Operations strategy refers to the long-term plan and decisions that an organization makes to achieve its

overall business goals through its operations. It involves aligning the operations of the company with its
business strategy to create competitive advantages and ensure efficiency, quality, and customer
satisfaction. Here are the key elements of operations strategy:

1. **Capacity Planning**: Deciding the amount of production capacity needed to meet demand. This
includes decisions on facility size, location, and the scale of operations.

2. **Supply Chain Management**: Managing the flow of goods, services, and information from
suppliers to customers. It involves decisions on sourcing, procurement, logistics, and inventory
management.

3. **Process Design and Improvement**: Developing efficient processes for production or service
delivery, and continuously improving them to enhance productivity and quality.

4. **Technology Strategy**: Choosing the right technologies to support operations, including

automation, information systems, and production technologies.

5. **Product and Service Design**: Aligning product or service offerings with market demand, ensuring
they are designed for efficient production and delivery.

6. **Quality Management**: Implementing systems to ensure that products or services meet customer
expectations and regulatory requirements, such as Total Quality Management (TQM) or Six Sigma.

7. **Human Resources and Workforce Management**: Ensuring that the workforce is capable,
motivated, and aligned with the company’s operational goals. This includes training, job design, and
workforce planning.

8. **Cost Management**: Controlling and reducing costs to improve profitability while maintaining or
improving quality and service levels.

9. **Sustainability and Social Responsibility**: Incorporating environmentally and socially responsible

practices into operations to meet regulatory requirements and customer expectations.

10. **Innovation and Flexibility**: Adapting operations to changes in the market, such as new customer
needs, technological advancements, or competitive pressures.

Operations strategy plays a critical role in achieving business success by ensuring that the company’s
operations are efficient, responsive, and aligned with its overall goals.
What Is an Operations Strategy? Definition and Benefits

Written by: Indeed Editorial Team

Updated August 16, 2024

Businesses that produce goods and services often rely on a system that optimizes the use of resources,
people and processes. Ensuring the system works efficiently and toward the organization's overall goals
is a priority for many businesses. Having an operations strategy in place can be helpful in the planning of
processes and tasks and aligning them with the larger goals of your organization. In this article, we
discuss what an operations strategy is along with the benefits of having one and key success factors.

What is an operations strategy?

An operations strategy is a set of decisions an organization makes regarding the production and
delivery of its goods. Organizations may consider each step they take toward manufacturing or
delivering a product an operation, and all decisions regarding these various operations are the
operations strategy. An organization's operations strategy works in tandem with its overall business
strategy, helping the organization to achieve its long-term goals and improve competitiveness in the
marketplace.

For example, a company that produces and sells computers may have the following operations:

Obtaining materials

Working with suppliers

Designing new computers

Manufacturing computer designs

Managing employees

Delivering finished computers to sellers or consumers

Benefits of having an operations strategy

There are several benefits to having an operations strategy within your business or organization, such
as:

Employee efficiency
Operations strategies define the goals of different departments, which lets team managers and
employees know what they are working toward. An operations strategy can help to ensure any
employee that contributes to an operation uses their time and skills efficiently. In addition, organization
leaders can learn which departments are operating efficiently and which may need improvement.

Resource management

Organizations often have a finite amount of resources, making it essential that they use them efficiently.
Operations strategies can help leaders determine which areas of the organization need the most
resources and how to best deliver those resources. By developing an operations strategy, leaders can
learn more about the costs of running different departments. They can then analyze these costs and see
if they are in line with the organization's overall goals.

Department cooperation

An operations strategy details how multiple departments within an organization work together. By
outlining this coordination, each department knows how it relates to the others. They can also see how
their individual department's goals are helping to achieve the overall goals of the organization alongside
the other departments. This is useful for improving decision-making and helping employees in different
departments feel like they are on the same team.

Elements of an operations strategy

The typical elements of an operations strategy are:

Products and assembly

Product operations managers look to streamline processes, such as team communication or product
assembly. They also analyze data regarding their products and use it to prioritize tasks. For example,
they may help product managers decide which elements of a product to build first. Product operations
teams work with departments such as manufacturing, customer support and sales to help optimize the
process consumers go through with the product, from researching to becoming repeat customers.

