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Operations Management Practices

The rate of growth in use of automation in the United States depends on factors both in the larger economy and at the level of individual firms and products. Some of the more general factors include availability of capital and skilled labor, international competition, and the amount of attention American firms devote to improvements in manufacturing processes. The last factor may be the most critical. Manufacturing engineering in the United States has been largely neglected both in engineering schools and in industry.

Prompted in part by international competition, however, the mood among American industrialists seems to be changing. Increasingly, established operations management practices are being questioned in conferences and industry journals, and many industrial operations managers are closely examining improvements in manufacturing processes, particularly robots. The extent to which this change in mood will effect lasting and significant change in operations management practices, however, is uncertain.

Many management specialists believe that such lasting change must include discarding powerfully entrenched habits in industry, particularly financially-oriented management strategies that discourage risk-taking and downplay quality relative to cost. One of the inherent difficulties with production and operations management, operations research, and program management and control is that nothing ever remains the same – everything seems to be changing on a continuing basis.

This phenomenon has been thoroughly addressed in a wide variety of literature, but the most meaningful approach for the current topic of concern is a function of automation. This work examines how automation will affect operations management practices over the next decade. There is certainly nothing new in the replacement of human workers by machines where machines can do repetitive jobs more quickly, accurately, and cheaply than humans. The strategic advantage of automation can be seen, then, in its effects on cost, quality, and speed of response to customers.

However, the cost of the investment in expensive new equipment has always been a deterrent to automating. Now, though, it seems that exploding technological advances have created a new surge in automation. In some modern Japanese automobile plants, for instance, the traditional sight of workers along an assembly line has been replaced by the sight of workers at their computers guiding the robots on the assembly line. Besides the strategic advantages mentioned above, such plants benefit workers through better safety and decreased physical demands.

Concern over the interrelated elements of technology, change, and risk is hardly a new topic in the arenas of production and operations management, operations research, and program management and control. To unravel how automation will relate to operations management practices, we must begin by assessing how firms’ business objectives influence their choice and subsequent use of technology. To make this assessment, we borrow a simplified summary of organizational choices and their consequences from the work of Barlett C. and Ghoshal S. (1992).

Intensifying competition, the shortening of product life cycles, and the increasing segmentation of markets have all heightened the pressures on firms both to lower costs and to increase the speed and accuracy with which they respond to changing market conditions and opportunities. Rather than produce a single response, however, these forces induce firms to reassess their competitive strategies and to choose whether to compete on the basis of lower costs and higher volumes for mass, standardized markets, or to search for single- and multiple markets in which they can stress product quality, speed to market, or technological superiority.

While, in reality, firms may put some emphasis on both responses, the relative emphasis given to low cost versus differentiation strategies will have important consequences both for how automation is developed and utilized and how operations management will be conducted. A stream of research on automation is based upon a fundamental critique of the technologically-oriented approach of the development of manufacturing systems.

Reforms to shop floor industrial relations practices may be important to the effective use of existing technologies, but their longevity and their potential contribution to broader organizational objectives are very much tied to upstream decisions about new products and new process technologies. As Summers (1998) and others (Kochan, Katz, and McKersie 1987) have argued, long-term support for innovations at the workplace level will require earlier and broader consultation on strategic decision-making around such issues as the selection and implementation of new production technologies.

However, one should not expect planning and decision-making in all levels and functions to reflect automatically or immediately reforms in human resource and industrial relations philosophy. Despite the higher level of experimentation in work practices and the institutionalization of some industrial relations reforms, most organizations are and will remain complex assemblages of contending interests and visions that are extraordinarily difficult to infuse with a single operational philosophy.