Does Your Operations Strategy Bring Value?
How can an operations strategy benefit your company? The easiest answer is that the business achieves more with it than without it.
The preponderance of small, and some mid-size manufacturers soldier on without an operations strategy. They live by “get order, fill order,” and discussions, usually begun at the last minute, of capacity adjustments. They complain about long supplier lead-times.
That operating model precludes agility and incurs unnecessarily high costs. It also gives constituencies reason to look for alternatives.
Most mid-size and large companies have an operations strategy that guides both longer term and tactical decisions in support of business goals.
If you believe that an operations strategy is irrelevant to profitable growth of a manufacturing company, I can’t help you. If you think that an annual operations budget is the same as an operations strategy, you’re confusing assumptions with strategy. But if you have an operations strategy, or are thinking about one, consider these simple means of assessing and increasing its value:
As always, determining value requires a common definition of success. The easiest definition that applies to everyone is simply that the business achieves more with the operations strategy than without it.
Ask yourself these questions:
- Does the operations strategy propel your business and marketing/sales strategies beyond what they could accomplish without it?
- Do your constituencies experience a positive difference?
- Can you create, or profitably respond to, significant disruption?
- Is operational activity routine, without need for heroic action?
- Do key customers and suppliers seek to partner with you in influencing the market or creating new ones?
- Are operational risks understood, measured and managed?
As you become more strategic and skilled at developing your operations strategy, the answers to each question will move from “no” to “yes.” Then, it’s time to define a scale, say from 1 to 5, for each. Generically 1 indicates “yes, barely” and 5 indicates “you better believe it!” How you objectively recognize each value on the scale may be different for different business models. The more clearly the scale is defined, the more insights you can leverage in improving the quality of your operations strategy.
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