case study on operations strategy

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Operations strategy

• Business management
• Operations and supply chain management
• Supply chain management

How Loyalty Programs Are Saving Airlines

• So Yeon Chun
• Evert de Boer
• April 02, 2021

The Latest Supply Chain Disruption: Plastics

• Bindiya Vakil
• March 26, 2021

Raising Wages Is the Right Thing to Do, and Doesn’t Have to Be Bad for Your Bottom Line

• April 18, 2019

Getting Control of Just-in-Time

• Uday Karmarkar
• From the September–October 1989 Issue

Will You Survive the Services Revolution?

• June 01, 2004

Keeping Work Organized when Your Team Is Fragmented

• February 07, 2013

4 Steps to Sustaining Improvement in Health Care

• Kedar S Mate
• Jeffrey Rakover
• November 09, 2016

Experiments: Small, Bigger, Biggest

• Heather Figallo
• April 17, 2019

Are You Having Trouble Keeping Your Operations Focused?

• Robert S. Huckman
• From the September 2009 Issue

Speed Up Your Product Development Without Losing Control

• July 15, 2014

Hospitals Can’t Improve Without Better Management Systems

• John S. Toussaint
• October 21, 2015

Learning Across Lines: The Secret to More Efficient Factories

• Michael A. Lapre
• Luk N. Van Wassenhove
• From the October 2002 Issue

Coupling Strategy to Operating Plans

• John M. Hobbs
• Donald F. Heany
• From the May 1977 Issue

Read a Plant--Fast

• R. Eugene Goodson
• From the May 2002 Issue

The Department of Mobility

• Rex Runzheimer
• From the November 2005 Issue

The CEO of General Electric on Sparking an American Manufacturing Renewal

• Jeffrey R. Immelt
• From the March 2012 Issue

Which Products Should You Stock?

• Marshall Fisher
• Ramnath Vaidyanathan
• From the November 2012 Issue

Health Systems Need to Completely Reassess How They Manage Costs

• Jeff Goldsmith
• November 15, 2018

Is Your Supply Chain Ready for the Congestion Crisis?

• George Stalk, Jr.
• Petros Paranikas
• June 22, 2015

Why Doctors Shouldn't Be Afraid of Online Reviews

• Vivian S Lee
• March 29, 2016

• Edmund P. Learned
• Ralph M. Hower
• March 01, 1953

Lean as a Universal Model of Excellence: It Is Not Just a Manufacturing Tool!

• Elliott N. Weiss
• Donald Stevenson
• Austin English
• December 14, 2016

Air Canada - Risk Management

• Craig Dunbar
• December 14, 2010

Novo Nordisk A/S: Designing for Diabetics, Epilogue

• Karen J. Freeze
• January 01, 1995

Riverside Hospital's Pharmacy Services

• Anne Snowdon
• Hannah Standing Rasmussen
• December 12, 2011

Gera Developments: Leadership at a Crossroads

• Christina R. Wing
• July 23, 2020

Hamilton's Electronics Services, Inc.

• Luann J. Lynch
• E. Richard Brownlee II
• September 19, 2016

Sitting Pretty: Managing Customer-Driven Innovation at Faurecia Car Seating

• Francis Bidault
• Alessio Castello
• March 29, 2007

When Supply Is of Public Interest: Roche & Tamiflu

• Noel Watson
• Laura Rock Kopczak
• Prashant Yadav
• January 15, 2009

Boeing 787: Manufacturing a Dream

• Rory McDonald
• Suresh Kotha
• February 12, 2015

Poland's A2 Motorway

• Benjamin C. Esty
• Michael Kane
• December 18, 2001

CaLNG: Peak Shaving to Alleviate a Supply-Demand Bottleneck

• Sunil Chopra
• Nikolay Osadchiy
• July 29, 2021
• John R. Wells
• Gabriel Ellsworth
• March 31, 2016

Merging American Airlines and US Airways (A)

• David G. Fubini
• David A. Garvin
• Carin-Isabel Knoop
• January 06, 2017

Delta Airlines and the Trainer Refinery

• Andrew Inkpen
• Michael Moffett
• February 18, 2013

Production Planning at Viktor Lenac Shipyard

• David Currie
• Giorgio Sinkovic
• November 23, 2004

Allianz Turkey: Focus on the Customer (B)

• W. Earl Sasser Jr.
• Gamze Yucaoglu
• November 19, 2015

Sustainability at Millipore

• Michael W. Toffel
• Katharine Lee
• July 23, 2009

Madison Avenue: Digital Media Services (B)

• Steven J. Spear
• Anne D. Karshis
• June 22, 2001

Xerox: Design for the Environment

• Richard H.K. Vietor
• Fiona E.S. Murray
• January 07, 1994

Best Value Supply Chains: A Key Competitive Weapon for the 21st Century

• David Ketchen Jr.
• William Rebarick
• G. Tomas M. Hult
• David Meyer
• May 15, 2008

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Operations →

• 01 Apr 2024
• In Practice

Navigating the Mood of Customers Weary of Price Hikes

Price increases might be tempering after historic surges, but companies continue to wrestle with pinched consumers. Alexander MacKay, Chiara Farronato, and Emily Williams make sense of the economic whiplash of inflation and offer insights for business leaders trying to find equilibrium.

• 22 Mar 2024
• Research & Ideas

Open Source Software: The $9 Trillion Resource Companies Take for Granted

Many companies build their businesses on open source software, code that would cost firms $8.8 trillion to create from scratch if it weren't freely available. Research by Frank Nagle and colleagues puts a value on an economic necessity that will require investment to meet demand.

• 27 Feb 2024
• Cold Call Podcast

How Could Harvard Decarbonize Its Supply Chain?

