Sustainable Organization Growth and Profitability through Model-based strategy and operations Management
Most organizations are in business to survive, grow and thrive. This requires organizations to effectively manage strategy and operations simultaneously. Operations management is concerned with running the business while strategy management is concerned with improving the business. Strategy and operations management involve strategic decision-making, and operational decision-making respectively; both differ substantially and require different skill sets. Model-based approach to strategy and operations management enables effective interplay of strategic decisions and decision-making with operational decisions and decision-making thus enabling sustainable organization growth and profitability.
Model-Based Viable Strategy Design
The notion of a strategy as a set of goals and major policies, while is easy to grasp, determining a viable strategy design and working out an agreed-upon documented statement can be challenging, but documenting has fundamental contribution to the future success of the organization.
Managers must identify precisely what is meant by a goal and a major policy in order to document a strategy statement. A model-based approach to strategy design that supports strategy statement documentation helps managers clarify the strategic goals i.e., mission goals, vision goals, and how the company intends to conduct its business to be profitable. Policies are part of a statement of objectives provide concrete expressions of the abstract strategic goals and satisfies the needs of the significant groups - employees, stakeholders, etc., that cooperate to keep the organization alive.
Documenting the strategy statement makes the strategy explicit, and ensures strategy determination does not degenerate into solemn recording of platitudes, useless for either the clarification of direction or achievement of consensus.
Model-Based Strategy Execution Analysis
Strategies have to be implemented and executed to be realized, and for it to be of any use to an organization. The realized/actual strategy is a combination of the executed part of the intended or planned strategy and emergent strategy - unplanned, as-needed reactions to unanticipated developments.
Strategy implementation is concerned with the development of a comprehensive plan that clearly outlines the objectives for execution and the activities and resources needed. Strategy execution objectives are translation of implemented strategy into day-to-day management tasks; and creating "fits" to close the implementation gap. Strategy execution is a decision-making process concerned with improving the company's position.
Model-based evaluation of the realized strategy provides feedback to inform management's decision on strategy viability, consistency, feasibility, timing and flexibility in closing the strategy implementation gap.
Model-Based Operations System Design
Operations management is both strategic and operational. Strategically, it involves long-term planning and structuring of work to establish effective capacity of production systems for goods and services. The Operations function, as a subsystem in the organization, is responsible for managing the resources needed to create and deliver value to the organization's customers utilizing the Operations System to ensure the best use of the organization's resources
The Operations System is the joint configuration of resources and processes such that the resulting competencies are aligned with the organization's desired competitive position. The Operations System is utilized to provide the best match of supply (capacity) with demand.
Operations management decisions in determining effective capability for producing goods and services for a given product mix can be supported and informed by the simulation results of the organization's Operations System model.
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