Operational Capacity Assessment

Operational execution capacity is the extent to which the company can employ its operational resources and thus create capabilities to perform the activities required to implement a new strategy within a reasonable time frame.

Methodology

1. Identify the client’s operational resources and capabilities. Determine which resources and capabilities are most critical to successfully implement the strategic initiative. Identify the level of resources and capabilities available within the company: purchasing, personnel, accounting and finance, marketing, products/service development, and technical engineering. Draw an operational map using the KSF. Identify resources employed to perform current value chain activities, and determine how efficiently the resources are being utilized.
2. Assess its strengths and weaknesses. Pose critical questions concerning resource deployment, productivity, configuration, and allocation.
3. Determine the most critical gaps. Pinpoint the most critical gaps to be closed. Use knowledge of operations to (re-)formulate strategic alternatives

Notes

• Should be performed concurrently with all other analyses of the industry, company, and competitor companies to relate strategic thinking to company capabilities
• Purpose of the analysis is to understand the company’s capacity or degrees of freedom to execute certain strategies
• Benchmarking might provide additional insights

Strengths

• If properly defined, a very strong technique used to ensure that a strategy is implementable

Weaknesses

• If resources and capabilities are incorrectly assessed an otherwise sound and logical strategy might be rendered useless and the performance measurement systems might be adversely affected