Download - Operation Management
2011
Tameem M AlZoubi Assignment Reference OpM/July11-1
Student No. 7995650
8/15/2011
Operation Management
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Assignments Reference: Assignment Reference OpM/July11-1
Student Name : Tameem M. AlZoubi Student No. : 7995650
OPERATIONS MANAGEMENT
Table of Contents
1. INTRODUCTION.............................................................................................................. 3
1.1 Company Profile........................................................................................................... 3
2. STRATEGY ...................................................................................................................... 3
3. HAYES AND WHEELWRIGHT MODEL ..................................................................... 4
3.1 Aims and objectives of H&W model ............................................................................. 4
3.2 Hayes & Wheelwright (1984) Four-Stage Model Operations ......................................... 4
4. DTP AND H&W FOUR-STAGE MODEL..................................................................... 5
4.1 Stage 1 Internal Neutrality ............................................................................................ 5
4.2 Stage 2 External Neutrality ........................................................................................... 6
4.3 Stage 3 Internally Supportive ....................................................................................... 6
4.4 Stage 4 Externally Supportive ...................................................................................... 7
5. CONCLUSION ................................................................................................................. 8
BIBLIOGRAPHY ...................................................................................................................... 8
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Assignments Reference: Assignment Reference OpM/July11-1
Student Name : Tameem M. AlZoubi Student No. : 7995650
OPERATIONS MANAGEMENT
1. INTRODUCTION Now a day‟s competitive business environment has made a number of strategic operational
imperatives obvious for some important reasons, which companies are focusing on:
New and better services are necessary for competitive advantage.
Most innovation has to take place under conditions of frugality and resource constraints
Given the growing importance of service across all economies and for global business in general, it is
increasingly important for managers in many industries to base their strategic and operational
decisions and actions on service innovations that allow for firm resources, practices and capabilities
to be meaningfully leveraged. The practice of innovating in services in such a way as to create
strategic and operational value is thus of paramount importance.1
This paper examines The Hayes and Wheelwright model on Dubai Technology Partners company,
classifying its operation function and at what stage currently it placed.
1.1 Company Profile
Dubai Technology Partners LLC Aviation services (DTP) addressed major difficulty facing the
service delivery and the innovation along with other departments as Marketing Projects and Business
Development. Most of projects go beyond their due date, or exceed their budget and some may not
match the customer‟s requirements. Management had to respond and analyse the problem, the
problem was in the lack of operation management actions.
DTP supply Airport IT services, design solution and implement high sophistically traffic and resource
planning and management systems for airports, airlines and handling agents. Some of those systems:
Airport Operational Database-AODB-
Resource Management System-RMS-
Flight Information‟s Management System-FIMS-
Human Resource Management System-HRMS-
Flight Information Display System-FIDS-
Multiple Airport and Central Operations
Service Integration and Workflow Management
Business Intelligence Solutions
As it‟s seen those the heart of an airport system which are involved in airport operation
management. As from the above, it is a B2B relation. DTP had to act fast to insure of services and
product during projects are deliver and meet the customer requirements.
2. STRATEGY
Strategy denotes actions or patterns of actions intended for the attainment of goals. In an
organizational setting, the term strategy covers more than just intended or planned strategy, it also
includes the “sequence of decisions” that exhibit a “posterior consistencies in decisional behaviour”
(Mintzberg 197,p.935).
Level of strategy, If one accepts a top-down hierarchical approach to strategy, there are three main
levels of strategy: corporate, business and functional. Under this model, the corporate goals are
handed down to the business and then to functional areas. The concern will be on the third level, the
third level of strategy is where the business functions, operations or finance or marketing, formulate
their long-term plans which support the aims being pursued by the business strategy. A great quote
often but perhaps inaccurately attributed to Sun Tzu in The Art of War: “Strategy without tactics is the
1 Special Issue of Operations Management Research- Springer, April 2011
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Student Name : Tameem M. AlZoubi Student No. : 7995650
long road to victory; tactics without strategy is the noise before defeat.” This quote highlights the
importance of integrating strategy and operations, a central theme in our strategy execution system2.
