Operations Management and Strategy

MANAGEMENT OPERATIONS AND
STRATEGY
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Table of Contents
Key areas of operations management........................................................................................3
References..................................................................................................................................9
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Key areas of operations management
peration management is one of
the critical areas of business
management which deals with
various functions in internal organisational
control such as supply chain and logistics,
quality management, inventory
management and warehouse management
and productions management. It can be
defined as a part of administrative
functions for any company that can help
the organisation in boosting its overall
market performance in both long and
short-term. Hence, the critical areas of
operations management involve the areas
of organisational management as
mentioned above (Jacobs et al., 2014).
However, to understand the vital areas of
operations control, it is necessary to
understand the various strategic
frameworks of operations management.
O
Strategic frameworks of operations
management: Heizer (2016) identified that
at present operations management
comprises of holistic concept that involves
many processes which contain only
strategic frames. Different experts at
different times have developed different
vital structures that leading organisations
can follow. Similarly, leading business
enterprises have also developed different
strategic frameworks over time. In this
article, 6 different strategic contexts can be
identified for operations management.
These are
1. Lean operations management
implementing continuous improvement
(CI),
2. Business process reengineering (BPR),
3. Enterprise Resource Planning (ERP),
4. Total quality management (TQM),
5. Agile supply chain,
6. Lean supply chain and
7. Quick Response Manufacturing (QRM).
Figure 1: Strategic frameworks of
operations management
While all the processes as mentioned
above are different frameworks of
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operations management, Hill framework
describes a framework for formulating
operations strategy (Meyer et al., 2017).
Hill framework describes 5 steps in
developing operations strategy which is as
follows.
1. Defining corporate strategy
2. Determining market strategies for
meeting organisational objectives
3. Assessing the way by which
different products can gain
competitive advantage
4. Establishing more suitable mode of
delivering products
5. Providing infrastructure to support
operations management
Each of the above mentioned different
steps can use the strategic frameworks
discussed above. The strategic context of
lean operations aims towards eliminating
wastes and bringing a culture of
continuous improvement through lifelong
learning. It uses the concept of Kaizen for
moving tactic knowledge to explicit
knowledge. BPR, on the other hand, can
be explained as a basic reconsidering and
radical design applied by the business
process so that dramatic improvements can
be achieved in critical yet contemporary
measures of performance which are cost,
speed, quality and service. Enterprise
resource planning or ERP is an
information system used as a strategic
framework for operations management in
which large amounts of data associated
with organisational functions and
performance are managed computationally
(Johnson, 2014). TQM is a framework of
quality management which takes a
philosophical approach whereby it aims to
achieve high quality as per consumer
perceptions using processes like statistical
process control SPC, SIX Sigma, DMAIC
cycle and PDCA cycle. Agile supply chain
aims towards overcoming lead time gap by
functioning through demand-driven order
thus making the supply chain much
shorter. Lean supply chain, on the other
hand, aims towards reducing wastes
regarding time, cost and quality in the
supply chain. Quick Response
manufacturing or QRM is an organisation
broad strategic framework aiming towards
lowering enterprise-wide lead time. Apart
from strategic frameworks, operations
management also involve specific design
factors that shape operations management
(Hitt et al., 2016).
Design factors shaping operations
management: Operations management for
any organisation such as One ELM pub
involves specific design factors which are
fundamentally nothing but influencing
factors that help in shape the basic and
advanced operations management. Factors
like organisational complexity, resource
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dependence, competition, suppliers,
customers, substitute products and new
market entry. For instance, organisational
complexity is determined by the type of
organisational structure such as
bureaucratic, divisional, matrix, functional
or tall decide which strategic framework
the organisation will follow for executing
functions of supply chain and logistics,
quality management, inventory
management and warehouse management
and productions management. On the other
hand, resource dependence is a factor that
determines how the organizational
resources both external and internal decide
operational behaviour or strategic factors
(Van Der Aalst et al., 2016). For instance,
resource need may help an organisation
like One ELM pub to undertake ERP for
resource management computationally.
Competition or rivalry helps an
organisation in designing its production,
quality framework or supply chain strategy
so that market advantage can be retained.
Factors like customers shape operations
management function on quality and cost
front. Consumer perceptions of quality and
cost as well as their expectations shape
operations strategy relating which quality
framework will be applied to managing
quality of the product for instance SIX-
sigma. Suppliers are a crucial factor which
most influences the supply chain
management decisions of operations
management. For example, whether an
organisation is to use agile supply chain or
lean supply chain is highly dependent on
the numbers of suppliers available, the
type of suppliers and their capabilities.
Newmarket entry strong influences
operations management significantly
unless they come up with such an
innovative idea that grasps customer
attention promptly. Lastly, substitutes are
nothing but substitute products available in
the market which shapes operational,
strategic decisions relating to production
management. Based on the number of
substitute products available and their
popularity operations management for an
organisation is shaped towards innovative
functions and processes (Krajewski et al.,
2016).