Harvard University aims to be fossil-fuel neutral by 2026 and totally free of fossil fuels by 2050. As part of this goal, the university is trying to decarbonize its supply chain and considers replacing cement with a low-carbon substitute called Pozzotive®, made with post-consumer recycled glass. A successful pilot project could jump start Harvard’s initiative to reduce embodied carbon emissions, but it first needs credible information about the magnitude and validity of potential carbon reductions. Harvard Business School professor emeritus Robert Kaplan and assistant professor Shirley Lu discuss the flow of emissions along the supply chain of Harvard University’s construction projects, the different methods of measuring carbon emissions, including the E-liability approach, and the opportunity to leverage blockchain technology to facilitate the flow of comparable and reliable emissions information in the case, “Harvard University and Urban Mining Industries: Decarbonizing the Supply Chain.”

• 02 Jan 2024

10 Trends to Watch in 2024

Employees may seek new approaches to balance, even as leaders consider whether to bring more teams back to offices or make hybrid work even more flexible. These are just a few trends that Harvard Business School faculty members will be following during a year when staffing, climate, and inclusion will likely remain top of mind.

• 12 Dec 2023

COVID Tested Global Supply Chains. Here’s How They’ve Adapted

A global supply chain reshuffling is underway as companies seek to diversify their distribution networks in response to pandemic-related shocks, says research by Laura Alfaro. What do these shifts mean for American businesses and buyers?

• 25 Apr 2023

How SHEIN and Temu Conquered Fast Fashion—and Forged a New Business Model

The platforms SHEIN and Temu match consumer demand and factory output, bringing Chinese production to the rest of the world. The companies have remade fast fashion, but their pioneering approach has the potential to go far beyond retail, says John Deighton.

• 21 Apr 2023

The $15 Billion Question: Have Loot Boxes Turned Video Gaming into Gambling?

Critics say loot boxes—major revenue streams for video game companies—entice young players to overspend. Can regulators protect consumers without dampening the thrill of the game? Research by Tomomichi Amano and colleague.

• 11 Apr 2023

A Rose by Any Other Name: Supply Chains and Carbon Emissions in the Flower Industry

Headquartered in Kitengela, Kenya, Sian Flowers exports roses to Europe. Because cut flowers have a limited shelf life and consumers want them to retain their appearance for as long as possible, Sian and its distributors used international air cargo to transport them to Amsterdam, where they were sold at auction and trucked to markets across Europe. But when the Covid-19 pandemic caused huge increases in shipping costs, Sian launched experiments to ship roses by ocean using refrigerated containers. The company reduced its costs and cut its carbon emissions, but is a flower that travels halfway around the world truly a “low-carbon rose”? Harvard Business School professors Willy Shih and Mike Toffel debate these questions and more in their case, “Sian Flowers: Fresher by Sea?”

• 28 Mar 2023

The FDA’s Speedy Drug Approvals Are Safe: A Win-Win for Patients and Pharma Innovation

Expediting so-called breakthrough therapies has saved millions of dollars in research time without compromising drug safety or efficacy, says research by Ariel Stern, Amitabh Chandra, and colleagues. Could policymakers harness the approach to bring life-saving treatments to the market faster?

• 31 Jan 2023

Addressing Racial Discrimination on Airbnb

For years, Airbnb gave hosts extensive discretion to accept or reject a guest after seeing little more than a name and a picture, believing that eliminating anonymity was the best way for the company to build trust. However, the apartment rental platform failed to track or account for the possibility that this could facilitate discrimination. After research published by Professor Michael Luca and others provided evidence that Black hosts received less in rent than hosts of other races and showed signs of discrimination against guests with African American sounding names, the company had to decide what to do. In the case, “Racial Discrimination on Airbnb,” Luca discusses his research and explores the implication for Airbnb and other platform companies. Should they change the design of the platform to reduce discrimination? And what’s the best way to measure the success of any changes?

• 29 Nov 2022

How Much More Would Holiday Shoppers Pay to Wear Something Rare?

Economic worries will make pricing strategy even more critical this holiday season. Research by Chiara Farronato reveals the value that hip consumers see in hard-to-find products. Are companies simply making too many goods?

• 18 Oct 2022

Chewy.com’s Make-or-Break Logistics Dilemma

In late 2013, Ryan Cohen, cofounder and then-CEO of online pet products retailer Chewy.com, was facing a decision that could determine his company’s future. Should he stay with a third-party logistics provider (3PL) for all of Chewy.com’s e-commerce fulfillment or take that function in house? Cohen was convinced that achieving scale would be essential to making the business work and he worried that the company’s current 3PL may not be able to scale with Chewy.com’s projected growth or maintain the company’s performance standards for service quality and fulfillment. But neither he nor his cofounders had any experience managing logistics, and the company’s board members were pressuring him to leave order fulfillment to the 3PL. They worried that any changes could destabilize the existing 3PL relationship and endanger the viability of the fast-growing business. What should Cohen do? Senior Lecturer Jeffrey Rayport discusses the options in his case, “Chewy.com (A).”

• 12 Oct 2022

When Design Enables Discrimination: Learning from Anti-Asian Bias on Airbnb

Airbnb bookings dropped 12 percent more for hosts with Asian names than other hosts during the early months of the COVID-19 pandemic, says research by Michael Luca. Could better design deter bias, particularly during times of crisis?

• 22 Aug 2022

Can Amazon Remake Health Care?

Amazon has disrupted everything from grocery shopping to cloud computing, but can it transform health care with its One Medical acquisition? Amitabh Chandra discusses company's track record in health care and the challenges it might face.

• 12 Jul 2022

Can the Foodservice Distribution Industry Recover from the Pandemic?

At the height of the pandemic in 2020, US Foods struggled, as restaurant and school closures reduced demand for foodservice distribution. The situation improved after the return of indoor dining and in-person learning, but an industry-wide shortage of truck drivers and warehouse staff hampered the foodservice distributor’s post-pandemic recovery. That left CEO Pietro Satriano to determine the best strategy to attract and retain essential workers, even as he was tasked with expanding the wholesale grocery store chain (CHEF’STORE) that US Foods launched during the pandemic lockdown. Harvard Business School Professor David E. Bell explores how post-pandemic supply chain challenges continue to affect the foodservice distribution industry in his case, “US Foods: Driving Post-Pandemic Success?”

• 05 Jul 2022
• What Do You Think?