Different business objectives would probably require different operations strategies in that they would
demand a different set of priorities. Under the top-down model, the role of the operations function is to
implement business strategy formulated elsewhere
Corporate goals
Business Unit Level
Functional Areas
Figure 1
3. HAYES AND WHEELWRIGHT MODEL
The phenomenon of business strategy is only beginning to be understood. In the evolution of
business strategy theory, some variables, components, and determinants of business strategy have
been identified by operations management theories, such Hayes and Wheelwright (1984) Model.
However, certain factors of critical importance to business strategy have not received sufficient
attention in operations management area.
The Hayes and Wheelwright 4-Stage model classifies organizations according to the strategic role
played by their operations function. It has achieved classic status in the operations management
literature but it seems little tested in practice. Analysis of the responses to date indicates that
managers seem to have difficulty in classifying the strategic role played by their operations in an
internally consistent and coherent manner. This model may also extent to the validity of other context.
3.1 Aims and objectives of H&W model
Operationalize the Hayes and Wheelwright 4-Stage model and test its utility across a
organizations to defined the level of its operation function participations as well the applicability of the
H-W model in a variety of organizational make managers draw their business strategy with success.
Hayes and wheelwright provide an efficient way to classify the operations function of an organization,
and way to modify and drive the organization strategy.
3.2 Hayes & Wheelwright (1984) Four-Stage Model Operations
DTP understand that the Operations management is the area of management concerned with
overseeing, designing, and redesigning business operations in the production of DTP services. Based
on this understanding, internal analysis using some basis of an analysis tool which is used to calibrate
2 The Execution Premium: Linking Strategy to Operations for Competitive Advantage, Q&A with HBS professor Robert S. Kaplan,
by Martha Lagac
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Student Name : Tameem M. AlZoubi Student No. : 7995650
to identify the level of DTP operation function fall on the 1-4 scales. (see Figure 2)
Figure 2
4. DTP AND H&W FOUR-STAGE MODEL
The Analyses and studies within DTP departments and functions showed internal corporation
problems within project management process, technology process, capacity process, resource
management process, In addition to weakness of operation management. The analyses done based
on3:
The way of operations related with external customers as well internal.
The degree of understanding and knowledge of operations practices.
The way it links operations resources with strategy
The degree on innovation.
Reviewing the H&W model and based on DTP business strategy and operations management can
define each stage as the following:
4.1 Stage 1 Internal Neutrality
In this stage, H&W defined the operations function is at the poorest level. “Companies consider
their manufacturing organization to be internally neutral, in that its role is simply to "make the
stuff", without any surprises. Such companies believe that their product designs are so
unusual or their marketing organization so powerful that if the product can simply be
delivered to customers , as advertised, the company will be successful” Applying this definition
on DTP, its clearly defined the operation function within DTP, the operation is considered a
„necessary evil‟. The other functions, if they have any things to say at all about operations,
regard it as holding them back from competing (See Figure 3). DTP operation function is at a
minimum standard, it is seen as hindrance in the delivery of competitive advantage by the other
business functions such as project department dealing with the client with promises, IT
development function design and solutions out of the required, as well the useful usage of
resources. The bad publicity that comes from DTP being let down by their operations can be
damaging in future business and projects if not been handle with care to carry the company to
the next stage.
3 Operations and Process Management 2
nd edition (2009) Practice note-The Hayes and wheelwright 4 stage model, (1984)
Stage 1 – Internally Neutral o Holds Organization back
Stage 2 – Externally Neutral o As good competitors
Stage 3 – Internally Supportive o Best in Industry
Stage 4 – Externally Supportive o World Class
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Figure 3
4.2 Stage 2 External Neutrality
The first of breaking out of stage 1 is for the operations function to begin comparing itself with
similar companies or competitor organizations in the outside market. By taking the best ideas
and norms of performance from the rest of its industry, it is trying to be 'externally neutral'. For
this stage, DTP should work on some changes and implementing strategy by giving more
power to operations management to involve in the responsibility of ensuring that business
operations are efficient in terms of using as little resources as needed, (See Figure 4)
and effective in terms of meeting customer requirements and time management during
projects. It will benchmarking its performance against its competitors and identifies the best
ideas and practises.
