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12Operations Management

Operations management


An organization’s operations and activities are effectively managed and coordinated through operations management. According to Mahadevan, B. (2010) in their book titled “Operations management theory and practice”, an organization is made up of different components and functions, which are all integrated. Operations management is entirely focused on provision of high quality goods and efficient services. Obtaining competitive advantage necessitates that a business entity tailors its operations to techniques that produce high quality goods at reduced costs. Additionally, efficient business operations ensure that produced goods are effectively distributed.

However, to achieve efficiency in business operations, there is necessity of inclusion of technology in business operations. The applicability of technology in operations management leads to increased productivity, enhanced business collaboration, improved sourcing procedures and techniques, cost effectiveness and improved interaction and participation. However, besides the positive impacts of technological inclusion into business operations, its negative impacts are worth noting. Technology has led to among other vices, ethics erosion. Similarly, implementation and subsequent inclusion of technology in operations management is costly.

This essay therefore focuses on establishing how technology has impacted on operations management in the modern business environment.

Operations Management

According to Slack et al (2013), operation management refers to efficient management of activities and resources which result to production of goods and services. Ideally, operations management is concerned with basically three technological aspects namely: Product technology, process technology and information technology. The above three technological aspects impact greatly on cost element, productivity as well as fostering competitiveness in the modern business environment. Effectiveness is enhanced through ability of employees to learn and be highly productive. The theory of learning curve suggests that employees are on constant learning, and in the long run will increase on efficiency.

Historical development of operations management

Operations management, for long, has been known to be an agent of Econmonic development in a country. In fact, to be precise, the concept of operations management began long ago, tracing back to the eighteenth century in times when Adam smith appreciated benefits brought about by labour specialization (Blecker, 2011). According to Adam Smith, efficiency and effectiveness can be highly achieved if tasks can be subdivided into small tasks. Additionally, specialization helps in improving on the skills of workers. F.W Taylor developed his theory of scientific management basing on Adam Smith’s concept. From 1930s – 1950s, production management became an acceptable term, which is in fact in use today. Due to wide application of Taylor’s principles today, managers in organizations have developed measures and techniques aimed at increasing efficiency. According to the productions theory, workers are encouraged to eliminate wastage and in the long run improve on efficiency.

Technology today

The term technology has varied meanings, depending on the context in which it is used or applied. According to Knani (2013), technology refers to the appropriate application of modern and past discoveries to improve on the production of goods and services. It can imply application of knowledge and skills, use of modern materials and application of modern efficient equipment in production of goods and services. The use of internet has brought in a lot of alterations in the way businesses compete in the business environment. For example, internet has led to the establishment of an online form of business operation known as e-commerce. E-commerce involves on-line undertaking of business operations.

According to Schneider (2014), e-commerce or e-business is rapidly changing the form of interaction between businesses and their customers, suppliers and other stakeholders, hence changing the whole form of business operations. For example, IKEA, through its innovative strategies, allows customers to shop for furniture online. Additionally, it has created a platform where customers can even dispose their furniture on-line (Edvardsson and Enquist, 2011). Today, businesses are making use of technology to alter their operations to suit the requirements of the customer who, according to Schneider (2014) is the king. For example, IKEA has developed and implemented strategies that allow customers assemble their own furniture, thereby reducing on the cost of transportation (Edvardsson and Enquist, 2011). This therefore is in line with the theory of production.

Technology and operations

The way and form in which a business entity operates and competes in business world is defined by operations strategy. Examples of operations strategies include production at low costs, production of high quality goods, increased speed of delivery of already produced goods and customization of products to meet customer requirements (Porter, 2013). Managers in an organization ought to make decisions on which operations strategy to implement keeping in mind the suitability of the strategy to various business segments. In fact, according to Fitzsimmons, Fitzsimmons, and Bordoloi (2013), managers come to realize of the tradeoff involved in business operations by deciding on operations strategies to implement, guide by business segments. For instance, it is almost impossible to strike a balance between production of low cost products and achievement of high level of customization. Similarly, striking a balance between provision of fast or high product delivery and high level of customization is close to impossible (Fitzsimmons, Fitzsimmons, and Bordoloi, 2013).

Therefore, today, in the modern business world, these forms of traditional trade-offs have been eliminated by the applicability of technology in business operations. Technology has impacted positively on business operations by enabling business entities compete simultaneously on dimensions of low cost, high quality as well as product delivery, among others (Porter, 2013). Additionally, technology has in fact set high standards for business to operate on various dimensions. For instance, business entities making use of technology such as the use of Dell computers can, besides producing high quality products, ensure that products can be individually customized and delivered to customers within a shorter period of time. This, traditionally, was not possible and firms could not therefore compete at high levels.

How technology impacts positively on operations management

  1. Productivity

One of the ways technology has impacted on operations management is through its ability to boost productivity. One of the reasons there has been, in the recent past, movement from classical to modern ways of business operations is because of productivity (Marius, 2012). For example, the use of computers in organizations has brought with it a lot of transformations. The use of computers has enabled organizations to cut on the cost of processing data, whilst ensuring that large volumes of data are processed within a short period of time. For instance, IKEA, being one of the largest multinational companies in furniture production is in a position to coordinate its operations between more than 4800 supplier outlets in 52 nations (Edvardsson and Enquist, 2011.

  1. Collaborations

Collaboration is one of the elements that ensure that organization’s objectives are met within the stipulated period of time with minimum use of resources. Continuity in production of goods and services, according to Marius (2012), rests on proper coperation between departments and team members. Technology has improved much on how collaborations are handled in an organization. For example, the application of teleconferencing or rather teleworking has enabled business entities to carry on their operations without the necessity of physical presence of an individual (Marius, 2012). With the use of teleconferencing, a person can be out on official duties, but is able to undertake other instructional duties in the absence of his or her physical presence. Therefore, technology has impacted on business operations by boosting on intense collaborations.

