Strategic Operation Management - Essay Example

To begin with, Schmenner & Swink (1998) argue that operations management has its basis in the known theories of natural science. They argue that the discipline of operations management can explain the reasons why two production centers are not alike in their productivity. According to them, certain deductive laws such as Law of Variability, and the Law of Bottlenecks can explain the ways of improving productivity to a certain extent. Productivity gets hampered due to myriads of variability factors in the processes.

It can be measured in terms of labor output, machine output, or total factor productivity output. Similarly, when bottleneck issues are addressed, overall productivity can be improved. The effect of above mentioned laws can be further augmented by certain other laws that have been derived out of real life experiences and they are: the Law of Scientific methods, the Law of Quality and the Law of Factory Focus. The law of scientific methods, for instance, is based on empirical findings using industrial engineering tools.

The law of quality states that productivity gets enhanced as quality of product improves through changes in processes or product design. The law of factory focus explains why outsourcing has become so popular in current times. The rationale is that only core functions are focused within the unit and all other activities such as small component or utility services are procured from outside sources. Other processes or parts are outsourced to those who can better produce them more efficiently and can be assigned as their core activities.

In recent years, supply chain management has been a most crucial issue for several transnational companies. They not only market their products globally but operate several production centers across several countries. Their success in these countries depends upon how efficiently they manage and coordinate different activities. Supply chain management is becoming more and more crucial for their success. Several theories have emerged in last decade or so that revolve around supply chain management issues.

Kor and Mahoney, (2004) argues about resource-based view theory that resources of the organization create, sustain and built competitive advantage of the firm. The origin of this theory goes back to the theory of comparative advantage proposed by famous economist David Ricardo. The crux of the theory lies in its recognition that resources are rare and cannot be substituted to gain competitive advantage. Many authors emphasize that in the changing world scenario, knowledge is a resource that is crucial for gaining competitive advantage.

For most modern organizations, this is a discerning characteristic to differentiate from others (Grant, 1997). Strategic decision making has been cornerstone of the successful organization that is where Strategic Choice Theory comes into play. According to this theory, managers play a crucial role in making strategic decision to advance the organization towards fulfilling its objectives (Ketchen and Hult, 2007). McNichols and Brennan (2006) propose Network perspective (NP) as an important theory that can be applied in augmenting supply chain management efficiency.

According to NP theory, networks among the support organizations increase competencies and resource capabilities of firms through coordinated activities (Robert and Mackay, 1998). It