that ensure an end product of high-quality, each step of the process is critical.
- Capacity Planning: This includes accurately identifying the resources, facilities, and production capacities required to cater to present and future demands. The process involves calculating production volume, resource availability, current and future market demand, and scalability readiness for optimal resource usage without compromising operational flexibility.
- Supply Chain Management: This remains one of the critical business operation areas. Operations strategy is responsible for the entire supply chain, from sourcing raw materials right up to delivering the finished product or service to its customers. Tasks involved include supplier selection, raw material procurement, inventory management, logistic support, and distribution. An efficiently managed supply chain guarantees timely and efficient flow of materials and information to meet evolving customer demands.
- Quality Management: Maintaining high standards of products and services is important for customer satisfaction, brand reputation and leading the market. Operations strategy takes care of the implementation of quality management practices to attain and maintain those standards. This means establishing quality standards, applying quality control systems, and continually evaluating and improving the process.
- Continuous Improvement: Operating a business means continually looking for ways to improve all aspects of operations. Operations strategy is tasked with this responsibility. This includes adopting and implementing methodologies such as Six Sigma, Lean, or Kaizen that can help identify and eliminate wastage, streamline processes, and drive greater efficiency. Continuous improvement can help enhance productivity, lower costs, and provide greater customer value.
Also Read: A Beginner’s Guide To Operations Management
Conclusion
Developing an operational strategy isn’t a one-time initiative. Rather, it is a continuous process that needs to evolve according to changes in external and internal demands. Continuous improvement through regular reviews and updates can help a business understand and incorporate new insights, technologies and methods into its operations.
Frequently Asked Questions
Q1. What is an operations strategy?
Making optimum use of resources calls for a study of all business processes, assets and systems within an organization. Identifying these can reveal areas of waste and bottlenecks, costing the business loss in time, effort and capital. Operations strategy means devising a seamless workflow that can help the business achieve its goals.
Q2. How do strategy and operations work together?
In a business, departments do not operate in isolation. Strategy and operations must come together to take concrete action and make conscious operational decisions across the organization. This helps achieve company objectives and improve the overall organizational decision-making ability.
Q3. What is the role of a business operations strategy?
Every business has short- and long-term goals. A business operations strategy is a decision-making process that works in the long term and helps the organization achieve the objectives as outlined in its mission statement. This allows each function to support the other in realizing a common goal.
