What is your operation’s contribution to the organization’s goals?

The ability of any operation to play a strategic role within the organization can be judged by considering the organizational aims or aspirations of the operations functions.

A Four-Stage Model was developed, by Professors Hayes and Wheelwright of Harvard University, with later contributions from Professor Chase of the University of California, to evaluate the competitive role and contributions of the operations function of any company.  Particularly, black owned companies in South Africa that are in dire need to breach the private sector.  This model traces the progression of the operations function, of  from a largely negative role of Stage 1 operations to the dynamic element of competitive strategy in Stage 4 operations.

In a Stage 1 organization the operation is considered as a “necessary evil” as other functions regard it as holding them back from competing effectively.  The operations function becomes reactive and inward looking and contributes minimally towards competitive success.  The rest of the organization would inevitably not look to operations as the source of any originality, flair or competitive drive.  The operation becomes “internally neutral”, a position it attempts to achieve not by any positive aspirations but by avoiding the bigger mistakes.

Breaking out of Stage 1 begins by comparing itself with similar companies or organizations.  During this stage of progression, the organization may not yet be particularly creative in the way it manages its operations but is attempting to be appropriate, by adopting best practice from its competitors.  Using the best ideas and norms of performance from the rest of its industry is trying to be externally neutral.

Stage 3 operations aspire to be clearly the very best in the market.  Organizations try to achieve this by understanding the company’s competitive or strategic goals and then organize and develop the operation’s resources to excel in the sector that the company needs to compete effectively.  Operation managers will now develop appropriate resources and assuming the role of implementers of strategy.  The operation will soon become internally supportive by providing a credible operations strategy.

A Stage 4 company views the operations function as providing the foundation for its competitive success by focusing on all long term goals.  Likely changes in markets and supply will be forecast and operations-based strategies will be developed to provide the company with the performance required to compete in future market conditions.  It becomes central to strategy making.  Stage 4 operations are creative and proactive and are likely to organize their resources in ways which are innovative and capable of adaptation as markets change.  After all, market leaders tend to be one step ahead of competitors in the way they create products and services and organize their operations.

This Four-Stage Model assesses the performance of the operation compared to the function’s latent aspirations.  As companies move from Stage 1 to Stage 4 there is a progressive shift from its contribution being negative  through to a paradigm shift of strategic contributions.

The roles of the operations function

Any part of your organization will have their own role to play in achieving its success.  At the simplest level the role of each of these functions is reflected in its name.  In an era when operations are continually being outsource, the operations function will need to justify its continued existence within the business.

One role of the operation is to support business strategy.  It must develop its resources to provide the capabilities which are needed to allow the organization to achieve its strategic goals.  All important elements of the operation, its technology, staff and its systems and procedures, must be appropriate for the company’s competitive strategy.  The better the operation is at maintaining its infrastructure, the more support it is giving to the company’s strategy.  A different business strategy would require the operations function to adopt different objectives.

Companies continue to formulate some kind of strategy during its existence but it is the operation which puts it into practice.  Strategies are by no means tangible and all you can see is how the operation behaves in practice.  In essence, the most original and brilliant strategy can be rendered totally ineffective by an inept operations function.

Another role of the operations part of the business is to drive strategy by giving it a long-term competitive edge.  Different functions within the business have different effects on a company’s ability to prosper.  For example, if the finance function does not control cash flow accurately, the business could run out of cash and all business activity would soon cease or have a serious short term effect on business.  Poor marketing management will hamper the company in the medium term.  No amount of efficient financial and marketing management can compensate for poor operations performance though.  Sloppy service, slow delivery, broken promises, too little choice of services or an operations cost base which is too high will prove detrimental to company long term goals.  Any business which makes its services better, faster, on time, in greater variety and less expensively than its competition has the best long term advantage any company could desire.  All the things which promote long term success stems directly or indirectly from the operations function.  In effect, this function becomes the custodian of the organizaton’s competitiveness.  It ultimate role is to do things better and deliver services better than similar operations.

In conclusion, operations must support strategy by developing appropriate objectives and policies for the resources its manages, make strategy happen by translating strategic decisions into operational reality and provide the means to achieve competitive advantage.

The responsibilities of operations managers

Operations managers are responsible for all activities in the organization which contribute to the effective production of a service.

