Operations Management




Operations management is a discipline that is seen by some as caught between the pragmatic and the theoretical. In common with its cognate disciplines such as operational/operations research and information systems – and indeed systems thinking more generally – there is often an uneasy tension between the need to be able to carry out research that leads to generalizable findings and the desire for actions that make an impact in specific cases.




With a field that is practice based, and thus constantly evolving, such as operations management (OM), too precise an attempt at definition can be unhelpful. The definition used here will thus be the one implied from the Academy of Management’s Operations and Supply Chain Management Division: ”the management of the transformation processes that create products or services” (http://aom.org/Divisions-and-Interest-Groups/Academy-of-Management-Division—Interest-Group-Domain-Statements.aspx#oscm). Since every organization offers some kind of product and/or service, it may be seen that the scope of OM is, quite literally, the management of these transformation processes in all organizations. An authoritative and readily accessible source of definitions for the field of operations management is Hill’s Encyclopedia of OM.

It is difficult, if not impossible, to establish a precise starting point for the field of operations management. OM problems have been investigated for centuries, if not millennia. Some trace the discipline of OM back to F. W. Taylor’s ”scientific management” in the early twentieth century, or indeed the development of interchangeable parts by Eli Whitney at the beginning of the nineteenth century. As a discipline, however, OM emerged somewhere between the 1940s, when it was certainly being widely pursued, and the 1960s, when the term operations management began to come into widespread use.

The definition above is a very modern one: modern in the sense of ”up to date” rather than that of modernist thinking. Two aspects of the definition are significantly different from what might have been seen in a 1970s definition: the inclusion of services and the emphasis upon processes.

The phrase ”products or services” in the definition signals probably the most significant change in the field of OM over its history. As indicated above, management of operations as a field of interest was originally identified and then studied in the context of manufacturing industry. As a consequence, OM originally concentrated on manufacturing management, and was generally described either by the latter label or more frequently by the term production management. As the global economy, especially in the industrialized western countries, has come to place an increasing emphasis on service industries, so the importance of studying the management of their operations has correspondingly increased. There has therefore been a fundamental shift in the scope of the field, from a concentration on manufacturing only, to encompass service industries in addition, and indeed to embrace other sectors such as the delivery of health care, which might not always be seen to fall within the ”service industry” definition.

This shift has also led to concomitant changes, not always universally agreed, in the terminology of the field. As an illustration, the British Production and Inventory Control Society (BPICS) was founded in the 1960s as the result of the establishment of chapters of the American Production and Inventory Control Society (APICS) in Britain. In 1996, BPICS members voted to change the name of the society to the Institute of Operations Management.

The ”manufacturing or service” issue continues to affect the field, particularly in debates as to whether the field should be called production and operations management, or operations and production management, or whether or not operations management includes production management. The assumption here is that operations management includes production management.

The second major shift encapsulated in the earlier definition stems from the use of the phrase ”transformation processes.” OM in the 1960s tended to adopt a functionalist view of the organization. This would be consistent with the pragmatic focus, as most manufacturing companies at that time were structured on the basis of functional hierarchies. Later developments such as total quality management (TQM) and business process reengineering (BPR) fostered a process view of organizations. The principal difference is that the process view looks first at what organizations do rather than how they are structured. This process view has now become part of mainstream thought, not only in OM but also in management more widely, with the processes variously described as business processes, transformation processes, or realization processes, the latter being the term used in the 2001 version of the ISO9000 standard for quality management systems.

Conceptual Frameworks

The pragmatic nature of the OM field gives free rein in terms of both frameworks and methodologies. To quote from the website of the Production and Operations Management Society (POMS), ”the Society’s approach to Production and Operations Management is problem centered; it does not rely on particular methodologies”. Note that the term ”methodologies” as used in the POMS definition appears also to cover theoretical frameworks. As will be seen in this section, there is an interesting tendency for many of the frameworks to have a geographical association. Pilkington and Liston Heyes (1999) considered whether indeed OM was a discipline at all. They concluded that it was, but that there were significant differences between thinking in different parts of the world. Given its origins in manufacturing, it is not surprising that one major strand of thinking in OM has always followed a strongly positivist tendency derived from its roots in industrial engineering and engineering management.

Here the paradigm is that of ”hard” operations research, management science or systems engineering – a single, agreed objective (at worst, multiple agreed objectives), a well defined system, and non controversial implementation. The challenge in any study is therefore to understand the difficulties and then design an appropriate ”solution.”

The pragmatic nature of the field also means that academic OM has found very fertile ground in surveys of practice, generally also from a positivist, hypothesis testing standpoint. Most of the professional societies in OM embrace both academic and practitioner membership, providing academics with useful networks for identifying survey populations and samples.

Independently of the broadening of the scope to embrace service industries, the realization was developing that these approaches were not appropriate for all OM problems. Three of these will be mentioned here: all began during the 1960s, interestingly in different geographical locations – the UK, Scandinavia, and Japan, respectively.