Figure 4
4.3 Stage 3 Internally Supportive
At this stage, the operation function will reach the 'first division' in their market, may not be
better than competitors on every aspect of performance (five performance objectives that apply
to operations Quality Flexibility, speed, Dependability and cost as to Slack, Chamber and
Johnston(2004)), but broadly up with the best. DTP management have to drive the business
strategy keeping in mind that operations management is important as its responsible for
managing most of the organization resources, no matter how grand the DTP business strategy
plan, it can only become meaningful reality, in practice, if it is operationally enacted. (Figure 5)
DTP‟s operations are strategically important precisely because most organizational activity
comprises the day-to-day activities within the operations function (Marketing, Projects, IT,
Currently, DTP operation Function stands at this stage
DTP started apply some new strategy plans to improve the operation
function to step up to the next stage
Plan to move here
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Assignments Reference: Assignment Reference OpM/July11-1
Student Name : Tameem M. AlZoubi Student No. : 7995650
Technology, delivery ...). It is the myriad of daily actions of operations, when considered in
their totality that constitute the organization‟s long-term strategic direction. The relationship
between an organization‟s strategy and its operations is a key determinant of its ability to
achieve long-term success or even survival. Organizational success is only likely to result if
short-term operations activities are consistent with long-term strategic intentions and contribute
to competitive advantage (Figure 5), that will lead to stage 4.
Figure 5
4.4 Stage 4 Externally Supportive
At this level the operations function is playing a lead role in strategy making and is forming the
foundation for future competitive success. It might be doing so by organizing resources in
innovative ways or in designing in flexibility so it is capable of adapting as markets change. At
stage 4 a long-term perspective is taken and capabilities developed that will enable the
organization to compete in future market conditions. It is about redefining the market and its
expectations. Operations go further in attempting to capture the emerging sense of the growing
importance of the operations management. (Figure 6) A stage 4 company is one that sees the
operations functions as providing and important foundation for future competitive success.
Operations develop operations-based strategies that provide the company with the
performance, which will be required to compete in the future market conditions. In effect the
operations function is becoming central to strategy making.
Figure 6
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Student Name : Tameem M. AlZoubi Student No. : 7995650
5. CONCLUSION
Hayes and Wheelwright's four-stage model (1984), describing the possible strategic roles
played by an organisation's manufacturing function has attained classic status (Sower, 1997).
With Chase and Hayes's (1991) subsequent adaptation for service operations, the model has
achieved widespread acceptance, becoming ubiquitous in the operations management
curriculum. It has an attractive simplicity and high face validity.
Dubai Technology Partners as a services company have not successfully achieve the idea of a
central, proactive, inventive and performance-driven operations function described by H&W
“World Class Operations”. And that need interactive management to drive the strategy on the
company to have an effective operation function.
BIBLIOGRAPHY
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Barnes, D., Rowbotham, F., & Zvesper, A. (2001). The Utility of the Hayes and Wheelwright
Four Stage Model in a UK Context.
Blackmon, D. K. (2010). Technology & Operations Management:Operations Strategy.
Frank E. Rowbotham, D. B. (n.d.). Journal of Manufacturing Technology Management. A
questionnaire operationalising Hayes and Wheelwright’s four-stage concept, Volume
15 · Number 7 · 2004 · pp. 651–661.
Newell, P. M. (1987, 4). Management Science pp. 509-524. Retrieved from
http://www.jstor.org/stable/2631870 .
Porter, P. M. (2001). Service Operation Strategy. Ch2.
Robert H. Hayes, S. C. (Ed.). (n.d.). Google Bookks. Retrieved from
http://books.google.com/books?hl=en&lr=&id=pa2MllRmUsQC&oi=fnd&pg=PA1&
dq=%22Restoring+our+competitive+edge%22&ots=IwPelLKvCU&sig=wbzQxAjdi
WPn7fDCbvFedd2-TZA#v=onepage&q&f=false
Slack, N., Chambers, S., Betts, A., & Johnston, R. (2009). OPERATIONS AND PROCESS
MANAGEMENT (Vol. SECOND EDITION). PEARSON EDUCATION.