operation management

2011

Tameem M AlZoubi Assignment Reference OpM/July11-1

Student No. 7995650

8/15/2011

Operation Management

2 | P a g e

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

3 | P a g e



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

4 | P a g e



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

http://en.wikipedia.org/wiki/Management

http://en.wikipedia.org/wiki/Business_operations

5 | P a g e



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

6 | P a g e



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

http://en.wikipedia.org/wiki/Efficiency

http://en.wikipedia.org/wiki/Effective

7 | P a g e



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

8 | P a g e



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

(n.d.). Retrieved from wiki.answers.com:

http://wiki.answers.com/Q/Evaluate_the_success_of_operations_objectives_in_meeti

ng

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.

operation management

Documents