Operations Strategy

1. OPERATIONS STRATEGY
IMPLEMENTATION

2. OPERATIONS STRATEGY IMPLEMENTATION
• Operations strategy implementation is the way that strategies are operationalised or
executed.
• Strategy remains a document only until it is implemented.
• Strategy implementation depends on many factors like environmental and
organizational conditions, nature of change implied by the strategy etc.

3. LINE OF FIT
• One way of thinking about the underlying purpose of an operations strategy implementation is to use
the ‘line of fit’, or alignment.
• This model gives us a starting point for understanding the operation’s degree of change involved
in the strategy implementation. It is important to be clear regarding how much change is intended.
• Referring to the model of alignment, point A is the current operations strategy and point B is the
intended operations strategy, it is necessary to develop an understanding of current and intended market
requirements and operations resource capabilities.
• But there is a problem. During the implementation from A to B in Figure, the balance between market
requirements and operations resource capabilities may not always be maintained. Thus strategy
implementation is not a straight forward task.

5. WHO IS RESPONSIBLE FOR IMPLEMENTATION
• Organisational relationship that can have a profound impact on strategy implementation is that between those in
the operations function who have responsibility for formulating strategy and those who run the day-to-day
operations tasks.
• These two sets of people may be one and the same.
• In large organizations, a ‘central operations’ function/department is made which formulates the way of
managing operations and resource allocation.
• This distinction between central operations and day-to-day operations managers is often termed ‘staff’ and
‘line’ roles.
• Staff roles: monitoring, planning and shaping role. They are the ones who are charged with building up the company’s
operations capability. They may look forward to the way markets are likely to be moving, judge the best way to develop
each part of the operation and keep an eye on competitor behaviour. These people constitute ‘central operations’.
• Line roles: those who run the day-to-day operations. Theirs is partly a reactive role, one that involves finding ways round
unexpected problems: reallocating labour, adjusting processes, solving quality problems and so on. They need to look
ahead only enough to make sure that resources are available to meet targets. They have a necessary routine.

6. FOUR CENTRAL OPERATIONS FUNCTION

7. IMPLEMENTATION RISK
• Every task of implementing an operations strategy involves some potential risks which
can throw the implementation off track.
• Monitoring and controlling help to be prepared for any event that could cause
implementation deviation.
• Although there are various types of risks involved in strategy implementation but we’ll
focus on:
• The risk of market and operations performance becoming out of balance

8. THE RISK OF MARKET AND OPERATIONS
PERFORMANCE BECOMING OUT OF BALANCE
• During implementation, when changes occur in both market positioning and operations
resources, it causes deviation from the ‘Line of fit’.
• For example, delays in the implementation of a new website means that customers do not
receive the level of service they were promised. A firm may plan to install and debug a new IT
system before it starts to use its potential to make promises to its market.
• The deviation from alignment between market requirements and operations resources is exposing
the firm to risk called Operations risk.
• ‘Operations risk is the potential for unwanted negative consequences from an operations related
event.’

11. OPERATIONAL APPROACHES TO IMPROVE DELIVERY
SYSTEM
• Resource Management
• Capability determination
• Sustainable competitive advantage
• Locating an attractive industry/market
• Formulation of strategy and its implementation

12. CONTROLLING OPERATIONS
• Involves the monitoring and evaluation of activities, plans and performance with the intention of
corrective future action if required.
• Procedure should be capable of providing early indications (or a ‘warning bell) by diagnosing data
• At strategic level, control is less clear cut.
• At an operational level, monitoring and controlling an operation’s activities seems a
straightforward issue.
• Operational control interventions are often repetitive and occur frequently (e.g., checking on
progress hourly, daily or even weekly).

13. TYPES OF MONITORING AND CONTROL
• Expert control: If objectives are unambiguous, yet the effects of interventions relatively
well understood, but the activity is not repetitive. An expert, having a expertise and
experience in implementing interventions are hired. Networking skills are required to
acquire expertise and integrating it into the organization.
• Eg: implementing a new ERP system in the organization.
• Trial and error control: If strategic objectives are relatively unambiguous but effects of
interventions not known, while, however, the activity is repetitive, the organisation can gain
knowledge of how to control successfully through its own failures.
• Eg: launch of a new product into the market

14. CONT’D…
• Intuitive control: If strategic objectives are relatively unambiguous, effects of interventions not
known, nor is strategic decision making repetitive then intuitive controls are applied (more of art
than science). Team members of the organization should have decision making skills.
• Eg: dealing with competitors to survive and get substantial returns
• Negotiated control: The most difficult circumstance for strategic control is when objectives are
ambiguous. This type of control involves reducing ambiguity in some way by making objectives less
uncertain. Outside expert (consultants) can be hired to make the objectives clear by negotiating it
with the conflicting views of the organization. Expert should have credibility and ability to control
ambiguity. Political skills and power structures play an important role.

16. TRACKING PROGRESS TOWARDS STRATEGIC
OBJECTIVES
• Monitoring and control involves tracking performance, scanning the environment, interpreting
the information that it detects and responding appropriately.
• For tracking, two implementation objectives are considered:
• ‘Project’ objectives – those that indicate the progress of the implementation towards its
end point. In other words, is the strategy being implemented as planned?
• ‘Process’ objectives – those that indicate the consequences that the implementation has on
the operations processes that it is intended to affect. In other words, are the results
produced by the strategy as they were intended?

17. RED QUEEN EFFECT
• The basic concept of the Red Queen Effect is to continually evolve, adapt and
multiply not only for incessant production but also to simply survive within their
competitive settings.
• The red queen effect is a metaphor used in the business world to describe the
unsuccessful efforts of a company to get ahead of its competition.
• New and successful strategies are always imitated, copied or blocked by the competitors.
Which will result in no change in the relative position in the competition and you just
survive in the market even by putting all your efforts.
• Key is to run fast and smart – not hard!

19. THE BALANCED SCORECARD APPROACH

20. CONTROLLING RISKS
• Operations strategy practitioners are understandably interested in:
• How an operation can avoid failures
• How they can survive any adverse conditions that might follow?
• Risks can be controlled by three approaches:
• Prevention strategies – are where an operation seeks to completely prevent (or reduce the frequency of)
an event occurring. Eg: not to invest in businesses in war zones
• Mitigating strategies – are where an operation seeks to isolate an event from any possible negative
consequences. Eg: dealing with cyber attacks
• Recovery strategies – are where an operation analyses and accepts the consequences from an event but
undertakes to minimise or alleviate or compensate for them. Eg: minimize customer dissatisfaction by
apologising, refunding monies, reworking a product or service, or providing compensation