- Defining Operations Management
- Organizational Decision Levels
- Key Terminology
- Critical Processes
- Measuring Productivity Levels
- Inventory Determination
- Inventory Policy Choices
- Inventory Policy in a Fixed-Order Quantity System
- Independent Versus Dependent Demand
- ABC Inventory Classification
- Vendor Managed Inventory (VMI)
- Challenges Facing the Modern Operations Manager
- Discussion Questions
Challenges Facing the Modern Operations Manager
Despite all the tools and systems at their disposal, operations managers face extensive challenges when it comes to managing an organization’s resources. The global marketplace is characterized by its substantial size and dynamic makeup. The operations manager must grasp this reality to maintain optimal process performance in a shifting global landscape. Successful operations managers stay abreast of these trends and implement proactive systems to take advantage of them. Globalization, technology advancements, and redefined marketplace priorities are among the many challenges at hand today.
Globalization has radically altered the way operations managers conduct their day-to-day activities. Landforms, distances, and time zones no longer separate people from information. Because of this, modern corporations can—and, in some competitive instances, must—base their operations in any number of countries to minimize costs and maximize performance efficiency. Consider Toyota, an automobile company headquartered in Tokyo, Japan. Toyota has made significant investments in American operations. Even though companies such as Ford and GM pride themselves on domestic manufacturing, Toyota’s popular Avalon model is actually considered one of the most “American-made” cars. Assembled in Kentucky, the Avalon contains nearly 85 percent North American parts.1 Globalization turned Toyota and other foreign automakers into giants in the United States—and nearly put American automakers out of business.
The instantaneous availability of information is directly attributable to modern technological advancements. As you will see in subsequent chapters, technologies such as global positioning systems (GPS) and radio-frequency identification (RFID) have revolutionized inventory management. Corporations can now account for inventory in real time, no matter how dispersed it is. What’s more, these technological advancements have made planning systems more precise, thereby narrowing operations managers’ margins for error. Technology is moving at breakneck speed. Keeping up can be rewarding, but failing to do so can be catastrophic.
The global marketplace has been, and is continuing to be, redefined by new priorities. With a growing population depending on a fixed amount of resources, companies are being forced to make sustainability a priority. There is no better example of corporate sustainability than at search engine giant Google. Google is famous for making use of renewable energy resources. Instead of lawn mowers, it invites goats to trim the grass of its green areas. Customer priorities are changing, too, especially when it comes to health. Because of social and political pressure, fast food companies such as McDonalds have introduced fruit to their children’s menus. Burger King recently released a new version of its French fries. Known as “Satisfries,” these French fries have 30% fewer calories than Burger King’s traditional fries. Changes such as these are impacting the ways businesses must conduct operations management and will continue to create operational challenges. The companies with the most savvy operations managers will be able to embrace the adversity challenges present and change the marketplace in the process.