Operations strategy is a functional strategy. Basically, operations strategies are related to the process of transformation of inputs to outputs. Hence, such strategies provide the basis for any decisions at the operations level. Some of the indicative areas of operations strategy are design of products (tangible and intangible), vendor selection, selection of appropriate process for transformation of inputs to outputs, production scheduling, etc.
Although strategy, per se, is more for taking long-term decisions, operations strategy are by nature more tactical and are more relevant for short-term and even day-to-day decisions. Some of the long-term decisions which are based on the operations strategy are location and facility planning, selection of technology, decision making or decision buying, selection of type of products and services, that the company intends to manufacture or provide, decisions on information systems and even the use of software, management-related decisions, etc. Tactical and even short-term decisions that are taken based on operations strategy are production forecasting and planning, capacity planning, inventory management, etc.
Operation Strategy Factors:
From operations manager‘s point of view, it is important to study the following factors while adopting operations strategy.
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1. The number, type, size and location of operations facilities
2. Type of equipment that will be utilized (focused and specific or general-purpose and flexible, automated or principally manual)
3. Decision buying or decision making
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4. Organizational structure (whether it is suitable to accomplish and coordinate all the necessary efforts)
5. The workforce selection, employment security, compensation methods and management style.
6. The information systems that will be used to collect, analyse and distribute information on production, purchasing, inventory, quality, personnel, etc.
7. Production planning, scheduling and control, system and inventory policy
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8. The quality of control and improvement methods that will be used
9. The productivity improvement methods for machine/manpower
From the point of view of operations manager, operations strategy, therefore, shows how an organization develops game plan to derive competitive advantage. Operations function help the organization achieve a competitive advantage in the marketplace.