Have We Seen the Peak of Just-in-Time Inventory Management?

Toyota and other companies have harnessed just-in-time inventory management to cut logistics costs and boost service. That is, until COVID-19 roiled global supply chains. Will we ever get back to the days of tighter inventory control? asks James Heskett. Open for comment; 0 Comments.

• 05 May 2022

Why Companies Raise Their Prices: Because They Can

Markups on household items started climbing years before the COVID-19 pandemic. Companies have realized just how much consumers will pay for the brands they love, says research by Alexander MacKay. Closed for comment; 0 Comments.

• 31 Mar 2022

Navigating the ‘Bermuda Triangle’ in Professional Services

Not all companies need to scale. Ashish Nanda explores a crucial choice that leaders of professional services firms face as their organizations grow. Open for comment; 0 Comments.

• 28 Feb 2022

How Racial Bias Taints Customer Service: Evidence from 6,000 Hotels

Hotel concierges provide better service to white customers than Black and Asian customers, says research by Alexandra Feldberg and colleague. They offer three strategies to help companies detect bias on the front line. Open for comment; 0 Comments.

• 10 Feb 2022

Why Are Prices So High Right Now—and Will They Ever Return to Normal?

And when will sold-out products return to store shelves? The answers aren't so straightforward. Research by Alberto Cavallo probes the complex interplay of product shortages, prices, and inflation. Open for comment; 0 Comments.

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A Framework to Design an Effective Operations Strategy

Erica Golightly

Senior Writer

December 12, 2023

Why do some companies align on strategic priorities and operate at peak efficiency while others have a stockpile of unsuccessful projects? 

The short answer is the shelf life of an operations strategy hinges on day-to-day implementation.

In a 2023 ClickUp global survey of hundreds of business leaders, 35% of respondents said operational efficiency is their top focus for business success. This is a call to action for Outcome Champions—operations management professionals coordinating resources, processes, and people to achieve operational excellence. ✨

The fundamental question to ask before taking any steps is a two-parter: What are your organization’s logistical and culturally relevant strategies, and how do you sustain a best-in-class partnership between all leadership levels and teams for success? 

Building strategies isn’t just about solving problems. Instead, it should leverage the capabilities of technology and build a workplace that removes fear-based opinions about trying new ideas. And that type of innovation is fuel for both strategic work and production .

• Types of operations strategies

Step 1: Define what the operations strategy will impact or transform 

Step 2: identify and secure the essential resources required for successful strategy execution, step 3: co-create an action plan to secure the flow of materials, information, and resources, step 4: leverage technology and be the driving force behind the strategy’s implementation, step 5: set checklists and decision rules for continuous improvement.

What is an Operations Strategy?

Operations strategy is the actionable plan that guides how a company manages its processes and resources in alignment with its overarching organizational goals. These processes involve the production and delivery of products or services that the company offers. 

Beyond the jargon, there’s a concept that molds a workplace’s culture, productivity, and business goals. Any company—small, mid, and large—does this to fit what they’re doing, where they’re doing it, and how they want to be different from others in their field.

While it could be perceived as an overlap with strategic planning , there is a distinction to be mindful of as we explore this guide: Strategic planning sets the overall vision and direction for the organization, often done annually or semi-annually. The operation’s main goals describe the processes and workflows that will be used to complete the work. ⚙️

Let’s take a look at operation strategy examples of specific functional areas within the organization:

Types of operations strategies for improvement, efficiency gains, and innovation

These operations strategies are not mutually exclusive. And this is good news! No one wants to be locked into a single business strategy. An integrated approach lets organizations optimize their operations for different products/services, customer segments, and markets. 🎯

When an organization invests in operations strategy and implementation, it invests in employee productivity. With a direct line of sight to the why and how behind their tasks, they aren’t forced to navigate high levels of ambiguity.

Instead, they are prepped with clear instructions to complete the right tasks. 

If you’re eager to begin process mining and outline your operational objectives right now, download the Operational Plan Template by ClickUp . It’s time to declutter your mental garage to make space for exciting, growth-oriented projects.

Extend invitations to your nearest collaborators and organize a systems architecture workshop, whether in real-time or asynchronously! 📧

So far, we’ve learned the inner workings of an operations strategy. Let’s see this in practice.

How to Build the Elements of an Operational Strategy Into Project Plans

This compact guidebook is built for an operations manager to implement the best core business processes and workflows into project plans. 

So, why is this guide compact? Disclaimer: We’re all in the same sitcom but reading different scripts. While there are business models and industries we can sort ourselves into, every company has a different set of core values that reflect its purpose and guiding principles. 

For this reason, the systems you’ll read below are the key success factors all operational strategies need. Teams can reach their peak performance by putting just one insight into action!

Think short-term perspective (competitive priorities) and long-term vision (trade-offs). 

Short-term planning meets immediate customer requirements, helps allocate resources at the right place and time, and provides benchmarks for evaluating team performance.

Long-term planning allows organizations to invest in modern technology solutions, guide market expansion opportunities, and redesign logistics. 

Your operational plan should have a narrower scope and be concerned with the day-to-day activities and actions necessary to implement the strategic plan . The key to securing leadership approval and support is articulating your plan’s value, feasibility, and alignment.

This is where co-creating easily measurable KPIs with teams and all levels of leadership is essential to provide each team member with a sense of ownership in their tasks. 🔑

Putting together a task force for the operations strategy is a group effort, especially when partnering with other teams. Collaborators in finance, marketing, human resources, and more will help fill knowledge gaps and advocate for enhancing efficiency , reducing costs, and delivering greater value.

Every department has business-as-usual tasks that keep the ship moving. If your operations strategy requires a significant chunk of time, there needs to be conversations with department leads about the best approach to minimize disruption. 💬

Because operation managers have a complex and multifaceted role, these discussions are teachable moments to influence the outcome of projects. 

Three valuable tools—capacity planning, resource planning, and process mapping—will take the guesswork out of this step. 

