Linking strategic planning to operations management: the competitive histograms approach and an empirical study

Abstract

A new model is presented aimed at filling the gap between top-down strategic models found in literature and real-life applications in field, where the need for a link between strategic planning and operations management emerges as a key-issue. The model considers that the strategic planning process should be triggered by a bottom-up approach, starting from the product cost structure, the product flow analysis and the supply chain, since strategic plans – in the end – will be implemented by division managers. So, the focus of strategic planning should be shifted from the company's strategic apex to the personnel involved in the supply chain management. After a comparative review of the most popular and recent approaches to strategic planning, the new model is introduced through a six-step methodology and the tool of competitive histograms is presented. Then, the model is tested by applying it to the real-life case study of the European flexible packaging market. Results point out that the power of competitive histograms lies both in the multicriteria approach, which allows to measure qualitative and quantitative impacts, and in the bottom-up inherent structure, which enables division managers–especially manufacturing, sales, distribution and logistic managers–to pass all their knowledge to top managers, by also stimulating interfunctional communications

Keywords:

• strategic planning
• operations management
• competitive histograms
• empirical study

ROBERTO CIGOLINI graduated in Production and Management Engineering at Politecnico di Milano in 1994. He is now Senior Researcher at the Department of Management, Economics and Industrial Engineering of Politecnico di Milano and Lecturer in Industrial Production Management. Since 1999 to 2002 he has been co-Director of the MBA programme at the MIP Business School, presently, co-Director of the Strategic Management of Industrial Property Master Course. He is also founding member (2001) of the Technical Committee on Semiconductor Factory Automation (IEEE Robotics and Automation Society) and member of the National Maintenance Commission of UNI (the Italian branch of ISO). His main research interests are primarily related to the production planning and control techniques and supply chain management, to the evaluation of technology-related intangible resources, to the intellectual property strategies, to the facilities, property and assets management and to the project management technique, mainly in the area of modularization.

GIOVANNI GRILLO holds a double Degree in Production and Management Engineering at Ecole Centrale Paris (1997) and at Politecnico di Milano (2000). He is Director of the Milan office of Masai, leading European Consultancy specialized on Purchasing Cost Optimization. He began his consulting career with Corporate Value Associates in Paris (1998), focusing first in Strategic Audit, Corporate Portfolio re-deployment and cost restructuring to major international groups (food, pharmaceutical and cosmetic packaging). After this period spent between France, UK and USA, he moved to the Utilities Sector, working in strategic segmentation and organizational repositioning related to the liberalization of the European Market. He joined Masai in January 2002, to launch the Masai Italian subsidiary in Italy. He focuses his professional research interests on product redesign to cost (value analysis), purchasing strategy and advanced negotiation techniques with suppliers.

Notes

¹Low attractiveness corresponds to scores ranging from 1 to 1 + (1/3) (3.728 − 1) = 1.909; medium attractiveness corresponds to scores ranging from 1.909 to 1 + (2/3) (3.728 − 1) = 2.819; high attractiveness corresponds to scores ranging from 2.819 to 3.728.