  1. Improvement on resourcing

Besides technology impacting on operations management through increased productivity and enhanced collaborations, technology has also impacted on ways in which business entities become resourced (Marius, 2012). For example, the use of cloud computing has allowed various businesses access a varied lot of resources ranging from software applications, hardware requirements to increased storage and processing capabilities through online platforms. Similarly, with the help of technology, business entities can outsource or even delegate parts of their business operations to third parties (Marius, 2012). Organizations prefer effective yet cheap facilities that improve on operations management.

  1. Enhanced interaction and participation

Social media is impacting business operations in the modern contemporary society. Technology, therefore impacts on operations management through the use of social media. Social media platforms like Facebook and twitter are powerful marketing tools in the modern business world (Marius, 2012). Besides being powerful, marketing tools for businesses, social media platforms are tools of “voice” to customers, both potential and existing. For example, most organizations make use of the social media to obtain feedback from customers relating to organization products and use the information or feedback to improve on their products and services. Through initiatives of crowdsourcing which include crowd-creation and crowd-wisdom, people can share business ideas and innovations to enhance development (Marius, 2012). For example, General Mills, a large and well established food processing company has made use of the concept of crowdsourcing to generate concepts and ideas from various partners globally in order to improve on its innovative strategies. The company has established a network known as Worldwide Innovation Network to foster its crowdsourcing initiatives (Knani, 2013).

  1. Cost management

Because of intensive competition in the modern business world and the need of businesses to enjoy a competitive advantage, businesses are focusing on adopting and implementing cost cutting business operations (Marius, 2012). According to the theory of production, businesses aim at ensuring that they develop an effective input-output strategy that ensures cost reduction in the long run. Technology has impacted positively on business operations by enhancing cost reduction. Technology provides or offers operations alternatives which are cost effective and which ensure continued production of high quality goods, thereby enabling an organization obtain competitive advantage (Marius, 2012).

Negative impacts of technology in operations management

Most businesses have shifted from the traditional to modern ways of data storage, processing and dissemination of processed information. For example, most businesses make use of technology for real time production and efficient distribution of goods and services in order to eliminate wastage and other costs that come along with the application of traditional methods of operations management (Bozarth and Handfield, 2012). Similarly, businesses are implementing modern methods of managing inventory to enhance continuity in business operations. Additionally, modern communication between business stakeholders like customers and suppliers are turning out to be technologically driven (Bozarth and Handfield, 2012).

However, if a poor allocation of resources is made such that technological needs are not taken care of in terms of sustainability, business operations could be prone and subjected to a lot of transactional errors, leave alone inefficiencies. High dependence on technology could lead to inefficiencies in terms of processing and disruptions of customer services, which in the long run could lead to tainted corporate image identity and consequent customer loss (Knani, 2013). Information technology has led to ethics erosion in the way business operations are carried out. For instance, through the use of the internet to undertake money oriented transactions, the technologically driven idea has led to the emergence of internet hacking where money can be stolen from one’s account if inappropriate security measures are not in place (Knani, 2013). Additionally, technological application in operations management is prone or vulnerable to a lot of interruptions as a result of events which could be beyond an organizations control. For example, interruptions brought about by acts of God like earthquakes and other natural disasters (Knani, 2013). However, in as much as organization could have counter measures to mitigate risks arising from occurrence of such catastrophes, the measures could be insufficient and inadequate to prevent alteration of operations.


Application of traditional and classical methods of business operations in today’s business environment has proved to be not only ineffective, but also costly. The cost element, coupled with intense competition in the modern business environment has necessitated the development of strategies that are cost effective and competitively beneficial. Therefore, development of such effective strategies is dependent upon an organization’s inclusion of technology in its operations management. The dynamism encountered in the business world is so intense that failure of an organization’s integration of technology into its business operations can be a source of operation fatality. However, despite the positive impact technology has on operations management, limitations are also there. Ethical erosion and cost of implementation are some of the limitations, technology has on operations management. In conclusion therefore, technology has impacted on operations management both positively and negatively, with the positive impacts outweighing the negative ones.


Blecker, T 2011, ‘An institutional approach to operations management in Internet based production concepts’, International Business & Economics Research Journal (IBER), vol. 2, no. 11, pp. 1–33.

Bozarth, C.B and Handfield, R 2012, Introduction to operations and supply chain management, 3rd edn. Harlow, Pearson Education.

Edvardsson, B and Enquist, B 2011, ‘The service excellence and innovation model: Lessons from IKEA and other service frontiers’, Total Quality Management & Business Excellence, vol. 22, no. 5, pp. 535–551.

Fitzsimmons, J.A., Fitzsimmons, M.J and Bordoloi, S 2013, Service management: Operations, strategy, information technology, 8th edn. London: McGraw-Hill Education — Europe.

Knani, M 2013, ‘Exploratory study of the impacts of new technology implementation on burnout and Presenteeism’, International Journal of Business and Management, vol. 8, no. 22, pp. 92–95.

Mahadevan, B 2010, Operations management theory and practice, 2nd edition, 2nd edn. New Delhi, India, Pearson Education India.

Marius, M 2012, 6 ways technology is changing the way we do business, Viewed 31st August 2016 from

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Schneider, G 2014, Electronic commerce, 11th edn. Stamford, CT, United States, Cengage Learning.

Slack, N., Brandon-Jones, A and Johnston, R 2013, Operations management, 7th edn. Harlow: Financial Times Prentice Hall.