All elements of your company’s operations–from the project planning and execution stages to sales and marketing–stem from having an effective operations strategy.
These are the critical decisions that key members of your company make about how your products and services will be positioned and ultimately delivered to guarantee the most customer satisfaction.
Without a strategy, the same processes cannot be utilized every time, guaranteed, which can allow your company to fall into disarray.
This guide will explain succinctly what an operations strategy is as well as detail the five most important elements. We’ll also share the benefits of such a strategy, so keep reading!
Table of Contents
What Is an Operations Strategy?
An operations strategy is a type of corporate strategy that can be defined as a set of principles or rules that guide your company’s operational decision-making in all the business choices you make.
It’s an outline and a breakdown of how your business obtains the materials that go into your products and services, which suppliers and distributors you work with, what it takes to design and manufacture products, and what the product delivery process looks like in every operation to meet business objectives.
It’s an overall business strategy that your company can rely on time and again when new operations are afoot. It is also a tool for analyzing the success of your current plan and then executing operations to maximize their effectiveness.
Operational strategies align with a company’s core competency strategy and allow it to devise measures to save time and money. For instance, maybe they cut out a middleman here or begin doing something themselves there.
The outcome remains the same—happy customers receive the products they ordered. With a customer-driven operational strategy, getting from Point A to Point B can be optimized for efficiency and cost-effectiveness.
The Elements of an Operations Strategy
What kinds of elements should go into a working operational strategy? Here are five of them.
Resources
What kinds of resources are needed to pull operations function together according to the rules outlined in the strategy? Resources include any and every kind, including human, mechanical, and locational resources. Companies usually factor in the resources that are already available to them when compiling this element of their operational strategy.
However, depending on the budget, further resources could be purchased or otherwise acquired and then factor into the strategy as well.
Technology
No strategy worth its salt omits technology. We’re asking you to think beyond the scope of office computers running software and take this line of thinking a little bit deeper.
For instance, marketing forecast tools are an excellent example of the technology that helps operational strategies in risk management and meet customer demand. Production line automation is a more advanced means of technology that’s equally as important as machine learning and artificial intelligence.
Through machine learning, a system can become more intuitively intelligent, cutting down on extraneous processes and maximizing output given time.
An industry-specific software like the brewery operations solution Ollie will be your best friend when it comes to tracking the popularity of products that connect best with your customers. Similarly, customer service software will help you manage customer interactions, raise tickets, and resolve issues efficiently, giving you a competitive edge.
Products/Services
All parts of the strategy are to make producing a service or product a more expedient process. Thus, a company will gauge the lifecycle of the average product or service under its name as well as review market trends to determine what the lifecycle of the latest product looks like.
Modifying the product or service according to these data is the key to making goods more efficient.
Read also: The Hidden Dangers of Overstocking And How to Avoid Them
Facilities
What kind of production facilities does your company have available for the manufacturing of products or services? Are all the facilities in operable condition? More so, do they have an inventory management system, safety guidelines and protocols, and clear, reachable production goals?
These are all needed as part of your company’s strategic plan.
Production System
Most important of all is having a production system in place, as this system is used for resource planning in both the interim and longer term. The best production systems consider supply chain management, quality control benchmarks, and workflows.
Read also: How to Master Modern Marketing Strategy Like Netflix
Types of Operations Strategy
Organizations can utilize several types of operations strategies depending on their goals and needs. Here are some.
Core Competencies Strategy
Core competencies strategies focus on the organization’s strengths and competitive advantages. These strengths can be employees, work culture, best-selling products, resource management, brand equity, etc. These strategies plan to better utilize these strengths while trying to improve upon or minimize the effects of the weaknesses.
Outsourcing Strategy
The outsourcing strategy complements the core competencies strategy well. With an outsourcing strategy, an organization focuses more resources on its strengths while outsourcing its weak areas to other individuals or companies.
Competitive Priorities Strategy
Competitive priority strategies focus on an organization’s specific capabilities that will differentiate it in the market. Some of the competitive priorities an organization can focus on are cost, quality, flexibility, innovativeness, and delivery performance. It’s challenging to give equal attention to each aspect so companies often prioritize which ones to focus on.
Corporate Strategies
A corporate strategy is an overall strategy that focuses on a company’s long-term goals. Depending on the goals, which can be growth, expansion, sustainability, etc., this strategy can focus on market research, allocating resources, partnerships, etc.
Cost-Driven Strategies
Cost-driven strategies focus on optimizing the production process and other operational processes to minimize the cost of the product so that more people buy it. This strategy targets price-sensitive customers who prioritize affordability over brand loyalty or additional features.
Read also: 9 Customer Management Strategies to Supercharge Customer Loyalty
The Advantages of Having an Operations Strategy
Putting together an operations strategy isn’t an overnight process, but it’s worth expending time and effort into creating. Here are some benefits of doing such.
Helps to break down department silos
If your company has many departments that rarely intersect, an operational strategy will help create a more seamless cohesion between departments when the need arises.
These departments will have a roadmap to follow to work together. When everyone works as a unit, operational efficiency increases, and they can produce more comprehensively while achieving key performance indicators, thus boosting revenue.
Read also: 7 Proven Ways to Defeat Silo Mentality at the Workplace
Makes better utilization of resources
Resources are precious things and should be treated as such. To allocate resources wisely and ensure that nothing is wasted, an operational strategy comes very much in handy.
Resources can be redirected, canceled, increased, or reduced depending on the needs of the operations of your business. The costs of certain resources can be more clearly understood as well, which will help cut down on any needless waste.
Boosts efficiency and productivity
Employees are also bolstered by a strong operations strategy. A good strategy made by an operations manager significantly improves project management by providing a clear framework and direction. Each employee division will have clear-cut goals to abide by and team managers who will guide these divisions to success.
The overarching organizational goals will keep teams motivated to do their best and work cooperatively with others as they have to. Employees will use their skills and time better than they have in the past, increasing output, working more efficiently, and feeling like they’re doing more fulfilling work. This will directly contribute to a better customer experience as fulfilled employees will deliver better work quality.
Read also: Operational CRM — A Complete Guide (+7 Best Tools)
Conclusion
Operations strategies are crucial in planning out your business processes from start to finish. If you need additional training, an executive education can help you with business operations strategy. The specifics of operations strategies will vary, but they should follow the basic guidelines that we outlined in this blog post.
By putting together an operational strategy focused on continuous improvement, you’re investing not only in the present but the future of your company as well. That’s a decision that all employees and staff can feel good about 🙂
If you’re looking for an all-in-one marketing automation and sales CRM to keep track of your business operations, check out EngageBay.
Content updated for freshness and SEO by Swastik Sahu.
