Subject: Tactical vs Strategic Improvement Strategies in OPSCM I recently came across an article that could be
Question:
Subject: Tactical vs Strategic Improvement Strategies in OPSCM I recently came across an article that could be helpful in our efforts to improve efficiency in OPSCM. The report, titled "A Tale of Two Improvement Strategies: Tactical vs Strategic" by Paul Ericksen, explains the differences between tactical and strategic approaches to increasing work efficiency. According to the article, tactical work refers to the actions that support day-to-day operations. In contrast, strategic work has the potential to significantly improve the efficiency of tactical work by delivering step-function magnitude efficiency impacts. The author argues that while incremental improvements are essential, they cannot be the sole basis for achieving world-class performance. Instead, managers should also focus on strategic improvements that can change the competitive landscape in the long term. This article highlights a crucial issue in our efforts to adopt best practices in OPSCM improvement efforts. While making incremental improvements to various processes, we may be overlooking the potential for step-function enhancements that could significantly increase efficiency and give us a competitive advantage. Consequently, I suggest that we take a closer look at the current improvement strategies and evaluate whether they are focusing too much on incremental improvements at the expense of strategic ones. We should consider whether they are allocating more resources towards pursuing long-term strategic enhancements that have the potential to deliver step-function efficiency impacts. Of course, pursuing strategic improvements comes with higher risk and uncertainty. However, as the article points out, we may need more than incremental improvements to keep the process competitive. Importantly, it is better to be the game-changer than to be left behind by competitors introducing game-changing improvements. Moreover, talented and capable team that can take on the challenge of pursuing strategic improvements are critical ingredients in the entire chain. Companies should encourage and reward employees who are working on strategic projects that have the potential to deliver step-function improvements. This will require a shift in performance management approach to prioritize pursuing long-term strategic goals over short-term incremental ones. I would be happy to discuss this article further with the OPSCM 300 class and explore how to incorporate these insights into our improvement efforts. Adopting a more balanced approach between tactical and strategic improvements can help us achieve world-class performance and stay ahead of our competitors.
Reference Ericsen, P. (2015). A Tale of Two Improvement Strategies: Tactical vs. Strategic. Www.industryweek.com. https://www.industryweek.com/supply-chain/procurement/article/22007330/a-tale-of-two-improvement-strategies-tactical-vs-strategic
Discussion Questions:
How can companies strike a balance between pursuing tactical and strategic improvements in their OPSCM processes?
What factors should be considered in determining the allocation of resources towards these different types of improvements?
How can companies encourage and reward employees who are working on strategic projects that have the potential to deliver step-function improvements?
What changes to the performance management approach may be necessary to prioritize pursuing long-term strategic goals over short-term incremental ones?
Intermediate Accounting
ISBN: 978-0324312140
16th Edition
Authors: James D. Stice, Earl K. Stice, Fred Skousen