Today’s global economy has forced companies to focus on how they deliver their product or service to their customers. Operations Management is an integral part of this process because it focuses on the transformation of needed inputs to desired outputs. This transformation includes office, production, manufacturing, and vendors or suppliers, as well as other things that affect the company’s ability to deliver superior quality products. Operations Management is the core of any business. It is the management function that coordinates all the activities in relationship to product/service reliability, quality, efficiencies, delivery and meeting customer’s expectations. Operations Management includes the use of the facilities, equipment, materials, technology, and most importantly the employees. These operational activities are designed relative to sustainability concerns. In this unit we will study the importance of Operations Management.
In the Five Forces Behind the New Business Reality, we see how businesses have been affected by today’s global economy. This has forced companies to continuously evaluate better ways to reduce cost, improve quality, and give the customer more than they expected. Understanding Operations Management will allow you to see the flow of the product or service as we use the project to gain the understanding of how companies do business. Relating the core of the business to the strategy needed to compete in today’s highly competitive markets while being environmentally responsible.
Read Chapter 1, “Introduction to Operations Management,” and Chapter 2, “Operations Strategy and Competitiveness,” in the Reid and Sanders textbook.
Subject: Internet Challenges
Internet Challenge Scoring Guide (see attachment).
Complete the Internet Challenge activity on page 27 of your textbook. Describe the service and manufacturing Web sites you visited and include a table or chart according to the activity instructions in your text. Select and report three to five characteristic operations management decisions. Identify and report whether these decisions are tactical or strategic. Also, compare and contrast operational decision differences between service and manufacturing companies reviewed.
Operations management is a term used to describe the process of managing resources like labor, time and raw materials to attain quality of a product or service. Operations are key to any business. Success in the operation, function and other integral sectors like product or service development and marketing contributes to the overall objectives of an organization. Operations are viewed as the primary functions of any business. The scope of an entity is defined by a range of operational activities that it engages. The nature of operation differs from one form of entity to another. Entities operating in the service industry engage in different operations from those engaged in manufacturing. On a similar note, operation management strategies, approaches and models will differ from one industry to another. Organizational level strategies and objectives also define the nature of operations and their management (Reid & Sanders, 2004). To develop insight on operational management strategies, this study focuses on the operations of a service company: Yahoo and a manufacturing firm: Intel Inc. Tactical and strategic decisions adopted by the entities are explored and analyzed in this study.
Intel Corporation is a multinational company that thrives in the technology industry with multinational presence. The company primarily deals with manufacturing of semiconductor chips. The giant technology entity manufactures several other products like motherboard chipsets, flash memories, interface hardware, server boards, network controllers and other computing-related devices (Intel, 2017). In the course of meeting customer demands and realizing a profit, the entity relies on some strategies that influence decision-making. Operational management decisions are part of the approaches that Intel Corporation deploys.
Product design is a strategic operational decision as it impacts long-term activities of the company. Intel Corporation focuses on the design of its product as an operational, marketing and sales strategy. Chambers & Johnston (2010) show that product design affects the nature and cost of operations. For Intel, its objective is to enhance profitability and produce high-quality products for its market. Profitability corresponds to lowering costs of production. For manufacturing companies like Intel, operation costs are significant. By deploying cutting edge technologies, Intel Corporation can create product designs that are less costly.
The manner in which an entity utilizes its inventory is perceived as a strategic operation management decision because raw materials directly impact operation outcome. The company maintains that inventory is serialized. This decision supports the security and product marketing strategies that are maintained by Intel Company. The company also uses the First in First Out (FIFO) approach to ensure that obsolete products are not used in production. Strategic decisions made under inventory management are integral to operations.
Systemic Technological Advancements
Intel Corporation is a technology savvy company. As new technology developments arise, the company aggressively adopts such improvements in its operation as part of its strategy to maintain production efficiency, quality of products and reduce costs. Use of wireless communication is one of the latest tactical operation decisions that the company has made. To support mobility of its workforce, Intel chose to abandon wired connection communication and limit inclusion. Operation meetings at the company are supported by wireless communication that is extremely secure. The company has also included cloud computing services as part of its wireless communication strategy.
Yahoo Inc. is an information technology company that majorly provides internet based services like Yahoo Mail, Yahoo News, and Yahoo Celebrity. Since 1994, the company has enjoyed considerable market success. However, Yahoo has faced numerous challenges, especially in its operations and general profitability. The company has employed several strategies in operational levels aimed at the long term and short term goals and objectives. The company is currently engaged in a merger deal with Verizon communication company, a move that will affect its organization strategy.
Yahoo company focuses on physical positioning of its engineering centers. The company assumes physical presence in locations where its services are highly demanded to reduce the cost of operation. Yahoo focuses on reducing the cost of operation as an organizational strategy. Operation at Yahoo has indicated the decline in cost. Such a strategic move contributed not only to company operations, but also in marketing new services provided by the company.
Physical Layout and Design
Offices are important to the productivity of service companies as opposed to manufacturing companies. The company operates on an operational decision that is aimed at maximizing by encouraging interactions. The office layout decision is a long-term strategic decision that specifically affects the way humans interact. New ideas require proper sharing and communication. There are also problems like cyber-attacks that require collective action. Hence, a communication oriented office layout is important. The company also includes wireless communication devices for easy conferencing. The company has managed to increase its level of productivity and handled security issues that for a long time have impacted its marketability. The communication strategy serves organization objectives of growth and development.
Service Quality Management
Maintaining the quality of services provided to its consumers is an important operational aspect that forms part and parcel of Yahoo’s management strategies. The company actively partakes in market analysis to adapt to changing consumer demands. A shift in consumer quality needs is followed by new operation approaches. The quality management strategy is both process and marketing strategy. For instance, in addressing security issues, the company has taken extra safety measures. Quality customer experience begins with proper operation strategies.
Employees are critical resources to a company. Proper hiring and training strategies contribute towards better input by employees. Service provision entirely depends on the capabilities and motivation levels of employees. Apart from proper remuneration, employee capacity and motivation can be attained by proper training. Yahoo holds a very critical record of hiring, training and maintaining talent. The nature of the industry dictates for continuous innovation and improvement of service value. Hence, the provision of training improves employee contribution. Training programs also expose employees to changes in the industry. The ultimate benefits of well-trained employees are evident with operation efficiency achieved at minimum cost.
Safety and Security
Yahoo company has recently suffered cyber-attacks through hacking of its servers and users’ emails. The company has incurred a considerable loss in monetary as well as reputation. Yahoo is now prioritizing security by deploying tactical strategies. The first operational strategy of the company is creating more positions in the internal cyber security team (Yahoo, 2017).
Comparison of Operation Management Decisions
Based on the set of decisions discussed under each company, it is obvious that there are differences and similarities. Intel Inc. is a manufacturing company; hence decisions are mainly tailored towards product improvement. Product design and inventory management are strategic decisions that directly affect the value of the product. Security improvement is a tactical decision that responds to prevailing conditions. On the other hand, Yahoo focuses on its physical position, office layout, and employee training as key strategic operation management decision. The level and quality of service delivered is impacted by execution of the above-listed strategies.
Chambers, N. S., & Johnston, R. (2010). Operations Management. Pearson Education Limited .
Company, I. (2017). Company Overview. Retrieved from Intel.com: https://www.intel.com/content/www/us/en/company-overview/company-overview.html
Company, Y. (2017). About. Retrieved from Yahoo.com: https://about.yahoo.com/
Inc., Y. (2012). Yahoo 2012 Annual Report . Yahoo Inc.
Reid, R. D., & Sanders, N. R. (2004). Operations Management. Wiley.