Although it is not now generally associated with an OM label, the OM problems of the petrochemical company ICI were the main stimulus leading to the development by Peter Checkland of his soft systems methodology (Checkland 1999) from the late 1960s onwards. Beginning at about the same time, there came to be a wider appreciation of humanistic, people centered approaches to OM, stemming originally from Scandinavian countries. Here the concerns were again driven by manufacturing, but mainly from the issues of implementation. Swedish companies such as Volvo and Saab were seen as pioneering these approaches -for example in the use of assembly teams rather than a production line specialization approach.

Meanwhile, there was another parallel development, mainly applied in Japan, with an emphasis on participation in the problem identification and solution design activities. This had begun earlier, but came into prominence more gradually. This school of thought was combined with American influences in quality control approaches ( Juran 1964) to lead to the development of TQM, as mentioned above, and also led to other areas of progress such as Toyota’s production system (Swamidass 1991).

Current Emphases

All of the frameworks mentioned above are still alive and well in current OM. Hard, positivist, single objective approaches, softer, phenomenological approaches, and humanistic, participative approaches may all be found. Volvo even continues to feature in teamworking articles after some 40 years (Van Hootegem et al. 2004)!

Both quantitative and qualitative approaches are common in current OM, often even within the same project or case study. Naturally, the positivist approaches lend themselves to quantitative measurements. However, any published work focusing on practical considerations is likely to give explicit consideration to human aspects of implementation. An analysis of a case in terms of ”people, processes, and technology” is a structure commonly found.

Nevertheless, this consideration of ”softer” aspects does not usually go as far as acknowledging the problem as complex in the way that Checkland sees it, let alone further criticisms of ”soft” approaches relating to issues such as power and coercion. Systems approaches in OM, as elsewhere, received a boost from the popularity of the book by Senge (1990) and its advocacy of system dynamics, but many who draw on Senge’s work seem to take a much more positivist approach than those using other systems theories. It remains the case that ”outsider” views of OM often perceive only the quantitative side, for example: ”in general, operations management uses a quantitative or mathematical approach” (Williams et al. 2004: 26).

The pragmatic nature of OM means that there can be very strong emphases on certain areas for a period, which then fade away, either partially or completely. The latter topics can be fairly categorized as ”fads.” Other topics, by contrast, have maintained their importance since OM began, and are likely to continue to do so in the future. Only one example of an article relevant to each area is given here.

At the time of writing, the main ”new” areas that are at their peak are e business (Olson & Boyer 2005) and supply chain management, together with knowledge management, although the latter is generally seen as not specifically an OM concern, and therefore somewhat peripheral to the main literature. Areas possibly just past their peak but still finding their longer term levels include lean manufacturing, agile manufacturing (Guisinger & Ghorashi 2004) and ”just in time” (JIT) approaches. More permanent areas include operations strategy (Aranda 2003), systems design (Johansson & Johansson 2004), quality (Sanchez Rodriguez & Martinez Lorente 2004), logistics (van Hoek 2002), teamworking (Van Hootegem et al. 2004), performance measurement (Melnyk et al. 2004), and project management (Zwikael & Globerson 2004). Naturally these permanent areas have evolved over time and have been influenced by management thought in other areas, for example in the way that performance measurement in OM has been influenced by ”balanced scorecard” approaches.

A further topic which is at present of concern in several different areas within OM is trust. This can take several forms, including: trust between organizations in a supply chain or an alliance; customer trust in online businesses; and trust between team members (Adler 2003).

Methodological Issues and Problems

The appropriate relationship between theory and practice for such a practice driven field continues to be a subject for debate within OM. See, for example, the paper by Slack et al. (2004), Slack being the lead author of one of the foremost UK textbooks on OM. Epistemology, however, is rarely explicitly discussed in the OM literature. A literature search carried out on Web of Science in late 2004, for the phrases ”operations management” and ”epistemology,” yielded no hits at all.

The most preferred approaches for articles currently appearing in journals tend to be either detailed single case studies or large scale surveys. The former show an increasing proportion of interpretive approaches, while the latter continue to be mainly positivist. A significant difficulty is emerging for the latter in the form of ”survey overload.” A recent call for papers for a special issue of the Journal of Operations Management observed: ”Unfortunately, there is considerable anecdotal evidence that practitioner willingness to participate in survey research is declining.” Although this problem is by no 3270 operations management means unique to OM studies, there may be some data sources highly relevant to OM that can be used as alternatives, or for triangulation, for example the increasing number of performance indicators that must be reported publicly, or web based customer rating and self reporting sites.

Partly because of the increase in interpretive approaches, the status of action research is still seen as a current issue in OM (Coughlan & Coghlan 2002), even though Checkland identified the inadequacy of hard systems action research approaches as one of the drivers behind the development of his soft systems methodology. The two main positions are those from the positivist viewpoint who would not see action research as presenting a sufficiently generalizable result, and those who acknowledge that action research has a different epistemology. Coughlan and Coghlan (2002) advocate action research for ”its ability to address the operational realities experienced by practising managers while simultaneously contributing to knowledge,” but there is perhaps a third position apparent in the literature. This accepts the difference in epistemology and the theoretical benefits, but questions whether many real projects labeled as ”action research” actually do contribute to knowledge, as opposed to carrying out what is effectively consultancy for the organization concerned.