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Fig: Design factors shaping operations
management
Application of fundamental operational
improvement concepts: Organizations
having established a well-shaped
operations management also consider
operational improvement concepts. These
concepts involve elements like Asset
Optimization, Quality Improvement,
Safety Performance, Project Execution,
Supply Chain, Process Improvement,
Shutdown Management, Reliability,
Inventory Management and Value
Engineering. Each of these concepts has
specific applications within operations
management for improving its overall
functionality. For instance, asset
optimisation helps in organisational
resource planning thus reducing waste and
internal costs. Consequently, quality
improvement concepts such as six-sigma,
TQM helps in updating the definition of
product quality concerning performance,
features, reliability, durability,
serviceability aesthetics and cost
(Berenguer et al., 2015). Safety
performance is concerned with safety
management in organisational functions
such as product safety, safety in logistics
and supply chain. Operational
improvement concept associated to project
management focus on ensuring that
project aims are accomplished within
stipulated time and without exceeding the
perceived costs as well as meets the
expectations related to outcomes. Supply
chain involves concepts like lean and agile
supply chain for continually improving
their supply chain, logistics and inventory
management. Contrarily, process
improvement is more concerned with
improving the established organisational
process concerning reducing time, cost,
labour and waste (Harvey et al., 2016).
Application of the concepts of quality
management to organisations: quality
management of organisations use concepts
such as TQM, Six-sigma SPC, DMAIC
and PDCA cycle.
 TQM: fundamentally TQM is a
broader concept in which customer
defined the quality concept. The
necessary application of TQM
involves that quality maintenance
and management becomes a
responsibility of all employees and
all parts of the organisation rather
than being the responsibility of
operations management or quality
team. TQM also results in
identifying and minimising all
costs associated with quality. TQM
functions for establishing
continuous improvement culture
within the organisation. Its purpose
also involves using systems and
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standards of quality measurement
such as European Quality Standard
or ISO9000 (Smith et al., 2014). SIX-sigma: The application of
Six-sigma involves achieving a
quality level which falls within 6
sigma controls. It helps in
improving the effectiveness and
efficiency of a product or process
within an organisation. It compares
process outputs with customer
requirements. SPC: SPC or statistical process
control examines the quality of a
process or product by identifying
the nature of variation in a process
which can either be caused by
chance cause or assignable cause. DMAIC: DMAIC framework
functions by executing quality
assessment functions. It identifies
the potential areas of improvement
for defining the scope, decides the
characteristics of the requirements
of the processes for measuring.
Also, it uses the information
gathered during the measurement
and document current performance
for analysing. It brings holistic
improvement for eliminating the
cause associated with non-random
variations. Lastly, it imparts
control over the functions by
verifying and embedding changes
(Johnson, 2014).
Role of operations within a range of
business organisations: Throughout the
article, fundamental concepts and areas of
operations management have been
discussed, however; this discussion
remains incomplete unless the primary
roles of operations management are
outlined within a range of organisations.
Following are the critical roles of
operations management in different
organisations.
1. Resource management
2. Production management
3. Quality management
4. Supply chain and logistics
management
5. Inventory management
6. Human resource management
7. Financial management
8. Organizational goal setting
9. Improving internal
communications
10. Asset management and
11. Cost management.
From the roles mentioned above, it is clear
that operations management is a
multifaceted and organisation extensive
function that works by interdisciplinary
action. Therefore, the holistic role of
operations control is ensuring excellent
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organisation improvement in different
areas so that overall performance of the
organisation reaches efficiency (Heizer,
2016).
The article ends with the concluding note
that strategic operations management is an
essential task for an organisation for
achieving efficiency and ensuring
effectiveness in their output.

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References
Berenguer, G., Keskinocak, P., George Shanthikumar, J., Swaminathan, J.M. and
Wassenhove, L.V., 2015. Special Issue of Production and Operations Management: Not for
Profit Operations Management. Production and Operations Management, 24(1), pp.179-180.
Harvey, J., Heineke, J. and Lewis, M., 2016. Editorial for Journal of Operations Management
special issue on" Professional Service Operations Management (PSOM)". Journal of
Operations Management, 42, pp.4-8.
Heizer, J., 2016. Operations Management, 11/e. Pearson Education India.
Hitt, M.A., Xu, K. and Carnes, C.M., 2016. Resource based theory in operations management
research. Journal of Operations Management, 41, pp.77-94.
Jacobs, F.R., Chase, R.B. and Lummus, R.R., 2014. Operations and supply chain
management (pp. 533-535). New York, NY: McGraw-Hill/Irwin.
Johnson, P.F., 2014. Purchasing and supply management. McGraw-Hill Higher Education.
Krajewski, L.J., Ritzman, L.P. and Malhotra, M.K., 2015. Operations management: processes
and supply chains. New York, EEUU: Prentice hall.
Meyer, G.D., Neck, H.M. and Meeks, M.D., 2017. The entrepreneurship‐strategic
management interface. Strategic entrepreneurship: Creating a new mindset, pp.17-44.
Smith, L., Maull, R. and CL Ng, I., 2014. Servitization and operations management: a service
dominant-logic approach. International Journal of Operations & Production Management,
34(2), pp.242-269.
Van Der Aalst, W.M., La Rosa, M. and Santoro, F.M., 2016. Business process management.
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