• Capacity planning gives visibility into whether you have enough company resources to meet the demands of a project’s needs
• Resource planning answers the question: What projects are our resources currently working on?
• Process design mapping outlines the sequence of events, tasks, and activities involved in a business process

This action plan will take multiple rounds to finish, but it won’t be complete even then because priorities may evolve as circumstances change. The best safeguard for transparency in any shift in the strategy is having a single source of truth to revisit and make micro-adjustments. ⚖️

The contents of your action plan will vary based on your company’s business model and operational processes. At minimum, the contents of your action plan document should include: 

If it feels as if the universe gets bored and starts making things happen on its own because it takes you over a week to draft an action plan, try ClickUp AI . We’ve covered you with 100+ tools that use research-based prompts tailored to specific roles! 🤖

Are teams feeling comfortable sharing their ideas, concerns, and feedback? Is there a rise in delayed projects because of a lack of accountability? Are team members asking, “What should I do today?”

Your leadership, communication, and problem-solving skills are essential to the operation strategy’s success. Because you’re working between different teams, you’ll have to organize assorted information that’s coming at you from different channels. 👨‍💻

You’ll need the right task management container to set everyone up for success and communicate expectations for executing projects. If you think the action plan you wrote in step 3 will be “good enough,” consider this: 

Managing tasks through a static action plan can overwhelm larger teams or complex projects. There’s too much noise and clutter to scroll through daily. Dedicated task and project management software sets the stage for individual and team productivity at scale.

Manual models can’t keep up with the demands of an agile workforce, and being agile is a non-negotiable in today’s marketplace as industry-tailored AI use cases continue to grow. Your time and attention should be spent on high-value tasks and activities that move teams closer to their goals.

Take a quick water break, then download the Daily Action Plan Template by ClickUp . This template has all the ingredients to organize task assignments, milestones, deadlines, and contributors. 

As ClickUp users, your teams and stakeholders have all the tasks and documentation within reach to monitor progress closely throughout the implementation phase!

Warning: The hidden costs of shortcuts

It’s easy to underestimate the impact of small, seemingly mundane tasks that accrue over time. However, these “save for later” tasks can quickly snowball into a significant team problem. 

Let’s take a closer look at the hidden costs of shortcuts: 

• Workplace cultural debt : Workplace cultural debt refers to the negative consequences of neglecting the company’s culture and core values, like low employee morale, high turnover, and decreased productivity, which can harm their long-term success
• Technical debt : Technical debt arises when software or technology solutions are developed quickly or with suboptimal coding practices to meet immediate needs
• Process debt : Process debt refers to accumulating inefficiencies and shortcomings in an organization’s workflows and procedures over time
• Knowledge debt: Knowledge debt occurs when organizations fail to invest in continuous learning and development for their employees

Tackling any debt is a team effort. Here are a few quick methods to pull out of your productivity toolbox and tackle small tasks for minimum impact on your production initiatives: 

• Prioritize tasks : Prioritize tasks using the Eisenhower Matrix (urgent and important tasks come first, followed by important but not urgent ones)
• Team session blocking : Schedule focused time blocks for small tasks, avoiding multitasking to minimize distractions
• Task batching : Group similar tasks together and address them in batches to reduce context-switching
• Delegate when appropriate : Delegate action items and tasks that others on your team can handle

Now, back to our regularly scheduled program! 🎬

Considering that other routine tasks and special projects are running simultaneously in your workload, how do you maintain group momentum in the operations plan?

Begin with questions to help the operations management team systematically gather and analyze data on a centralized dashboard. This will reduce cognitive burden and allow team members to make confident decisions. 

These checklists and rules can be as detailed as you need them to be for internal use. If it helps to assess their true usefulness, run it through a beneficiary test. Give them to project leads, stakeholders, and senior leadership to confirm whether or not they’re focusing on the right questions to evaluate day-to-day implementation. 📊

So, how can operations managers apply checklists and decision rules on a tactical level when they’re up against tight timelines? 

Deliver a consistent experience to your team with a scheduled routine. 

Here’s a breakdown of operational strategy tasks at intervals. Is there anything you notice that can be added to your personal or team schedule? 🗓️

What’s Next?

With your newly acquired operations strategy framework in hand, apply it in the context of your company’s operations and processes . From supply chain management to software and everything in between, you’ll have the tools to coordinate even the toughest operations strategies. 💪

Lastly, if you’ve ever experienced fleeting progress in your responsibilities, it might be because you’re not focusing on the right things at the right time. It’s okay—no, it’s allowed —to ask your peers to challenge your observations when you get stuck. 

Count on the team at ClickUp as one of your peers, and reach out if you need help stepping out of a revolving door of unsuccessful implementation. Happy planning! ✍️

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Operations Management Reading: Operations Strategy

By: Marco Iansiti, Alain Serels

Operations Strategy bridges the gap between the strategic plan directed by executives and the emergent strategy that occurs through the many decisions of managers and employees. The goal of…

• Length: 37 page(s)
• Publication Date: Jun 27, 2013
• Discipline: Operations Management
• Product #: 8000-PDF-ENG

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Operations Strategy bridges the gap between the strategic plan directed by executives and the emergent strategy that occurs through the many decisions of managers and employees. The goal of operations strategy is to optimize operations' resources to best fulfill the strategic objectives of the firm. There are two central elements to an effective operations strategy. The first element provides the long-term objectives for operations in support of company strategy and answers the question, "What do we have to do?" The second offers a plan to meet those objectives and answers the follow-up question, "How are we going to do it?" The resource-based operations strategy framework offers a way to evaluate operations strategy by looking at the resources that influence a firm's ability to create and deliver its primary offerings. There are 5 categories of resources: Physical Resources, Human Resources, Intellectual Property Software and Methods, Ecosystem Resources, and Financial Resources. In the framework each resource is described in terms of the types of resources, the way they are integrated with one another into systems, and the plans for future development. Strategic alignment is the level to which the complete operating system is able to implement the company's strategy.

For classroom use in higher education, this Reading is accompanied by a Teaching Note, test bank, and exhibit slides.