Future Directions

The two major current areas identified above (e-business and supply chain management) point the way to future developments, especially when combined with the continuing theme of teamworking, in a world where those teams are increasingly likely to be virtual. More pervasive and more rapid communications change not only working practices, but also the way in which organizations are structured, and perhaps even conceived. The image of the fixed organization with clearly identifiable boundaries may have to give way to one of a fluid coalition formed for a specific purpose and dissolved when that purpose has been achieved. The transformation processes of such an organization are likely to draw in the organization’s customers and suppliers much more closely. If recent developments such as the explosion in use of the Internet and World Wide Web may be characterized as ”e everything,” then the next trend that is already visible can be called ”m everything,” with the m standing for ”mobile.” The cell phone has already revolutionized communication for business people, teenagers, and soccer hooligans alike. Developments such as radio frequency identification (RFID) tags, at present being pioneered by organizations such as Walmart in the US, seem likely to continue these trends further. The likelihood is that there will be increasing convergence between the disciplines (if such they are) of operations management and information systems, as these systems become more and more central to carrying out transformation processes – operations – in all kinds of organizations. Yet as the technology leads to convergence and integration, so the increasing fluidity and virtuality of operations will surely lead to more difficulty in identifying stakeholders and objectives. The tension between ”hard” and ”soft” approaches is thus likely to continue.

References:

  1. Adler, T. R. (2003) Member Trust in Teams: A Synthesized Analysis of Contract Negotiation in Outsourcing IT Work. Journal of Computer Information Systems 44(2): 6-16.
  2. Aranda, D. A. (2003) Service Operations Strategy, Flexibility, and Performance in Engineering Con­sulting Firms. International Journal of Operations and Production Management 23(11/12): 1401-21.
  3. Checkland, P. (1999) Systems Thinking, Systems Practice. Wiley, Chichester.
  4. Coughlan, P. & Coghlan, D. (2002) Action Research for Operations Management. International Journal of Operations and Production Management 22(2):220-40.
  5. Guisinger, A. & Ghorashi, B. (2004) Agile Manufac­turing Practices in the Specialty Chemical Indus­try: An Overview of the Trends and Results of a Specific Case Study. International Journal of Operations and Production Management 24(5/6): 625-35.
  6. Johansson, E.& Johansson,I.(2004) The Information Gap Between Design Engineering and Materials Supply Systems Design. International Journal of Production Research42(17): 3787-801.
  7. Juran, J. (1964)Breakthrough Management. Macmillan, London.
  8. Melnyk, S. A., Stewart, M., & Swink, M. (2004) Metrics and Performance Measurement in Opera­tions Management: Dealing With the Metrics Maze. Journal of Operations Management22(3): 209-17.
  9. Olson, J. R. & Boyer, K. (2005) Internet Ticket­ing in a Not-For-Profit, Service Organization: Building Customer Loyalty. International Journal of Operations and Production Management 25(1): 74-92.
  10. Pilkington, A. & Liston-Heyes, C. (1999) Is Produc­tion and Operations Management a Discipline? A Citation/Co-Citation Study. International Journal of Operations and Production Management 19(1): 7-20.
  11. Sanchez-Rodriguez, C. & Martinez-Lorente, A. R. (2004) Quality Management Practices in the Pur­chasing Function: An Empirical Study. International Journal of Operations and Production Management 24(7): 666-87.
  12. Senge, P. M. (1990) The Fifth Discipline, The Art and Practice of the Learning Organization. Doubleday, New York.
  13. Slack, N., Lewis, M., & Bates, H. (2004) The Two Worlds of Operations Management Research and Practice: Can They Meet, Should They Meet? International Journal of Operations and Production Management 24(3/4): 372-87.
  14. Swamidass, P. M. (1991) Empirical Science: New Frontier in Operations Management Research. Academy of Management Review 16(4): 793-814.
  15. Van Hoek, I. (2002) Using Information Technol­ogy to Leverage Transport and Logistics Service Operations in the Supply Chain: An Empirical Assessment of the Interrelation Between Technol­ogy and Operations Management. International Journal of Technology Management 23(1/3):207-22.
  16. Van Hootegem, G., Huys, R., & Delarue, A. (2004) The Sustainability of Teamwork Under Changing Circumstances. International Journal of Operations and Production Management 24(8): 773-86.
  17. Williams,, Kondra, A. Z., & Vibert, C. (2004) Management. Thomson Nelson, Scarborough, ON, Canada.
  18. Zwikael, O. & Globerson, S. (2004) Evaluating the Quality of Project Planning: A Model and Field Results. International Journal of Production Research 42(8): 1545-56.

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