Technology Impacts on Future Operation Management - Coursework Example

Technology Impacts on Future Operation Management Historical Background Towards the end of the 18th century, agriculture was the key industry in every nation. Eli Whitney’s notion of standardized parts and the arrival of the steam engine opened a way for Industrial Revolution. The source of power for its huge manufacturing facilities was from water or steam. Several countries including the United States evolved to an industrial economy from an agricultural economy (Inman, 2011). For a considerable length of time, manufacturing became more of an art rather than science. This changed when Fredrick Taylor’s systematic method of scientific management was introduced in the early 20th century. The introduction of Henry Ford’s moving assembly line and Taylor’s approach to scientific management brought the world into an era in which management was the key thing in the production of goods (Inman, 2011). During the late 1950s and early 1960s, scholars shifted from writing about operations research and industrial engineering into writing about production management. Production management became a professional field and an academic discipline. Operations techniques started to be incorporated into service when the United States economy progressed into a service economy; terms such as operations management or production came into use (Inman, 2011). Below is a summary of the history of operation management; the following concepts and tools were in use: In 1910s, principles of scientific management, industrial psychology, moving assembly line, and economic lot size. Tools used were formalized work-study and time study concepts, motion study, activity scheduling chart, EQQ applied to inventory management respectively. In 1930s, quality control and Hawthorne studies on worker motivation. Tools utilized were statistical tables and sampling inspection for quality control, and activity selection for work analysis respectively (McGraw-Hill Higher Education, 2009). In 1940s, a multidisciplinary team approach to complex system issues. The tool used was linear programming simplex method. Between 1950s and 1960s, widespread development of operations research tools. Simulation, decision theory, project scheduling techniques (CPM and PERT), mathematical programming, and waiting line theory were the tools used (McGraw-Hill Higher Education, 2009). In 1970s, there was extensive utilization of computers in business; the tools used were shop scheduling, forecasting, MRP, project management, and inventory control. Another concept used in this time was productivity and service quality; the tool used was mass production within the service sector. In 1980s, lean manufacturing, TQC, factory automation, JIT, and manufacturing strategy paradigm. Tools utilized were manufacturing as a reasonable weapon, poka-yokes, CAD/CAM, Kanban, FMS, CIM, and robots. Another concept used was synchronizing manufacturing; the tools used were OPT, bottleneck analysis, and theory of constraints (McGraw-Hill Higher Education, 2009). In 1990s, total quality management; tools that were utilized included ISO 9000, concurrent and value engineering, Baldrige quality award, quality function development, and continuous improvement paradigm. Other concepts at use during this period included; business process reengineering, six-sigma, electronic enterprise, and supply chain management. The tools used were radical change paradigm, quality improvement tools, World Wide Web, Internet, and client/server software and SAP/R3. In 2000s, e-commerce and service science, use of the World Wide Web and Internet, and the application of information technology (IT) to enhance service productivity were the tools used (McGraw-Hill Higher Education, 2009). Building Success with Operations Understanding operations is not complicated at all but there are basic factors that need to be followed as they contribute a lot to the welfare and success of an organization. Some of these factors include understanding the strategic nature of operations in the organization, the emergence of the supply chain management ideas, value that is added to the nature of operations, impacts of technology on performance and basically the competitive marketplace (eNotes.com, 2011). Technology is normally considered to be the application of knowledge and it usually takes the form of newly developed tools, processes and procedures when solving problems. Advanced technology is better as it simplifies work by establishing possible ways of building better advanced products just by using fewer resources. Technology basically modifies a product performance and increases its quality dramatically; an example to this is the electronic watch which is normally cheap, more reliable and consists less compared to a mechanical watch (eNotes.com, 2011). Operations Management and Process Technology Operations are always involved in the controlling of process technology. In order for them to do this successfully they are supposed to be capable of articulating how the technology could enhance their operations’ effectiveness, being part of the technology choice, and managing the adoption and installation of the technology so that the ongoing operations activities are not interfered with. Furthermore they enable the integration of technology into the other operations, monitoring the performance of the technology on a continual basis, and upgrading or replacing the technology if necessary (Pycraft, 2000). Current Issues in Operation Management Operations management is a vibrant field and the challenges brought forward by the global enterprise bring about new issues for the operations managers. Focusing on the future, the main challenges in operations management will be as discussed below: One of the main challenges will be in relation to the coordination and association between equally supportive but distinct organizations. In the past few years, there has been a significant outflow in the outsourcing of services and parts that were developed internally. The trend has been motivated by the accessibility of inexpensive and fast communications. There is the existence of a new set of contract manufacturers who specialize in conducting focused manufacturing activities. The effectiveness of the traditional outsourcing has made companies to consider outsourcing key corporate functions such as product development and design, packaging, distribution, information systems, engineering services, and testing (McGraw-Hill Higher Education, 2009). Another issue will be in reference to the optimization of universal production, distribution and supplier networks. A common thing in majority of the big companies is the implementation of the global enterprise resource planning system; it has challenged the managers to make use of this information. The use of the information needs a thorough understanding of “where control should be centralized and where autonomy is important, among other issues” (McGraw-Hill Higher Education, 2009). Majority of the companies have taken advantage of the systems information to optimally manage resources such as inventory, production equipment, and transportation. Yet again, another issue will relate to the increased co-production of services and goods. The internet has developed new methods for the consumer to network directly with the company. Monitoring of orders and simple direct entry is the only initial steps in value added services progression and this has been made possible by information sharing. The intelligent utilization of information technology will permit the removal of