Learning Objectives

Understand the connection between strategy and operations and that operations is where strategy is implemented. Understand how strategy is developed within an organization, both top-down directed strategy and bottom-up emergent strategy. Understand the importance of operations strategy to ensure strategic alignment between a company's strategy and operations activities. Evaluate an operations strategy using the resource-based operations strategy framework.

Jun 27, 2013

Discipline:

Operations Management

Harvard Business Publishing

8000-PDF-ENG

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Walmart’s Operations Management: 10 Strategic Decisions & Productivity

Walmart Inc.’s operations management involves a variety of approaches that are focused on managing the supply chain and inventory, as well as sales performance. The company’s success is significantly based on effective performance in retail operations management. Specifically, Walmart’s management covers all the 10 decision areas of operations management. These strategic decision areas pertain to the issues managers deal with on a daily basis as they optimize the e-commerce company’s operations. Walmart’s application of the 10 decisions of operations management reflects managers’ prioritization of business objectives. In turn, this prioritization shows the strategic significance of the different decision areas of operations management in the retail company’s business. This approach to operations aligns with Walmart’s corporate mission statement and corporate vision statement . The retail enterprise is a business case of how to achieve high efficiency in operations to ensure long-term growth and success in the global market.

The 10 decisions of operations management are effectively addressed in Walmart’s business through a combination of approaches that emphasize supply chain management, inventory management, and sales and marketing. This approach leads to strategies that strengthen the business against competitors, like Amazon and its subsidiary, Whole Foods , as well as Home Depot , eBay, Costco , Best Buy, Macy’s, Kroger, Alibaba, IKEA, Target, and Lowe’s.

The 10 Strategic Decision Areas of Operations Management at Walmart

1. Design of Goods and Services . This decision area of operations management involves the strategic characterization of the retail company’s products. In this case, the decision area covers Walmart’s goods and services. As a retailer, the company offers retail services. However, Walmart also has its own brands of goods, such as Great Value and Sam’s Choice. The company’s operations management addresses the design of retail service by emphasizing the variables of efficiency and cost-effectiveness. Walmart’s generic strategy for competitive advantage, and intensive growth strategies emphasize low costs and low selling prices. To fulfill these strategies, the firm focuses on maximum efficiency of its retail service operations. To address the design of goods in this decision area of operations management, Walmart emphasizes minimal production costs, especially for the Great Value brand. The firm’s consumer goods are designed in a way that they are easy to mass-produce. The strategic approach in this operations management area affects Walmart’s marketing mix or 4Ps and the corporation’s strategic planning for product development and retail service expansion.

2. Quality Management . Walmart approaches this decision area of operations management through three tiers of quality standards. The lowest tier specifies the minimum quality expectations of the majority of buyers. Walmart keeps this tier for most of its brands, such as Great Value. The middle tier specifies market average quality for low-cost retailers. This tier is used for some products, as well as for the job performance targets of Walmart employees, especially sales personnel. The highest tier specifies quality levels that exceed market averages in the retail industry. This tier is applied to only a minority of Walmart’s outputs, such as goods under the Sam’s Choice brand. This three-tier approach satisfies quality management objectives in the strategic decision areas of operations management throughout the retail business organization. Appropriate quality measures also contribute to the strengths identified in the SWOT analysis of Walmart Inc .

3. Process and Capacity Design . In this strategic decision area, Walmart’s operations management utilizes behavioral analysis, forecasting, and continuous monitoring. Behavioral analysis of customers and employees, such as in the brick-and-mortar stores and e-commerce operations, serves as basis for the company’s process and capacity design for optimizing space, personnel, and equipment. Forecasting is the basis for Walmart’s ever-changing capacity design for human resources. The company’s HR process and capacity design evolves as the retail business grows. Also, to satisfy concerns in this decision area of operations management, Walmart uses continuous monitoring of store capacities to inform corporate managers in keeping or changing current capacity designs.

4. Location Strategy . This decision area of operations management emphasizes efficiency of movement of materials, human resources, and business information throughout the retail organization. In this regard, Walmart’s location strategy includes stores located in or near urban centers and consumer population clusters. The company aims to maximize market reach and accessibility for consumers. Materials and goods are made available to Walmart’s employees and target customers through strategic warehouse locations. On the other hand, to address the business information aspect of this decision area of operations management, Walmart uses Internet technology and related computing systems and networks. The company has a comprehensive set of online information systems for real-time reports and monitoring that support managing individual retail stores as well as regional market operations.

5. Layout Design and Strategy . Walmart addresses this decision area of operations management by assessing shoppers’ and employees’ behaviors for the layout design of its brick-and-mortar stores, e-commerce websites, and warehouses or storage facilities. The layout design of the stores is based on consumer behavioral analysis and corporate standards. For example, Walmart’s placement of some goods in certain areas of its stores, such as near the entrance/exit, maximizes purchase likelihood. On the other hand, the layout design and strategy for the company’s warehouses are based on the need to rapidly move goods across the supply chain to the stores. Walmart’s warehouses maximize utilization and efficiency of space for the company’s trucks, suppliers’ trucks, and goods. With efficiency, cost-effectiveness, and cost-minimization, the retail company satisfies the needs in this strategic decision area of operations management.

6. Human Resources and Job Design . Walmart’s human resource management strategies involve continuous recruitment. The retail business suffers from relatively high turnover partly because of low wages, which relate to the cost-leadership generic strategy. Nonetheless, continuous recruitment addresses this strategic decision area of operations management, while maintaining Walmart’s organizational structure and corporate culture . Also, the company maintains standardized job processes, especially for positions in its stores. Walmart’s training programs support the need for standardization for the service quality standards of the business. Thus, the company satisfies concerns in this decision area of operations management despite high turnover.

7. Supply Chain Management . Walmart’s bargaining power over suppliers successfully addresses this decision area of operations management. The retailer’s supply chain is comprehensively integrated with advanced information technology, which enhances such bargaining power. For example, supply chain management information systems are directly linked to Walmart’s ability to minimize costs of operations. These systems enable managers and vendors to collaborate in deciding when to move certain amounts of merchandise across the supply chain. This condition utilizes business competitiveness with regard to competitive advantage, as shown in the Porter’s Five Forces analysis of Walmart Inc . As one of the biggest retailers in the world, the company wields its strong bargaining power to impose its demands on suppliers, as a way to address supply chain management issues in this strategic decision area of operations management. Nonetheless, considering Walmart’s stakeholders and corporate social responsibility strategy , the company balances business needs and the needs of suppliers, who are a major stakeholder group.

