Operation management can be simply defined as the methods by which organizations produce or deliver the goods and services that provide the reason for their existence. The management process, in that regard, is concerned with the resources that produce the products and services, and which usually consists of people, materials, technology, and information. (Galloway, Rowbotham, and Azhashemi) Technology as one of the components of operations management, although does not replace skilled management and human resources, if employed correctly can improve operational efficiency and quality. In that regard, this paper analyzes operations management in the context of technology, its roles, and the way it can be used in the manufacturing and service area.
Operations processes in business
The developments in process technology over the last years were constantly increasing, which certainly affected the operations processes in business. This fact might be explained in a way that all operations use some sort of process technology whether in the field of manufacturing or services. (Slack, Chambers and Johnston, p. 220). In the field of manufacturing, it might be seen through any automated process, whereas in the field of services, this factor can be evident through managing finances, web accessibility, and the flexibility offered to customers. The use of technology, in that regard, is mainly associated with well-defined routine processes.
Taking the aspect of operations management, managers need “to be able to articulate what the technology should be able to do, be involved in the choice of the technology itself, manage its installation, integrate it into the rest of the operation, maintain and finally replace it when necessary.” (Slack, Chambers and Johnston, p. 223). Technology can be used in many different ways. One important argument for technology use is the transaction volume, where automated systems can handle volumes that manual operations cannot handle. Other aspects include risk avoidance, specifically when it concerns complex tasks with high consequences from mistakes. Additionally, technology in a wider context can be the method of getting a competitive advantage, specifically in an industry where the manufacturing processes or the services have reached their limits in terms of competitive advantages.
Examples of the use of technology imply merely the context in which they are used rather than specific materials and tools, and accordingly, managers should be able to understand the most common contexts and material related to their sphere of industry. Examples might include, but are not limited to the following:
Computer numerically controlled machine tools (CNC)
Automated guided vehicles (AGVs)
Flexible manufacturing systems (FMSs)
The increase in productivity can be related to established bottlenecks in the processes. Nevertheless, it cannot be strictly said that technology improving productivity will save projects from failure, where it relies on many factors. One of the factors is the reasonability of implementing technological solutions. In that regard, “[e]fficient use of technology will deliver an improved service, poor will waste money and deliver a pooper service…” (Loader and Biggs, p. 53). In general, if the processes were optimized and analyzed before the implementation of the technological solution, through analyzing manual processes and outlining the main “bottlenecks” in these processes along with their necessary controls, then with the implementation of technological processes will increase productivity. The areas of productivity improvements can be seen through such indicators as lower costs through repetitive tasks, higher labor productivity through more control, decreasing time, faster throughput times, and higher quality.
Challenges might be associated with the financial factors when investing in technological processes. “Justifying investment will always be a difficult matter, relying as much on management intuition as scientific analysis: there are no calculations that can state with certainty that a specific investment will yield a specified.” (Brown et al. p. 96). In addition to the aforementioned, it was previously mentioned that other operational factors might be lacking, such as outdated production methods, and thus moving away from key competitive bases will result in difficulties to justify the investment made. Accordingly, the investments made will require a competitive return over a specific period, so the business line should have at least a similar longevity to receive the full benefit (Loader and Biggs, p. 58).
In addition, many technological solutions and methods require skilled staff to operate the automation processes, as well as certain changes in the infrastructure of the manufacture, which in turn add up to the high capital costs of implementing technology.
It can be concluded that the implementation of technology is certainly an inevitable transformation process of most organizations. The benefits of technology can be seen directly associated with facilitating the processes and the resources, which operations management is directly handling. Nevertheless, technology is not a panacea, and it cannot be a separate solution to all the problems in the company, as well as it cannot be a guaranteed method of improving productivity. Technology will work only when all the processes are optimized within the company, and combined with skilled operations management it will deliver to its full potential.
Brown, Steve, et al. Strategic Operations Management. Elsevier Science & Technology, 2005.
Galloway, R. L., Frank Rowbotham, and Masoud Azhashemi. Operations Management in Context. Oxford ; Boston: Butterworth Heinemann, 2000.
Loader, David, and Graeme Biggs. “Managing Technology in the Operations Function”. 2002. Butterworth-Heinemann.
Slack, Nigel, Stuart Chambers, and Robert Johnston. Operations Management. Pearson Education UK, 2007.