SME Operation Guide - 2. Operations Strategy Development
Updated: Sep 1
2. Operations Strategy Development
Operational strategy is a multifaceted approach that begins with setting a clear vision aligned with the company's broader objectives. It emphasizes measurable outcomes through KPIs, efficient supply chain management, and strategic facility placement. Sustainable practices, quality management, and advanced technologies further optimize operations. Tailored job designs, accurate demand forecasting, and continuous improvement are vital components. The strategy rounds off with effective human resource alignment and robust external interfaces, ensuring a comprehensive blueprint for operational success.
Vision & Goals Setting: Direct and purpose the operations team with clear, short and long-term targets using SWOT analysis and the SMART goal framework.
Alignment with Broader Company Strategy: Integrate operational goals with the company's mission, using stakeholder interviews and cross-departmental workshops to drive business goals.
Establishing KPIs: Measure operational success using metrics that reflect operations' health, implementing tools like the Balanced Scorecard and Performance Dashboard.
Capacity Planning: Balance resource allocation and output to meet demand, leveraging forecasting models and the Lead-Lag strategy.
Supply Chain Management: Guarantees a smooth flow of goods and services, handling logistics, inventory, and supplier relations with techniques like Vendor management and JIT inventory.
Facility Location: Strategically place facilities considering geographical, economic, and logistical factors using the Factor-rating system and cost-profit-volume analysis.
Process Design and Layout: Organize for peak production by aligning facilities and resources, employing methods such as cellular layouts and product-oriented layouts.
Sustainability and Green Operations: Uphold environmentally friendly operations, emphasizing waste reduction and green sourcing techniques.
Service Operations: Oversee intangible product processes, balancing service quality and efficiency using service blueprinting and queuing models.
Quality Management: Achieve consistent product or service quality using Total Quality Management (TQM) and Statistical Process Control (SPC).
Maintenance and Reliability: Ensure machinery functionality and availability, prioritizing preventive maintenance techniques and reliability analysis.
Inventory Management: Efficiently balance raw materials, in-process goods, and finished products using Economic Order Quantity (EOQ) and ABC analysis.
Job Design and Work Measurement: Optimize task arrangements for performance and satisfaction, utilizing techniques such as time studies and work sampling.
Demand Forecasting: Predict future sales using data-driven methods like qualitative approaches and time series analysis.
Technology and Automation: Incorporate the latest technologies to enhance operational efficiency, utilizing tools like Computer-Aided Design (CAD) and Flexible Manufacturing Systems (FMS).
Human Resource Strategy in Operations: Align HR capabilities with operational needs, emphasizing skill development programs and flexible work schedules.
Continuous Improvement: Regularly refine processes using methodologies like Kaizen and the PDCA cycle.
Customer and Supplier Interfaces: Streamline external interactions, from procurement to feedback, leveraging feedback loops and Supplier Relationship Management (SRM).