8. Inventory Management . In this decision area of operations management, Walmart focuses on the vendor-managed inventory model and just-in-time cross-docking. In the vendor-managed inventory model, suppliers access the company’s information systems to decide when to deliver goods based on real-time data on inventory levels. In this way, Walmart minimizes the problem of stockouts. On the other hand, in just-in-time cross-docking, the retail company minimizes the size of its inventory, thereby supporting cost-minimization efforts. These approaches help maximize the operational efficiency and performance of the retail business in this strategic decision area of operations management (See more: Walmart: Inventory Management ).

9. Scheduling . Walmart uses conventional shifts and flexible scheduling. In this decision area of operations management, the emphasis is on optimizing internal business process schedules to achieve higher efficiencies in the retail enterprise. Through optimized schedules, Walmart minimizes losses linked to overcapacity and related issues. Scheduling in the retailer’s warehouses is flexible and based on current trends. For example, based on Walmart’s approaches to inventory management and supply chain management, suppliers readily respond to changes in inventory levels. As a result, most of the company’s warehouse schedules are not fixed. On the other hand, Walmart store processes and human resources in sales and marketing use fixed conventional shifts for scheduling. Such fixed scheduling optimizes the retailer’s expenditure on human resources. However, to fully address scheduling as a strategic decision area of operations management, Walmart occasionally changes store and personnel schedules to address anticipated changes in demand, such as during Black Friday. This flexibility supports optimal retail revenues, especially during special shopping occasions.

10. Maintenance . With regard to maintenance needs, Walmart addresses this decision area of operations management through training programs to maintain human resources, dedicated personnel to maintain facilities, and dedicated personnel to maintain equipment. The retail company’s human resource management involves training programs to ensure that employees are effective and efficient. On the other hand, dedicated personnel for facility maintenance keep all of Walmart’s buildings in shape and up to corporate and regulatory standards. In relation, the company has dedicated personnel as well as third-party service providers for fixing and repairing equipment like cash registers and computers. Walmart also has personnel for maintaining its e-commerce websites and social media accounts. This combination of maintenance approaches contributes to the retail company’s effectiveness in satisfying the concerns in this strategic decision area of operations management. Effective and efficient maintenance supports business resilience against threats in the industry environment, such as the ones evaluated in the PESTEL/PESTLE Analysis of Walmart Inc .

Determining Productivity at Walmart Inc.

One of the goals of Walmart’s operations management is to maximize productivity to support the minimization of costs under the cost leadership generic strategy. There are various quantitative and qualitative criteria or measures of productivity that pertain to human resources and related internal business processes in the retail organization. Some of the most notable of these productivity measures/criteria at Walmart are:

• Revenues per sales unit
• Stockout rate
• Duration of order filling

The revenues per sales unit refers to the sales revenues per store, average sales revenues per store, and sales revenues per sales team. Walmart’s operations managers are interested in maximizing revenues per sales unit. On the other hand, the stockout rate is the frequency of stockout, which is the condition where inventories for certain products are empty or inadequate despite positive demand. Walmart’s operations management objective is to minimize stockout rates. Also, the duration of order filling is the amount of time consumed to fill inventory requests at the company’s stores. The operations management objective in this regard is to minimize the duration of order filling, as a way to enhance Walmart’s business performance.

• Reid, R. D., & Sanders, N. R. (2023). Operations Management: An Integrated Approach . John Wiley & Sons.
• Szwarc, E., Bocewicz, G., Golińska-Dawson, P., & Banaszak, Z. (2023). Proactive operations management: Staff allocation with competence maintenance constraints. Sustainability, 15 (3), 1949.
• Walmart Inc. – Form 10-K .
• Walmart Inc. – History .
• Walmart Inc. – Location Facts .
• Walmart’s E-commerce Website .
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These study questions are provided to guide course readings and case write-ups , and to introduce fundamental ideas that will be discussed in class.

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The following case studies are representative of Strategy&’s experience in operations.

Major logistics transformation

A GCC country's military engaged Strategy& to help it move from a single force operating model to a joint logistics one to improve its efficiency and operational readiness.

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Supply chain resilience strategy

Because of escalating geopolitical tension in the region and heavy dependence on imports for most strategic commodities, the government of a Middle East country decided to formulate a resilience program with the support of Strategy&.

Hospital supply chain strategy

As part of establishing a major multi-specialty tertiary care center, the client engaged Strategy& to help develop its supply chain strategy and operating model.

Sourcing strategy

In the midst of a rapid global expansion, a large telecommunications company in the Middle East urgently needed to develop a supply chain with a global footprint to support its growth while managing escalating costs.

Improving material availability

A national power utility company was witnessing a significant demand surge owing to unprecedented growth in both the residential and commercial sectors.

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A unique take on Southwest Airlines Strategy

Anyone who has studied business management either as a degree or as an elective would have definitely studied Michael Porter’s 5 Forces framework. This framework was first published in  Harvard Business Review  in 1979. The model is very much relevant in 21st-century business as well due to its deep 360-degree view of a business.

One of the 5 forces is called “Barriers to Entry” and more often than not either Oil & Gas or Airline industry would serve as an apt example of an industry with very high barriers to entry due to its high Capex and Opex requirements.

But wait, then with so many barriers to entry, why do airlines still bleed red? There are many reasons for this, but one of them is stiff competition with low-cost carriers, the 5th, and the framework’s central force (competition among the players).

Before we move on, the below is an interesting tweet response from Anand Mahindra, on being asked to buy the ailing “ Jet Airways ”.

