Process Improvement and Operations: Strategic Alignment for Business

This report delves into the critical importance of process improvement and strategic alignment in maintaining effective business operations. It emphasizes the direct link between business strategy and operational capabilities, illustrating how companies like Nike must align their production processes with their strategic goals to achieve market leadership and competitive advantages. The report explores challenges such as communication barriers between management and employees, highlighting the need for two-way communication to inform strategic decision-making. It then introduces two strategic models: Hoshin Kanri, a four-step process (Plan, Do, Check, Act), and the closed-loop management system. These models are illustrated with examples, such as Nike's shoe production and Toyota's use of recycled materials. The report concludes that employee involvement is essential for the successful implementation of a company's mission and vision, supported by references to various books and journals that underpin the concepts discussed.

Process Improvement, Maintaining Operations

Contents
Contents...........................................................................................................................................2
MAIN BODY...................................................................................................................................3
REFERENCES................................................................................................................................6

MAIN BODY
It is essential for every company to maintain and align their business operations with the
strategy company have planned in the starting as then only optimum utilisation of available
resources would be achieved by them (Slack and Brandon-Jones, 2018). Main reason behind this
is operations is directly linked with the strategy of any company and if any of these changes then
it will also have a positive or negative impact on other aspects. For instance, if Nike company
has planned to produced 10000000 shoes in a year by which they would be able to become
market leader. This strategy is achievable until and unless, business operations is moulded
according to the strategy planned (Wang and et al., 2017). As if company does not have
machinery which can produce 10000000 pair of shoes or do not have proper human resource for
it. Then strategy as well as operations fails as both are not align to each other. So if any company
wants to gain competitive advantage over other competitors then it is important for company to
make their strategy by considering their operations and its capability.
Above mentioned problem arises because there is no proper communication between
management and employees due to which executives has set unrealistic target for them. Strategic
management refers to a process of setting goals and objectives of the company by analysing and
considering available resources capabilities and productivity so that edge over other competitors
would be gain by them (Bevilacqua, Ciarapica and De Sanctis, 2017). Available resources
consist of machinery, equipment, human resources, skills, system, knowledge etc. There are
many issues faced by companies while implementing strategic management in business
operations like barrier in communication. Communication plays an essential role in the success
of any strategy as if two way communications is between employees and management then it
becomes easier for management to make strategies by considering internal environment which
employees is more aware of (Kletz and Amyotte, 2019).
For instance, Nike executives have order their subordinates and employees to cut
production cost by 10% in a year by any means so that overall profitability would be improved.
But inflation and increase in fuel prices is the reason behind increase production cost which
management is not aware of. So if management has involved employees while making their
strategies then strategic plan issues might have been avoided by them. So there are two strategic
model which could be used by company to implement strategic management process in their
operations which is explained below,

Hoshin Kanri comprises of four different steps i.e., Plan, Do, Act, Check. In the first step,
company plan their future plan and what they wanted to achieve in a coming fiscal year (Uphoff,
2019). Then all the available resources are accumulated and work started to achieve pre-set
mission. After that, continuous monitoring and analysis of operations is required so that progress
of it would be checked. Last step it to check that has they achieved the target or not or what
company could have done better etc. For instance, Nike is planning to launch Run Flyknit Mens
shoes in Finland within one month and requires at least 10,000 shoes before entering. So now
company will arrange their machinery, equipment’s, human resources etc according to the
requirements and plan to make 2500 per week so that 10,000 shoes would be made at the end of
month. Now it’s the responsibly of management and manager to check production process per
week and then analysed what they have planned and what they have got. If there is any
difference then company needs to resolve this on a urgent basis so that target would be achieved
through optimum utilisation of resources.
Closed loop management system is another way of align strategy with the operations of
company. In the first stage, strategy is planned by management by conducting strategic analysis
so that mission, vision would be clearly set. In second stage, strategy is translated in business
operation through setting target for each and every departments and accumulating list of
resources requires to achieve the mission (Qi and et al., 2017). After that, sales plan, budget,
planning of resources etc is done so that company could run their operations on the basis of it.
Then continuous monitoring of planning and working of employees is done by conducting
operational and strategy reviews so that problems faced by employees while working would be
analysed and eliminate accordingly. At last, various analysis like profitability analysis, strategy
correlation analysis etc is done by company so that overall profit or loss of the strategy is
calculated which will help the management to make their strategy by considering every aspects
they have faced in the past (Maskell, Baggaley and Grasso, 2017).
For instance, Toyota wants to create niche market in the automobile industry so that more
customers would be acquired by them resulting in increase in revenue and profitability. So with
the help of employees, management has decided to make new cars in which only recycle product
would be use as a raw material. Main idea behind company is to earn higher return on investment
on their product as Toyota does not have to procure raw materials from the strategy which will
automatically save their money. In the next stage, Toyota will plan their resources like number of

old cars they requires to make new and limited slot of product, human resources required to
make the product, machinery, equipment’s etc. After that, selling price of the product, target for
sales person, marketing budget will be set so that Toyota can identify their profit margin in the
starting only. Continuous monitoring by manager and management will be done in the latter part
so that employee’s motivation and productivity would remain higher by resolving their problem.
At last, cost price of the product and selling price which company have set will be checked and if
CP is greater than SP then Toyota needs to identify factors due to which they could not be able to
achieve their strategy and try to rectify while making other product. It can be concluded in the
last that employees involvement is mandatory for any company id they want to attain their
mission and vision (Harmon, 2019).

REFERENCES
Books and Journals
Bevilacqua, M., Ciarapica, F.E. and De Sanctis, I., 2017. Lean practices implementation and
their relationships with operational responsiveness and company performance: an Italian study.
International Journal of Production Research, 55(3), pp.769-794.
Harmon, P., 2019. Business process change: a business process management guide for managers
and process professionals. Morgan Kaufmann.
Kletz, T. and Amyotte, P., 2019. What went wrong?: case histories of process plant disasters and
how they could have been avoided. Butterworth-Heinemann.
Maskell, B.H., Baggaley, B. and Grasso, L., 2017. Practical lean accounting: a proven system for
measuring and managing the lean enterprise. Productivity Press.
Qi, Y., Huo, B., Wang, Z. and Yeung, H.Y.J., 2017. The impact of operations and supply chain
strategies on integration and performance. International Journal of Production Economics, 185,
pp.162-174.
Slack, N. and Brandon-Jones, A., 2018. Operations and process management: principles and
practice for strategic impact. Pearson UK.
Uphoff, N., 2019. Improving international irrigation management with farmer participation:
Getting the process right. Routledge.
Wang, F., Xu, H., Xu, T., Li, K., Shafie-Khah, M. and Catalão, J.P., 2017. The values of market-
based demand response on improving power system reliability under extreme circumstances.
Applied energy, 193, pp.220-231.