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Superior Operations Management, a Competitive Advantage

Operations management deals with the challenge of using people, processes and technology to execute a business strategy. Weather the market strategy is a low cost or a diversification one, operations management is the set of practices and tools that ensure the actual delivery on the promise made to a customer.

So it’s about managing the so called operational capabilities: processes, people, and technology employed to execute operations strategy to transform resources in products and services that a customer might buy. There are ways to improve each of the operational capabilities and many companies are competitive because their operations are run in a better way.

Lean thinking and Six-sigma methodologies reduce waste and defects in the process, sometimes being used simultaneously. Humans are complex creatures and even with automation they will be the core of operations since they are better with non-standard tasks and human interaction is preferred by clients. But the issue here is also deciding on performing the actual work in the company or outsourcing it. In the end it’s about focusing on the core competencies.

Technology should be just an enabler, don’t focus your business on a technology. It’s easy to copy, and other will do it if you are not able to define your competitive advantage based on other components of your operations management. It’s obviously good if it helps you make sense out of complex data, helps to see a process and its performance and lightens the load and speeds up the work. But, don’t let technology drive your strategy.

One final point is on scaling up an operation that work. It’s not an easy task and they might ruin a business if operations challenges are not taken into consideration. Opening more locations, diversifying product and services and expanding production capacities should be dealt with extreme caution. If you have a good service clients will come, but with numbers complexity increases and scaling up is not always a success.