Remember the quote: “If you want to be a millionaire, start with a Billion dollars and then start (buy) an airline!” https://t.co/dYRdwup3kK — anand mahindra (@anandmahindra) June 29, 2019

The US Airline Industry

Following the 9/11 attacks, the US airline industry has been through rough weather. 20+ airlines have filed for bankruptcy protection under Chapter 7. 60+ airlines have filed for bankruptcy protection under Chapter 11.  This list also includes the top 3 out of 4 airlines namely, American Airlines, United & Delta Air Lines, however they were able to exit the bankruptcy within a few years.

The landscape has been constantly changing with a high volume of mergers and acquisitions, resulting in changing market share statistics.

The graph above covering the period January to December 2020 showcases that the top 4 airlines constitute approx. 65% of the market share.

In this story, we are focusing on Southwest Airlines that was founded on the notions of the low-cost carrier but with its unique strategy has been profitable for the last 45 years in a row. 

The takeoff strategy of Southwest Airlines

Southwest Airlines Co. , typically referred to as Southwest, is one of the United States’ major airlines and the world’s largest low-cost carrier airline. The airline was established on March 15, 1967, by  Herb Kelleher  as Air Southwest Co. and adopted its current name, Southwest Airlines Co., in 1971, when it began operating as an intrastate airline wholly within the state of Texas first flying between Dallas, Houston and San Antonio. 

Most airlines back in the 1960s followed the most popular “Hub and Spoke” model for their operations.

Hub and Spoke model – As the name suggests, there is a defined hub from where the flights originate, and the destinations are the spokes.

The benefit of a hub and spoke model is that it has fewer routes, but the major drawback of this model is its rigidity, and if there is a slight change in the airline routing due to weather, etc., it can have cascading consequences to the other planned flights.

Point to Point model – Southwest, being a low-cost carrier, focused more on the point to point model and bought significant process improvements, in a way mastered it to achieve very high operational efficiency.

In the point-to-point model, each flight is a single journey. The origin and destination are connected via a single non-stop flight. The point-to-point model offers more travel options and flexibility as compared to the hub and spoke model.

For passengers undertaking further journeys, they will have to collect the baggage and recheck them for leg 2 of their journey. This model has considerably led to saved travel hours and done away with the necessity for connecting flights.

Key Differentiating Factors in Southwest Airlines Strategy

Southwest airlines is the third largest airline in the United States of America and arguably the biggest in the low-cost carrier segment across the globe.

So, was the operational efficiency gained due to the change in the flight operations model the only reason why Southwest airlines is the #1 low-cost carrier in the world?

NO, let’s understand what differentiated Southwest airlines strategy from its counterparts.

Customer Eccentricity

For Southwest, they keep the customers at the center of their business operations. They offer certain benefits to flyers which are not offered by other airlines, like

• Southwest allows two checked-in bags, free of cost, unlike many of its competitors.
• Flight change thirty minutes prior to the departure is allowed by Southwest.
• Southwest offers free in-flight entertainment like Live TV, Movies, use of whatsapp and imessage. It offers Wi-Fi services at very nominal rates.

All these have resulted in Southwest being the airline with the least number of complaints, according to the Department of Transportation of the United States of America.

Only one type of aircraft

Many airlines have different types of aircraft in their fleet, but not Southwest. Southwest operates by using only Boeing 737 aircraft. It saves a lot of money by:

• Training cabin crews and support staff on only one type of aircraft.
• Maintenance of inventory of spare parts for one aircraft type.
• In case of breakdown, alternate aircraft can be arranged immediately.
• Its policy of not assigning seats helps tremendously as customers can take any available seat when boarding the aircraft, thereby reducing the boarding time. In the case of alternate aircraft also, this policy hugely benefits the airline reducing the turnaround time.

Right recruitment policies

Southwest stresses a lot on the customer experience and hence it is very imperative for the airline to hire the right kind of people. Southwest focusses on hiring people who have an attitude for serving customers.

Employees undergo various pieces of training which also includes cross-training. Training is heavily centered around team building and collaboration.

The Southwest Airlines case study is a lesson in cultural strategy. An organization built on the fundamentals of customer eccentricity, effective processes, and a dedicated team is meant to achieve success and overcome challenges. This model of exceptional customer service can help a business earn an impeccable reputation in the industry. That’s what makes the Southwest model uniquely priced, yet one profitable in this cruel airline industry.

Southwest’s ability to be different and not follow the herd—not to mention becoming America’s largest airline—can be traced in large part to the Airline Deregulation Act. Thanks to this act, Herb and Rollin realized their Vision and the traveling public benefits on every flight, every day. Gary Kelly, Chairman & CEO, Southwest Airlines

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Case Study: Systems Implementation and NetSuite for Agribusiness

Client Background

A nursery in the fruit crop industry, offering a variety of products, with over 600 acres and 300,000 square feet of production facilities.

The Situation

The client’s current ERP system was outdated and not meeting their needs. It did not support a remote work environment, which left their technicians and the production team unable to enter data when out in the field. The production process required significant manual data entry, leading to errors and delays in getting the data.

Finally, their ERP system did not integrate with their other systems, which inhibited real-time data for decision making.

The Solution & Results

After understanding the client’s goals for their new ERP system, Moss Adams performed a demo of NetSuite’s features and explained the benefits of switching to a cloud-based solution. Once NetSuite was selected, we designed and implemented a custom solution, including features to autocalculate sales royalties, which involved multiple entities and tier levels, and automated their customer deposit process. This eliminated the very laborious and intensive manual calculation processes for the client.

Overall, the client gained the following from their new NetSuite implementation:

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Leadership Case Study: Albert Dunlap and Corporate Transformation

This essay about Albert Dunlap explores his controversial role in corporate management, focusing on his aggressive restructuring and cost-cutting strategies. Known as “Chainsaw Al,” Dunlap is recognized for dramatically increasing shareholder value at the expense of workforce stability, primarily during his time at Scott Paper. The essay examines the ethical implications of his leadership style, emphasizing the conflict between maximizing shareholder returns and maintaining responsibilities towards employees and communities. It argues that while Dunlap’s methods yielded immediate financial improvements, they often resulted in long-term negative impacts on company culture and morale, urging future leaders to consider a more balanced approach to stakeholder interests.