Delivering and storing inventory

An inventory operations strategy is one that helps businesses decide how to order, maintain and process
their inventory. It looks for more efficient ways to deliver or store inventory, with the goal of reducing
costs and waste. An inventory operations strategy also aims to order the optimal number of goods,
maximizing storage capacity without wasting resources.

Supply chain optimization

The supply chain element of an operations strategy looks for ways to optimize the movement of
products from suppliers to distributors. It may do this in several ways, for example, implementing faster
communication technology or optimizing shipping amounts. In a supply chain operations strategy,
leaders decide on the structure of the supply chain and the activities of each stage. They also decide
where to make products and where to store them.

Quality of the final product

Quality operations aim to produce a satisfactory final product. This includes product testing and
analyzing customer feedback. They also check for consistency so their customers all receive the same
level of quality. In addition, quality operations managers analyze the operations that contribute to
production. For example, they ensure the organization is using the best materials for a high-quality
finished product. They constantly monitor the production process to ensure it is leading to their desired
quality outcomes.

Scheduling use of resources

Scheduling is the timing and use of resources, and this means ensuring the organization is using its
resources at the best possible time. This may include the best time to send out shipments of products or
which activities employees should focus on first.

A common challenge for those working in scheduling operations is finding a compromise between
competing goals in terms of shared resources. For example, both the product development and
customer satisfaction teams may want to conduct a focus group, but your organization only has the
resources to host one at a time. Within your operations plan, you would determine the optimal
scheduling for these two departments.

Facilities management

Facilities planning and management is the analysis of how the organization's current facilities factor into
the organization's goals. This part of your operations strategy determines if your current facilities are
performing as needed. In addition, it also discovers if your organization needs new facilities and if so, it
conducts a search to find the right ones.

Forecasting for planning

Forecasting operations is where an organization makes plans for the future. It uses data to make
assumptions about the future of the organization. For example, it may study current sales trends to
determine profits in a year. It then implements changes within the organization to ensure it is always
moving toward its goals. For example, if a forecaster determines a drop in sales because of economic
factors that may happen in six months, they may look for ways to reduce costs now to prepare them for
this situation.

Key success factors for operations strategies

Key factors to consider throughout any operations strategy include:

Goals: You can establish a goal for every operation to give the operation direction and may help you
with decisions regarding the operation, which may help achieve the larger goals of the organization.

Employees: Most operations have employees who perform them. Having the right employees for each
task can improve the quality of the finished task. Whenever you are analyzing an operation, you can look
to see who works on it and for ways to improve their ability to do their job well.

Innovation: Innovation can help organizations find better ways to operate and potentially gain an
advantage over their competitors. Within every operation, it's a good idea to look for areas where you
can innovate. You can encourage operations managers to try new processes and then analyze the
results.

Analysis: All operations require regular analysis, and with analysis, you can learn which operations are
running well and which need improvement. Consider implementing a system for regular analysis in each
section of your operations strategy by having members of each operation analyze themselves, or
establish a separate department to analyze all the other operations.
An operations strategy is a set of decisions an organization makes regarding the production and delivery
of its goods. Organizations may consider each step they take toward manufacturing or delivering a
product an operation, and all decisions regarding these various operations are the operations strategy.

What are the four elements of operations strategy?

The four elements of operations strategy include capacity planning, supply chain optimization, quality
control, and technology and innovation. Each of these elements are essential to streamlining business
processes and improving overall performance.

What are the 4 perspectives of operations strategy?

When formulating an operations strategy, there are four main influences or perspectives to
consider. The top down business perspective, the market perspective, the competitors' perspective, and
the perspective from within operations itself.

What are the 5 P's of operation strategy?

The 5P Approach

Plan. It is generally advisable for businesses to establish an anticipatory action plan to equip for any
unforeseen internal or external developments.

Process. Conventional change management is often considered a one-off, monumental endeavor.

People.

Possessions.

Profits.

What is the framework of operations strategy?

Terry Hill's operations strategy model provides an iterative framework that links together corporate
objectives. The five steps of his framework involve: Corporate objectives, marketing strategy, win
orders, delivery system choice, and infrastructure choice.

What is the operations strategy of a project?

An operations strategy is essential for any company that delivers professional services and client
projects. It provides a framework for developing competitive strategies around key success factors like
resource utilization, customer relationships, and service delivery