OPERATIONS AND FUNCTIONS OF MANAGEMENT

Operations and Functions of Management



Operations and Functions of Management

1. Introduction

Operations Management (OM) is a function that enables organizations to achieve their goals through efficient acquisition and utilization of resources (Krajewski et al., 2007; Chase et al., 2006). In earlier decades, the term “Operations Management” referred primarily to manufacturing production. However, over the period of time the field has expanded to include service systems as well, since operations permeate every functional area of the organization ranging from marketing, accounting, purchasing/logistics, information management to engineering and human resources. Emphasizing this shift, Chopra et al. (2004) define the area of OM as the design and management of transformation processes that create value for society. In fact, this shift makes the limits of OM field blurred (Hayes, 2000; Pilkington and Liston-Heyes, 1999). However, OM is crucial to any organization because only through successful management of people, capital and materials that an organization can meet its goals.

As Figure 1 illustrates, OM is management of a systemic transformation process to convert a set of inputs into outputs (Knod and Schonberger, 2001; Chase et al., 2006; Russell and Taylor, 2006). These inputs include labor, equipment, raw material, information and other capital resources, while the outputs are goods and services. Customers could participate to define the requirements of the final goods and services in terms of cost, quality and variability. Feedback on the products and services can be received from the marketplace and the service centers. In this environment, OM serves as a continuous improvement process to enhance quality, productivity and customer satisfaction.

2. Methodology

The OM-based literature has provided several approaches to analyze the evolution of OM and to identify the main trends in each era. One widely used approach is to examine the recent publications and identify the main interests in the relevant period and compare the findings with those of the past studies. This approach has been adopted by several researchers (e.g. Amoako-Gyampah and Meredith, 1989; Filippini, 1997; Scudder and Hill, 1998; Pannirselvam et al., 1999; Pilkington and Liston-Heyes, 1999; Johnston, 1999). As Filippini (1997) points out, OM is very much of an applied discipline responding to issues emerging within industry. Pilkington and Liston-Heyes (1999) even extend this view further that theoretical developments tend to lag well behind innovations made by practitioners. Therefore, it is somewhat difficult to envisage the research fields and future of OM drawing solely on existing publications.

The second approach focuses on the periodic survey of firms with regard to their problems and strategies (e.g. Ward et al., 1998). The use of case studies and panel of experts to identify the benefit of a specific OM topic is among the other approaches to elicit the feedback of practitioners.

3. Operations management - past: shift of focus from cost to quality

According to Skinner (1985), the functions of OM first came into being during the period of 1890-1920 with the works of Frederick W. Taylor, Frank and Lillian Gilbreth and Henry L. Gantt. This era was later defined as “scientific ...