How it works

Albert Dunlap, often known by his nickname “Chainsaw Al,” stands as a controversial figure in the world of corporate leadership and management. His career is particularly noted for his radical restructuring strategies and cost-cutting measures, making him an intriguing case study in corporate transformation. This essay delves into Dunlap’s methodologies, his impact on companies he managed, and the broader implications of his leadership style.

Albert Dunlap’s reputation was built on his ability to dramatically increase shareholder value by aggressively cutting costs and restructuring the companies he led.

His tenure at Scott Paper is perhaps the most illustrative example of his strategy in action. Within a mere 20 months, Dunlap reduced the workforce by more than a third, closed several factories, and streamlined operations. These measures resulted in a significant increase in Scott Paper’s stock price, and the company was subsequently sold to Kimberly-Clark for a handsome profit. This outcome was celebrated by shareholders but left thousands without jobs, highlighting a stark duality in Dunlap’s approach to corporate leadership.

Dunlap’s philosophy was straightforward and unapologetic: he believed that his primary responsibility was to the shareholders, and everything else was secondary. This perspective is a textbook example of agency theory in economics, which posits that the primary responsibility of the executives is to maximize shareholder value, often at the expense of other stakeholders such as employees and local communities. Dunlap’s methods were effective in achieving quick financial turnarounds but were criticized for being unsustainable and ethically questionable. Critics argued that his focus on short-term gains undermined the long-term health and culture of organizations.

Moreover, Dunlap’s leadership style raises questions about the role of empathy and ethics in business. His approach was often seen as draconian, prioritizing profits over people and leaving a trail of corporate upheaval. While his strategies might be justified from a purely financial standpoint, they sparked debates about the moral responsibilities of corporate leaders. The fallout from his tactics often resulted in a demoralized workforce and tarnished company reputations, factors that can have long-term negative effects on a company’s performance.

In conclusion, Albert Dunlap’s career offers valuable lessons in leadership and corporate management. It serves as a powerful example of how certain leadership styles, while effective in delivering immediate financial results, can also lead to significant ethical and operational challenges. Dunlap’s legacy reminds us that leadership cannot be solely about profitability. Effective leaders must balance the interests of all stakeholders, including employees, communities, and shareholders, to foster sustainable success and positive corporate culture. His case prompts current and future business leaders to reflect on the long-term implications of their decisions, beyond just the immediate financial gains.

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Cannabis donation as a harm reduction strategy

A case study

Clarke, SED., Victor, G., Lynch, P., Suen, LW. , & Ray, B. (2024). Cannabis donation as a harm reduction strategy: A case study . Harm Reduction Journal , 21 . https://doi.org/10.1186/s12954-024-00974-3

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Strategic Sidearms: The U.S. Army Special Forces’ Tactical Shift to Glock 19

I n a masterful display of bureaucratic navigation and requirement tailoring, the U.S. Army Special Forces deftly maneuvered to procure the Glock 19 pistols, fundamentally altering the landscape of sidearm utilization within Special Operations Command (SOCOM). This stratagem has since become an exemplary case study of acquisitions within the military, particularly when set against the backdrop of standardized issue weaponry.

The Glock series, with its polymer-framed, striker-fired design, has come to define the modern handgun’s evolution, influencing the development of many civilian, law enforcement, and military firearms, including the military’s M17/M18 MHS from SIG Sauer. Yet, in a decisive move by the U.S. Army Special Forces, the Glock 19, an Austrian design, was selected to meet SOCOM’s unique requirements.

Historically, the Beretta M9 had been the U.S. military’s primary sidearm since 1985, and it remained so throughout much of the Global War on Terror. Despite this, there was an undeniable push within the elite units for a lighter, more versatile handgun, as demonstrated by the elite Delta Force’s adoption of the Glock 22 in .40 S&W. This decision influenced the broader SOCOM community’s preference for Glock pistols.

As the younger generations of Army Special Forces personnel, particularly those from the 18X program, joined the ranks, they brought with them the inclination for Glocks. However, the challenge was the military’s procurement process and its allegiance to the M9. To overcome this, Special Forces operators artfully crafted a requirement in the mid-2000s for a concealable handgun for use during operations in civilian attire, a requirement that notably mirrored the characteristics of the Glock 19.

The Glock 19, while compact and perhaps less suited for the heavy combat environments of Iraq and Afghanistan compared to its larger counterparts, fulfilled the SOCOM need for a concealable weapon. Passing the rigorous testing and evaluation process, it was adopted as Special Forces’ compact pistol. However, the distribution was not widespread; the Glock 19s were initially issued based on mission-specific needs, with Operational Detachment Alphas (ODAs) trading them among deploying teams.

This changed in 2016, when SOCOM fully embraced the Glock 19, allowing units across branches to acquire the pistol and Army Special Forces to issue it to all team members. The adoption trajectory was bolstered two years later when SOCOM standardized with the Trijicon RMR Type 2 red-dot sight, further cementing the Glock 19’s role within Special Operations.

The Glock acquisition serves as a lesson in the pragmatic and inventive procurement strategies not unique to the Army. It parallels other instances such as the U.S. Marine Corps’ initial adoption of the Heckler & Koch HK416 as the M27 Infantry Automatic Rifle, which later became the standard rifle for Marine Corps infantry.

In conclusion, the tactical procurement of Glock 19 pistols by the U.S. Army Special Forces illustrates a nuanced understanding of mission requirements and the leveraging of acquisition guidelines. 

Relevant articles:

– How Army Special Forces Pulled a Fast One to Get Glock Pistols , Free Range American, May 8, 2022

– How Army Special Forces pulled a sneaky to get Glock pistols , We Are The Mighty, Dec 8, 2021

– History of the Glock 19 with U.S. Special Forces , pistol-forum.com, Nov 28, 2021

– Glock 19 (G19) Compact 9mm Combat/Tactical Pistol: How and Why US Army Special Forces (SF) Adopted It…a Little History , DefenseReview.com, Sep 3, 2018