Operational strategies refers to the methods companies use to reach their objectives.

By
developing operational strategies, a company can examine and implement effective and efficient
systems for using resources, personnel and the work process. Service-oriented companies also
use basic operational strategies to link long- and short-term corporate decisions and create an
effective management team.

Corporate Strategy

Corporate strategies involve seeing a company as a system of interconnected parts. Just as the
muscles of the heart depend on brain functions in a human body, each department in a company
depends on the others to stay healthy and achieve desired outcomes. The additional core
strategies that a company uses should support the corporate strategy and use cross-functional
interactions.

Customer-driven Strategies

Operational strategies should include customer-driven approaches to meet the needs and
desires of a target market. To do so, a company must develop strategies that evaluate and adapt
to changing environments, continuously enhance core competencies and develop new strengths
on an ongoing basis. When evaluating environments, a company should monitor market trends
to take advantage of new opportunities and avoid possible threats.

Developing Core Competencies

Core competencies are the strengths and resources within a company. While core competencies
can vary by industry and business, they can include having well-trained staff, optimal business
locations and marketing and financial expertise. By identifying core competencies, a company
can develop processes such as customer satisfaction, product development and building
professional relationships with stakeholders.

Competitive Priorities

The development of competitive priorities comes from the creation of a corporate strategy,
market analysis, defining core processes and conducting a needs analysis. To create
competitive priorities, an organization evaluates operational costs, the quality of a product or
service, the time it takes to develop and deliver a good or service and the flexibility of a good or
service with regard to variety, volume and customization. Competitive priorities should include
being able to provide a quality product or service at a fair cost that consistently meets the needs
of a customer.
Product and Service Development

Strategies behind the development of products and services should consider design, innovation
and added values. When developing new customer products, a company can decide to be a
leader in introducing a new product or service, wait for the introduction of innovations on the
market to improve upon them or wait to see if a company’s innovation is successful before
moving forward. When developing a service, companies should consider packaging it with
immediately observable and psychological benefits and support services. When developing a
good or service, a company should consider the wants of its customers, how its stands against
the competition and how its technical measures relate to its customers’ needs.

Roles and Responsibilities of operations manager

Manages the Budget

One of the key components of a small business, especially one that is involved in the production
of goods, is operating within a budget. An operations manager is responsible for reviewing line
items in a budget to determine whether there are less costly ways to accomplish a task. This
may include finding quality equipment at a cheaper price, or finding ways to lower production
expenses by streamlining the production process and negotiating new contracts. Operations
managers also analyze the supply chain to find areas where the budget can be tightened, and
they implement cost-benefit analysis to find ways to boost efficiency.

Manages Inter-Departmental Communication

Small businesses that feature multiple departments often find that one hand doesn’t know what
the other hand is doing. This can create tension, conflict, and a loss of efficiency and
productivity, not to mention hindering desired goals. An operations manager is responsible for
liaising with department heads to ensure that each is working in harmony toward production
goals, while also meeting quality standards. By centralizing this communication through an
operations manager, you limit misunderstandings between your departments, which can also
boost morale and motivation.
Manages Customer Service Issues

An operations manager is also the person responsible for dealing with customer service issues
that directly relate to product or equipment quality. Once the operations manager has assessed
and evaluated the customer issue, she must communicate these problems to staff members and
suggest the best methods to improve or resolve that customer issue. This can include complaints
with product or service quality, complaints about the customer service process, or complaints
about how a product or service was delivered.

Manages Support Services

Many small businesses have support services that can help them maximize their operational
efficiency. Whether your company’s support services include information technology,
administrative support, financial services or procurement, an operations manager must ensure
that these support services are performing to the standard necessary for your business to
maintain its expected growth. Your operations manager is also able to analyze key performance
indicators to determine if your support services are yielding the appropriate return on investment.

Management of Resources

Operations managers play a leading role in managing both raw materials and personnel.
Oversight of inventory, purchasing and supplies is central to the job. Human resources tasks
include determining needs, hiring employees, overseeing assignment of employees and planning
staff development.

