Mercedes Benz Operation
Operation05341_02_ch02_p021-044.qxd
9/25/07
10:01 AM
Page 21
CHAPTER 2
OPERATIONS, STRATEGY AND OPERATIONS STRATEGY
INTRODUCTION
An organization’s operations function is concerned with getting things done; producing goods and/or services for customers. Chapter 1 pointed out that operations management is important because it is responsible for managing most of the organization’s resources. However, many people think that operations management is only concerned with short-term, day-to-day, tactical issues. This chapter will seek to correct that view by considering the strategic importance of operations. All business organizations are concerned with how they will survive and prosper in the future. A business strategy is often thought of as a plan or set of intentions that will set the long-term direction of the actions that are needed to ensure future organizational success. However, no matter how grand the plan, or how noble the intention, an organization’s strategy can only become a meaningful reality, in practice, if it is operationally enacted. An organization’s operations are strategically important precisely because most organizational activity comprises the day-to-day activities within the operations function. It is the myriad of daily actions of operations, when considered in their totality that constitute the organization’s long-term strategic direction. The relationship between an organization’s strategy and its operations is a key determinant of its ability to achieve long-term success or even survival. Organizational success is only likely to result if short-term operations activities are consistent with long-term strategic intentions and make a contribution to competitive advantage. The relationship between operations and the other business functions is similarly important. The objective of the operations function is to produce the goods and services required by customers whilst managing resources as efficiently as possible. This can lead
9/25/07
10:01 AM
Page 21
CHAPTER 2
OPERATIONS, STRATEGY AND OPERATIONS STRATEGY
INTRODUCTION
An organization’s operations function is concerned with getting things done; producing goods and/or services for customers. Chapter 1 pointed out that operations management is important because it is responsible for managing most of the organization’s resources. However, many people think that operations management is only concerned with short-term, day-to-day, tactical issues. This chapter will seek to correct that view by considering the strategic importance of operations. All business organizations are concerned with how they will survive and prosper in the future. A business strategy is often thought of as a plan or set of intentions that will set the long-term direction of the actions that are needed to ensure future organizational success. However, no matter how grand the plan, or how noble the intention, an organization’s strategy can only become a meaningful reality, in practice, if it is operationally enacted. An organization’s operations are strategically important precisely because most organizational activity comprises the day-to-day activities within the operations function. It is the myriad of daily actions of operations, when considered in their totality that constitute the organization’s long-term strategic direction. The relationship between an organization’s strategy and its operations is a key determinant of its ability to achieve long-term success or even survival. Organizational success is only likely to result if short-term operations activities are consistent with long-term strategic intentions and make a contribution to competitive advantage. The relationship between operations and the other business functions is similarly important. The objective of the operations function is to produce the goods and services required by customers whilst managing resources as efficiently as possible. This can lead