inefficient consumer oriented functions layers within the organization. This will result into a significant reduction in the cost and at the same time improving the services offered to the customer (McGraw-Hill Higher Education, 2009). Management of consumer’s touch points is one other unavoidable issue. As companies attempt to become superefficient, they frequently economize on the consumer support personnel and training that is needed to successfully staff help lines, checkout counters, and service departments. This has resulted into frustrations such as being placed in a call center for hours or getting a poor advice when interacting or networking with the company representative. The big issue here is to acknowledge that when making resource utilization decisions, the cost of losing the consumer and direct costs of staffing should be taken into consideration (McGraw-Hill Higher Education, 2009). Raising the knowledge of senior management regarding operations as an important competitive weapon will be another issue worth consideration according to McGraw-Hill Higher Education (2009). Majority of the senior executives entered their current organizations through strategy, marketing, or finance and created their own reputation in these work areas. This has led them to frequently take operations for granted. There are a number of companies in which the executive has creatively utilized operations management for purposes of competitive advantage. These companies include Dell, Southwest Airlines, Taco Bell, and Toyota. A key characteristic about these companies is that they are very profitable (McGraw-Hill Higher Education, 2009). Developments in Operations Management In the past years, several developments have been seen in operations management practice and theory. “From the interest of marketing decisions these may be considered in the context of a contribution to strategic planning and implementation, and operations technology” (Walters, 2009). The overall contribution to strategic planning can be described as the minimization of any negative potential in manufacturing; the providence of credible sustenance to the business strategy; and the contribution to development of sustainable competitive advantage. The function of operations management is to make contributions to value through the structuring of its activities such that the decisions made lead to the maximization of value driver influence impact (Walters, 2009). The Impact of Technology to the Future of Operations Management The technological developments are shaping the future of operations function. The impact of technology is significant; it has changed many markets and it has replaced the traditional open-outcry mode of trading with electronic dealing systems. The electronic dealing systems have permitted cheaper trading by eradicating the cost of floor teams and it has permitted the access of domiciled markets from locations that are outside the country. Massive volumes such as derivatives exchanges have been made possible in some markets because of the large capacity offered by the dealing systems. The change is within the context of operations function and it has been made possible through the concepts of remote clearing, paperless settlement, and straight-through-processing. Another key driver has been the requirement to create and distribute information (Loader, 2006). The significance of management information in enabling effective planning, business development, client service, and risk management is paramount to any organization that seeks to be effective. The business driver continues and “so does the need for technology to produce solutions that” (Loader, 2006) minimize costs, increase capacity, meet clearing and market developments, control risk, improve client services, support global business, and sustain the market leader position of the firm (Loader, 2006). The technological projects that will offer support to the mentioned solutions will be operations-based. This is so because the market and clearing infrastructures are changing and there is consolidation of the securities and derivatives. This will lead to the requirement for multi-product settlement systems in an operations environment that is unified. The managers who embrace technology and have the focus to develop it are the only ones who will be prepared for the challenges and changes that operations face in the future. Indeed according to Loader, (2006) while technology is the driver of businesses, operations mangers are the drivers of technology. Technologies Affecting the Future of Operations Management One of the duties of the operations manager is to be up to date with the technological developments. This will assist him in the identification technologies that “will transform operation systems in their particular industry” (Leseure, 2010). The following are examples of the current key technologies bringing transformation in a number of industries: Bio-engineering – this is where the new products are developed from the combination of biology and mechanical engineering. Nanotechnology – this is the design and manufacturing of very minute mechatronic products. The scale used for measuring the size of the product is of a few microns (Leseure, 2010). E-commerce technologies – they have led to the creation of a new field of study called e-operations in the discipline of operations management. E-operations has a strong influence on service operations management (such as the delivery of online banking services) (Leseure, 2010). Space commerce – it was once utilized within the restricted domains of the highly funded government agencies. However, a number of corporations are venturing into space commerce. A company such as Virgin Galactic provides wealthy consumers trips in the space shuttles (Leseure, 2010). Technology, Society and Futures “The pioneering school of technological determinism laid the foundation for the investigation of how technology affects society and how society affects technologies” (Leseure, 2010, p35). Operations managers are usually involved in technology management and it is imperative to note “that there is an ongoing and healthy debate surrounding the concept of technology beyond its use in operations systems” (Leseure, 2010, p46). The school of socio-technical systems argues that technical systems and social arrangements must fit well. The theory of socio-technical system has effect on the design of the work and processes (Leseure, 2010). Thus, the impact of technology on the future operations management is diverse and cannot be ignored. References eNotes.com. (2011). Encyclopedia of business. Retrieved from http://www.enotes.com/biz-encyclopedia/operations-management Inman, R. A. (2011). Operations management. Retrieved from http://www.referenceforbusiness.com/management/Ob-Or/Operations-Management.html Leseure, M. (2010). Key concepts in operations management. Thousand Oaks, CA: SAGE Publications Ltd. Loader, D. (2006). Advanced operations management. Hoboken, NJ: John Wiley and Sons. McGraw-Hill Higher Education. (2009). Current issues in operations and supply management. Retrieved from http://highered.mcgraw-hill.com/sites/0073403296/student_view0/ebook/chapter1/chbody1/current_issues_in_operations_and_supply_management.html McGraw-Hill Higher Education. (2009). Historical development of operations and supply management. Retrieved from http://highered.mcgraw-hill.com/sites/0073403296/student_view0/ebook/chapter1/chbody1/historical_development_of_operations_and_supply_management.html Pycraft, M. (2000). Operations management. Cape Town, South Africa: Pearson South Africa. Read More