IBMs Operations Management Areas, 10 Decisions

1. Design of Goods and Services. This strategic decision area of operations management
focuses on how to maintain consistently high quality within target cost limits for the
companys information technology products. For example, IBMs operations managers
look for methods to minimize cost fluctuations. These methods include continuous
monitoring of operations to immediately solve problems. Considering the main strategic
decisions emphasized in this area of operations management at IBM, such methods are
on top of basic considerations for design specifications. For instance, managers
implement design requirements and make the necessary allocations for cost, quality
and resources, while keeping productivity targets. In this way, the value and
technological breakthrough aims in IBMs vision statement and mission statement are
fulfilled along with the satisfaction of operational objectives. Moreover, managers aim to
integrate technological opportunities, such as the ones identified in the PESTEL/PESTLE
analysis of IBM, in the methods implemented in this strategic decision area of operations
management. The goal is to keep operations flexible enough for business growth
opportunities, while adhering to design specifications and operational consistency
requirements.
2. Quality Management. This strategic decision area of operations management has the
objective of satisfying customers demands and expectations regarding IBMs
information technology products. In this case, the companys operations managers
employ regular quality tests to ensure compliance with quality requirements. For
example, IBMs operational standards are partly based on these quality requirements,
while productivity objectives are established with allowance for conducting quality tests.
Effective quality management contributes to competitive advantage to address
competition, which imposes a strong force on the business, as shown in the Porters Five
Forces analysis of IBM.
3. Process and Capacity Design. High process efficiency and adequate production
capacity are the objectives in this strategic decision area of operations management.
IBM fulfills this objective through a continuous improvement model that integrates new
operational standards and requirements in response to changes in the information
technology market. Operations managers use IBMs generic strategy and intensive growth
strategies among the bases for this model. For example, gradual but continuous growth
in productivity is maintained as a result of the model, and to align process and capacity
with the cost leadership generic strategy.
4. Location Strategy. This strategic decision area of operations management aims for
optimal locations in considering suppliers, customers, employees, and other
components of the business, thereby impacting the place or distribution element
in IBMs marketing mix or 4Ps. This operational objective is addressed through strategies
for online and non-online operations. For example, the company applies a traditional
location strategy for non-online operations involving the manufacture, distribution and
sale of its information technology products. On the other hand, for online operations,
IBMs operations managers implement a centralized strategy that involves high-
productivity work hubs or nodes that focus personnel, equipment, and related resources
in a limited number of worldwide locations.
5. Layout Design and Strategy. High efficiency and productivity in the flow of information
and resources are the objectives in this strategic decision area of operations
management. IBM satisfies these objectives through a combination of automation and
the use of standards and best practices in the information technology industry. For
example, the companys operations managers utilize industry best practices in layout
design for manufacturing. On the other hand, IBM has operational standards for
automating information flow throughout the organization, such as standards for real-time
information on server usage and related statistics.
6. Job Design and Human Resources. The strategic decision in this area of operations
management focuses on maintaining an effective workforce for the information
technology business. IBMs organizational structure influences operational approaches
used for this area. For example, human resource development programs are aligned
with the specific functional requirements in the different segments or divisions of the
organization. Also, IBMs organizational culture determines operations managers
productivity methods, as well as the various approaches used in improving human
resource capabilities, considering the need to maintain cultural support for innovation.
7. Supply Chain Management. Operations managers aim to keep high supply chain
efficiencies and capacities in this strategic decision area. In this regard, IBMs approach
to operations management involves using information technologies to automate supply
chain processes for high efficiency that supports the business strength of high
economies of scale (Read: SWOT Analysis of IBM). On the other hand, the company
satisfies capacity goals through programs that support suppliers productivity growth.
For example, these programs provide information and some technical support to help
suppliers improve their operational capacities. This approach aligns with efforts to
address the interests of suppliers as stakeholders in IBMs corporate social responsibility
strategy.
8. Inventory Management. In this area of operations management, the strategic decision
deals with maintaining adequate inventory while considering internal and external
factors. For example, IBM must ensure adequate inventory despite challenges linked to
vulnerabilities and risks facing firms in the information technology industry. The
company has redundancy allowances and buffer inventory to address such operational
issues and to account for fluctuations in market demand. Also, IBMs operations
managers achieve productivity objectives through inventory control based on real-time
data on business processes and market needs and variations.
9. Scheduling. Appropriate schedules for processes and resources are IBMs objective in
this strategic decision area of operations management. The companys scheduling
approach is based on the type of operations, operational productivity requirements, and
location of operations, among other variables. For example, IBMs schedules for
semiconductor development are different from the schedules for server maintenance
and upgrades. In addition, operations managers at IBM use different sets of schedules
based on geographic location to account for differences in the dynamics and business
practices across markets and regions of the world.
10. Maintenance. This strategic decision area of operations management has the
objective of maintaining adequate resources and processes to support the information
technology business. For example, IBM maintains high productivity levels in its
technology laboratories through regular checks and upgrades of relevant equipment.
Such efforts ensure the adequacy of operational processes in the organization. In
addition, operations managers implement a variety of programs to maintain the stability
and growth of IBMs resources, inclusive of human resources, as well as materials and
equipment for corporate function and production processes.