The responsibility of operations management also explores the possible consequences of the actions of the other functions and their impact on the operation.  This becomes an indirect responsibility of the operations manager, namely, to inform other functions of opportunities and constraints provided by the operation’s capabilities.  They will need to discuss with other functions how both operations’ plans and their own plans might be modified for the benefit of both functions.  Other functions will subsequently be encouraged to suggest ways in which the operations function can improve its service to the rest of the organization.

This approach of mutual responsibility for other functions’ activities seem somewhat idealistic underlying what should be good practice in any organization.  However, internal customer-internal supplier relations yield huge benefits in breaking down some of the traditional organizational barriers.

Regarding the direct responsibilities of operations management, the exact nature of these responsibilities depend on the way the organization has chosen its operation function.

When the operations management team attempts to understand what it is trying to achieve two sets of  decisions are involved.  The first is to develop a clear vision of what role the operation is to play in the organization illustrating the operation’s contribution to the organization achieving its long-term goals.Then determine whether these goals have any implications for the organization’s performance objectives.  These performance objectives include the quality of the service, the speed with which they are delivered to the customers, the dependability with which the operation keeps its delivery promises, the flexibility of the operation to change what it does and the cost of producing the service.

Operations management involves hundreds of minute-by-minute decisions throughout the day as well as week.  It becomes imperative for operations managers to have a set of general principles which can guide decision making towards the organization’s longer-term goals called an operations strategy.  This involves placing operations strategy in the general strategy hierarchy of the organization, connecting functional and business strategies together.  Operations performance objectives will need to be prioritized to positively affect customer needs and competitor behaviour.

The design of the service is crucial to an area which is always under the direct responsibility of the operations function which is the transformation process itself.  This process design means designing the whole network of operations which provide inputs to the operations function and deliver its output to customers.

In order for design activities to work effectively they need to be planned and controlled.  This involves the deciding of what the operation’s resources should be doing, then ensuring that they are really doing it.

The strategy has been formulated, the services and processes designed and the work is being planned and controlled on an ongoing basis. The continuing responsibility of the operations manager is to improve the performance of this operation.  Failure to improve at least as fast as competitors or at the rate of the customers’ rising expectations is to allow the operations function to fall short of organization expectations.  Or simply making operations better is stopping them from going wrong in the first place.

The elements of job design

Job design defines the way in which people go about their working lives and positions their expectations of what is required of them.  Perceptions will also be influenced as to how they contribute to the organization’s goals and vision.  Interactions with colleagues will be governed and channeled and formalizing the flow of communication between different parts of the operation.  It helps to develop the culture of the organization: its shared values; beliefs and assumptions and should be viewed as the central aspect of the design of any transformation process.

Delivering a service on a continuous basis involves a whole range of different tasks which need to be divided between all role players in the operation.  The different task allocations will depend on your job design approach.  One operation might include a repetitive task to encourage simplicity and efficiency.  Or allocate a wide variety of tasks to each staff member to reduce monotony.

Sometimes the sequence of tasks is dictated by the design of the service or the sequence is determined by the desire to avoid mistakes. A standardized sequence of tasks is designed largely to prevent errors in the process.

Some jobs can be performed effectively in more than one place.  However, different locations could also mean different task allocations.

Instead of allocating a well defined set of tasks to each person in the operation, a larger set of tasks are allocated to a group of people.  This group might choose, or be guided to, a flexible task-sharing, or a task-rotation, pattern of working.  The success of this group depends on its size and its interactions with other groups and individuals.

Very few jobs do not involve interaction with tools, equipment, machines or facilities.  Inappropriate positioning of the hardware elements could result in an ineffective interface even though the task is well defined.

The conditions under which jobs are performed could have a significant impact on personnel’s effectiveness, comfort and safety and not the details of the tasks themselves.  Typical decisions include determining lighting intensity, noise control or air quality.

There is a difference between allocating tasks and encouraging autonomy depending on what the job implies.  Allocating the responsibility for the effectiveness implies that the staff can also modify the way a task is performed.

The decisions in the elements of job design have implications for the skills and capabilities which staff will need to perform their jobs effectively.  The skills necessary might include simple manual skills, monitoring and measurement skills, scheduling skills or even problem-solving skills for improving the job.