The notion of Operations Management (OM) resembles that of a tree with various branches attached to it; although each of the branches represents a separate icon, their roots are linked. Here, the various branches stand for Logistics, Purchasing, Supply Chain Management (SCM), Management Information Systems (MIS), Accounting, Engineering and Marketing. All have a different persona but play a significant role in the implementation of Operations Management and therefore the executor is required to have adequate knowledge of these functions.
OM is not only about the different operations of a business, it affects every facet of the organization starting from the core business activities to the tiniest detail applicable. For that reason, the traditional approach to encourage the operational point-of-view regarding the OM enterprise is not appropriate. Also, other factors such as reporting lines, performance measures, budgets and reward structures accompanied by the cultural aspects continue to sway these functions and the organization as a whole. The failure of Operations Management initiatives to incorporate these factors in the process of implementation reduces its effectiveness. This point has been validated by previous research (discussed below) which states that to avail the maximum benefits derived from Operations Management procedure, we need to work towards reducing the gap between the organization and the different operations, as both normally run on parallel roads with different ideologies. Along with this a thorough understanding of the OM concept and factors influencing its success and failure is vital to its success; otherwise the execution of Operations Management process will go down the tube (Stevenson, 2012).
Suggestions for Operations Manager at Johnson and Johnson Company
Four OM Capability Domains
For Johnson and Johnson Company, the structure of OM can be designed in various ways, but the elements that make up this structure will remain unchanged. The most important element relates to the factors that spur the Operations Management initiatives. These factors are covered under the umbrella of OM capability domains and are classified as forecasting and designing, planning, coordination, understanding, improvement, scheduling and inventory. The way this umbrella influences the OM implementation in various situations is recapitulated and explained below.
Forecasting, design and planning process
As explained earlier, Operations Management is not about a single entity or function. For forecasting and design, the key concept talks about linking activities in a manner such that the output of one activity becomes the input of another. This liaison between different activities or organizations is termed as planning and coordination. For example, we can use collaborative planning and forecast replenishment (CPFR) to reach to a ballpark figure for planned shipments to a customer, in the same way, expected output of one activity can be altered to meet the specifications of another entity's requirements. This topic has proved to be popular amongst researchers, as each one of them analyzed it from a different perspective and reached to rational conclusions. There is a profuse collection of editorials (Barratt & Oliveira 2001: Dewett & Jones 2001: Frohlich & Westbrook 2001: Frohlich & Westbrook 2002: Hill & Scudder 2002: Lejeune & Yakova 2005: Mentzer, Foggin & Golicic 2000: Shah, Meyer-Goldstein & Ward 2002: Tang & Tang 2002) to evaluate the affiliation between strong coordination and competitiveness. Amongst other researchers, work of Gattiker and Goodhue (2005) is worth mentioning as they focused on manufacturing industry and established the way in which ERP can assist in forecasting, designing and planning to bring a company in line with customer expectations.
Scheduling and Waiting lines
The operational manager needs to understand that every entity has certain boundaries, which limits their ability to improve and be successful. An integrative Operation Management framework can only be effective if an entity is responsive to other entities competence, aptitude and precincts. For example, doubt over supplier's ability to live up to customer's expectation can be reduced through introduction of supplier certification programs. An initiative to understand other entity's potential is demonstrated through SCOR model. SCOR model is based on building blocks used to manuscript the requirements, capabilities and limitations of each department in the company and each organization in the supply chain. Another attempt was the introduction of quality model by Beamon and Ware (1998). Along with this, other researchers (Lejeune & Yakova 2005: Spekman et al. 1998) also emphasize on the significance of understanding requirements, potential and capacity.
The key concepts here are "Understanding" and "Coordination," which are similar to the extent that both talk about information sharing, and therefore can be placed opposite to each other. Although coordination of wherewithal meets short-term goals and understanding will help the entities in long-term, both are related.
Improvement and Constraints
Improvement is an ongoing process with no end to it. As environment changes and introduces new challenges, entities strive towards removing waste and adding value adding activities in order to survive and remain profitable. An example would be the use of reengineered logical process to reduce packaging waste or to get associated with suppliers that have launched six sigma programs (Lejeune and Yakova 2005).
Product lifecycle and lean operations
An end product or service is produced as a result of combined effort of all entities involved in the process. This can be explained in more detail with the help of an example. If in the process of house building or renovation, supplier assigns an engineer to remain on site at all times to deal with customer issues regarding the design and material specifications, the end result is more likely to meet customer's expectations. Also, instead of component blue prints, customer can inform the supplier of product requirements and offer support to develop the product according to those specifications. Joint efforts of customer and supplier will never let the project end up in disaster. The end result is more likely to be successful (Bonner 2005: Choy et al. 2004: Petersen et al. 2005: Tracey 2004).
Inventory and capacity management
An ideal situation for an operations manager is when the company output is able to meet its demands. Surplus capacity is not only uneconomical and but also pricey. However, less capacity implies discontent clients and low profitability. Coming up with an accurate figure for capacity building needs having precise forecast of demand and supply. Furthermore, the company also needs the ability to convert forecasts into capacity requirements, and ultimately put a process in place, which is capable of meeting client requirements. Nonetheless, process variation as well as demand variability can negatively influence the realization of equilibrium amid company output and demand. As a result, to increase efficiency, operational managers at the Johnson and Johnson Company need to manage variation as well (Stevenson, 2012).
An Integrated Framework for Operations Management at Johnson and Johnson
As described earlier, all operational activities in an organization are connected. A large number of researchers such as, Boyer et al. (2000) along with Fine (2000), as well as, Stallkamp (2005) have examined the direct and indirect relations between these operational functions and concluded that amalgamation is essential to an organization's success. Stank et al. (2001a) is an author, who after a detailed study of all aspects of OM procedures, made a distinction between internal and external integration. Internal integration relates to the relationship between different functions of an entity, whereas external integration is concerned with different organizations involved in operational processes. Despite the difference highlighted, both tend to be related. This is confirmed by Stank, Keller, and Daugherty (2001) who emphasized on the fact that an organization whose operational functions are not connected cannot have a strong liaison with other organizations. This raises a vital question, how to integrate the operational functions of an organization to achieve desired objectives? For this, we can refer the influential work of Wheelwright and Hayes (1985) that highlighted the two phases which should be monitored when blending manufacturing strategy with the corporate strategy of an entity. These two phases are focus, which can be inward or outward, and nature which can be either reactive or proactive. Considering this viewpoint, we can also deduce that scope and perspective are two additional factors that can affect the integrated operational management framework. As a result four levels of OM integration have been identified in this paper.
Takala et al. (2006) have termed these levels as a graphical representation of concepts analyzed from all aspects, whether they are multi-dimensional, multi-focused or hierarchical. They developed a sand cone model where structure of sand cone is a symbol of an organization's ideology. Just as the small particles higher up the cone gain their strength from the steady foundation of large particles on the surface, the core value of customers as shown externally through hierarchy and attitude is based on the internal potency of the organization.
In most organizations, the prime focus has been on integrating operational activities and therefore this is can be the first level of integration termed as functional integration. At this level organizations fail to take advantage of the power that comes from the use of capability domains. This is because although the aim is…