Facebook Inc.

Operations Management:
10 Decisions, Productivity
UPDATED JUL 2, 2016 ANDREW THOMPSON

Chief Mass
Communication Specialist Palmer Pinckney updates the official U.S. 7th Fleet
Facebook page in 2009. Facebook Inc.s operations management satisfies the
10 strategic decision areas for maximum productivity of the social media
company. (Photo: Public Domain)
Facebook Inc.s success as the biggest online social media business is based on
effectively addressing the 10 strategic decision areas of operations management
(OM). Each of these areas addresses operational concerns to maximize productivity
and overall efficiency of the organization. Facebooks human resources and facilities
are developed to ensure that operations management is always effective in achieving
the strategic objectives for these 10 decisions. With a growing number of users, the
company must support its social networking website and mobile apps with best
practices in operations management. Through continuous improvement, Facebook can
ensure that it meets its objectives for the 10 strategic decision areas of operations
management.

Operations management (OM) at Facebook Inc. is developed and maintained based

on the companys strategies and objectives for efficiency and continuous improvement
in all business areas. Facebook satisfies the 10 strategic decisions for maximum
productivity of its social media operations.
Facebook Inc.s Operations Management, 10 Decision
Areas
1. Design of Goods and Services. Part of Facebooks design strategy is to
continuously innovate its products. In this decision area, the objective is to achieve a
product design that aligns with business goals through operations management
streamlining. In the case of Facebook Inc., continuous innovation of the social media
network and mobile apps, along with new product development, is seen as a strategic
approach to ensure the companys competitiveness in the long term.
2. Quality Management. Operations management focuses on meeting customers
quality requirements in this strategic decision area. Facebook does so through suitable
human resource policies. For example, the company uses small teams to rapidly
innovate and continually improve the quality of the social networking website and
related services. In addition, Facebook Inc. collects feedback from users to address
issues based on user experience.
3. Process and Capacity Design. Considering its online nature, Facebook Inc.
addresses this strategic decision area through automation. Operations managers are
concerned about the processes and resources needed for adequate production of social
media services for users and advertisers. In Facebooks operations management,
online technologies are used, alongside an innovative approach to human resource
management. For example, iteration of product improvement and innovation is
supported through online technologies that facilitate efficient dissemination of data
among work teams in Facebooks facilities.
4. Location Strategy. The operations management objective in this strategic decision
area is to optimize nearness to resources and markets. In the case of Facebook Inc.,
nearness to markets is not an issue because the companys social media services are
accessible around the world through the Internet. However, the firm is concerned
about nearness to resources. Facebooks approach is to keep its operations near the
best talent pools. For example, the companys headquarters are located in Silicon
Valley, which provides access to the areas high quality talent suitable for computing
technology businesses. Also, Facebook maintains most of its overseas offices in urban
centers for ease of access to the labor market.
5. Layout Design and Strategy. The efficiency of internal communication and
movement of human resources and materials is the strategic objective in this decision
area of operations management. Facebook addresses this objective through innovative
layouts of its offices. For example, the company integrates open spaces to encourage
brainstorming and creative interactions. Such interactions are essential in supporting
Facebooks product development processes to improve the social media business. On
the other hand, for facilities that house web servers, Facebooks operations managers
use industry standard layouts to maximize capacity and utilization.
6. Job Design and Human Resources. Facebook Inc.s operations management is
concerned with developing human resources in this strategic decision area.
Facebooks aim is to maintain an adequate and capable workforce for the online social
media business. For example, the company uses a continuous recruitment
strategy. Facebooks corporate social responsibility strategy addresses this concern
through a Ph.D. program that allows students to work at the companys offices. This
program also allows the company to access high quality talent and future hires.
7. Supply Chain Management. The bulk of Facebooks operations management
concern in this strategic decision area focuses on corporate facilities. Most of these
facilities are located where supplies are accessible. For example, many of Facebook
Inc.s data centers are located in or near Silicon Valley to optimize access to
equipment supply and the labor market. In addition, Facebook develops and maintains
its data centers, instead of purchasing customized equipment from vendors. This
approach supports the competence of the companys social networking website and
related social media services.
8. Inventory Management. The objective in this strategic decision area is to optimize
inventory purchasing and holding. Facebook Inc.s approach for this area is just-in-
time inventory, which involves same-day purchasing and installation of supplies,
especially equipment used for the data centers. Facebook designs its data centers and
outsources the manufacturing of equipment.
9. Scheduling. Facebook focuses on continuous iteration to address this strategic
decision of operations management. This areas objective is to ensure that
intermediate and short-term schedules satisfy business needs. In Facebooks case,
scheduling for data centers is regular, while scheduling for offices is flexible. For
example, at data centers, equipment arrives and is installed on a daily basis. At
offices, Facebook Inc. uses flexible schedules to enable and empower work teams to
creatively discuss and solve problems. Such flexibility supports the continuous
improvement of Facebook Inc.s social networking website, mobile apps, and
advertising services.
10. Maintenance. Facebook Inc. operations managers use a variety of approaches for
adequacy of business processes. Such adequacy is the operations management
objective in this strategic decision area. For example, Facebook has a data center
located in Sweden to take advantage of the countrys cold climate in minimizing
maintenance costs for equipment temperature control. Facebook Inc. also has
dedicated IT teams for iterating and producing new versions of Facebooks social
media website and mobile apps.

Productivity at Facebook Inc.

Facebooks productivity depends on the effective application of operations
management principles. The company uses a wide variety of criteria or measures to
determine actual productivity in supporting its social media business. The following
are some of the criteria Facebook Inc. uses for this purpose:

1. Number of servers per day (Data center productivity)

2. Issues solved per day (Work team productivity)
3. Number of messages processed per day (Customer service productivity)

References
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Schrunder, C. P., Galletly, J. E., & Bicheno, J. R. (1994). A fuzzy,
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Bloomberg.
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