Financial Management

Operations managers play a key role in budgeting, controlling costs and keeping the organization
on track financially. Their management of the supply chain and other resources helps minimize
costs of production. They study business forecasts, sales reports and financial statements to find
ways to maximize results. They use methods such as cost-benefit analysis to improve efficiency.
Modern operations management even includes sustainability in the financial equation.

Goal-setting

Operations managers set goals and objectives and establish policies for various departments in the
organization. For example, operations manager duties include sales forecasting and planning of sales
promotions. In cooperation with other managers, they help establish procedures and put them into
effect.
Communications

Operations managers need good communication and interpersonal skills to help the different parts
of an organization work together. Their job includes creating a positive culture where the work can
get done. They facilitate communication between employees and departments. At times, operation
managers help resolve disputes or disagreements. Operations managers cooperate in high-level
decision making with other top executives of an organization, such as the president, chief financial
officer and chief executive.

Operations management as an inter-functional imperative

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Achieving cross-functional coordination

Cross-functional coordination
• Interdependent functions require coordination
• Strongest connection with marketing
• Accounting provides operations performance feedback
• Finance influences investments
• Human resources recruits and trains personnel
• Engineering design should match operation’s capabilities

Achieving cross-functional coordination

• Unified strategy, department vision

• Redesigned organizational structure guided by a process view of the organization

• Reward systems consistent with cross-functional goals

• Decision support information systems

• Informal social systems
• Employee selection and promotion
Manufacturing Systems
Manufacturing systems consist of human workers, automation, and various material handling
technologies, configured in ways that create specific manufacturing system typologies. More
specifically, a manufacturing system is a collection of integrated equipment and human resources,
whose function is to perform one or more processing and/or assembly operations on a starting raw
material, part, or set of parts. Our focus in this unit is upon manufacturing systems that are said to
be automated, and so concentration will be put upon the types of integrated equipment that is used
and arranged in a manufacturing cell. This can range from production machines and tools, material
handling and work positioning devices, to the use of various computer systems that facilitate
automation in the production environment.

Types of Manufacturing System

Custom Manufacturing Systems

Custom manufacturing is by far the oldest and most popular type of manufacturing system in
existence. It also happens to be associated with both the highest-quality products and the lowest-
volume efficiency.

In the custom manufacturing system, each item is produced by a single craftsperson, who works
solely by hand or with the help of a machine. When machines are used, they tend to be highly
specialized to their task and cannot produce more than one item at a time.

This system will tend to have the highest unit cost for the product manufactured. As a result,
custom-manufactured products are of the highest quality but are also the most expensive products
in the market.

Intermittent Manufacturing Systems

The intermittent manufacturing system allows companies to make different types of goods using
the same production line. Therefore, the manufacturing facility is designed to handle different
product sizes and requirements. Generally, the goods are processed in lots to fulfill orders.

This system is commonly referred to as a “job shop” due to its popularity in countries with relatively
cheap labor making products for multinationals based thousands of miles away. The goods made
using this manufacturing method are produced in small quantities, so they may not be suitable for
stock. Customization is typically done post-purchase.
This type of system is designed for production runs that happen intermittently, hence the name, or
products that don’t require high volumes. It uses general purpose machines and requires highly
skilled labor.

Continuous Manufacturing Systems

Continuous manufacturing systems are designed to enable the mass production of a single
product. The product goes through an assembly line with different stations where parts are added
or worked on a little further. This method first arose during the Industrial Revolution and is most
closely associated with the Ford Company, which employed the system to produce Model Ts in
the 1920s.

This type of production system is ideal when a company has very high volume targets since it
reduces the unit cost of the product. It does, however, require a massive capital injection at startup
due to the investment in equipment and labor required.

Flexible Manufacturing Systems

Flexible manufacturing is a modern manufacturing system that has become very popular. It
involves a significant investment in machinery, although it reduces labor costs by implementing
robots eschewing human labor altogether. These machines can easily be reconfigured to
manufacture different products in different quantities, and the whole process is automatic.

This method is called flexible manufacturing due to the flexibility in the variety of high-volume goods
it can produce. Due to the automated process, quality control is a lot easier, and unit costs are low.