A REPORT ON RECRUITING A NEW OPERATIONS MANAGER
FOR A MANUFACTURING COMPANY
The Need to See the Big Picture
There are several roles for the operations manager (OM). Generally, OM is the head of the operations department which in turn administer the transformational process (e.g. converting inputs to outputs). Therefore, OM should be knowledgeable and experienced in determining the creation of value for the activities comprising the transformational process. Otherwise, the manufacturing firm will lead to inefficiency and ultimately inability to produce value-added outputs. Since operations management deals with people, technology and deadlines, a qualified OM should have good technical, conceptual and behavioral skills ( & , 2003).
More than anyone in the company, the operations department intensively interacts with other departments ( & , 2003). For example, marketing information can be derived through operations department about product availability, lead-time estimates and delivery schedules. Without such data, marketing and even sales people cannot do their jobs in a satisfactory way that can cause loss of customers and revenues. As a result, operations leader should have ample theoretical background in order for the department to have tools necessary for efficient collaboration. The lack of knowledge of OM to use alternative courses of actions for departmental interaction can lead to devastating effect on the firm.
Further, human resources department coordinate their plans to operations department on employee recruitment, training and other motivational programs. This is crucial because the number of required workers, complexity of work and job satisfaction can serve as negative symptoms in which human resources department can interfere. In the early years of Ford Manufacturing Company (e.g. when its founder, Henry, is still the president), its operation engineers introduce the conveyor belts and “man high” line wherein simple worker movements was not allowed because timing was very crucial (, 2006). Although it improved efficiency, employee turnover was high due to very formal and machine-like working environment.
To complete the integrated role of OM against corporate departments, finance people relies on the level of productivity, cost cutting strategies and new product developments in building corporate budgets. Without the operational information, most of the capital outlay which are operational in nature (e.g. establishing a new manufacturing factory) will not be accurate and financial health and growth would not be attained to the detriment of investment opportunities of the organization. Since the OM holds the technical core or “hub” of the organization, ineffective communication with the finance department could obliterate the chance of securing important funding ( & , 2003).
As observed, the responsibility of OM goes beyond his own department. This is why there are several supporting supervisors under an OM to achieve the demand for an integrative outlook. In the case of Eveready, its OM manages the entire production process at the Maryville alkaline plant but has a total of thirteen (13) supervisors and more than five-hundred (500) production workers ( & , 2003). This example implies that OM has a large opportunity to coordinate on a corporate-level and it is given. However, it is expected that the new OM would be respectable enough for the integration to happen. Thus, technical expertise, experience, educational background, employment record especially supervision and behavioral assessment of former colleagues are necessary.
OM should be able to create, implement, monitor and evaluate an effective operations strategy. This is not an easy task considering that corporate strategies are intertwined with operational strategy or simply the latter is the day-to-day execution of the former into detailed actions (, & , 2003). In the case of Honda, a high-tech humanoid called Asimo embodies the operational and corporate strategy of the company (Internet, 2007). The pioneering and sophisticated attributes of ASIMO relates Honda’s capability to provide its environmental and safe products/ services. The promises have relative ease of acceptance for customers to use such branding into their purchase decisions because Honda has already established itself of developing new and human-friendly technology.
The experience of Honda relates a successful operations strategy to value-added regard on the brand name as Asimo is also used in advertising. OM has succeeded in integrating corporate identity in the operations level (e.g. on how to develop technology and update it). Further, while thinking of efficiency measures, developing a buyable product is far more important. In effect, current offerings should be evaluated while prospect for installing technology as support to efficiency measures should be think about. Therefore, additional criteria that is within the project management skills, forecasting and scheduling would be very useful requirements.
Managing and Ensuring the Supply Chain’s Quality: Common Problems
Manufacturing’s major cost is triggered by materials that are used to build the products which can include spare parts, machineries and tools. Suppliers account for 80% of product content and manufacturing companies will be better-off if outsourcing is used extensively ( & , 2003). In addition, as quality dictates the level of activities that operations department would execute (e.g. low quality for simple activities and associations of these activities while high quality or high customization relates to a more complex set of activities), one wrong move in the supply chain would lead to “shocks” in all aspects of the operations and will adversely affect other departments as well.
Loose of competitive differentiation. For a firm, product/ service differentiation is crucial in intensifying its revenue-generating capabilities. This is because differentiation strategy seeks to be different from the firm’s competitors on as many product/ service feature as possible (, 1980). In this manner, the focal point of the strategy, which is to provide goods/ services that are perceived by customers in different ways that are important to them, can be attained. However, commissioning external suppliers would result to competitors having the same inputs (from raw material suppliers), having the same machines (from production suppliers), having the same technology (from software-providers) and even having the same strategy (from consultants). If not identified by firms before formally running the value chain, customers might see personal value, however, not on a single firm, but on almost all the industry players. Thus, their bargaining power and choices increase to the detriment of differentiation strategy ( & , 2001).
In the past, Bavarian Motor Works or more popularly known as BMW tried to emphasize cost leadership strategy rather than differentiation to reduce designing costs and increase productivity leading to higher revenues (, & , 2003). This made the management buy a technology that transformed the formerly manual crash-testing into machine-operated procedure. Although efficiency is enhanced, the differentiation of such technique (a previously unique internal process of BMW) from the auto-industry was easily copied by its competitors through contracting with identical vendors which literally devalue BMW’s design. The error was later identified in undermining a complex intangible resource (the interactions among design engineers of BMW) in the purchase decision. The pursuit of automation, subsequently the purchase, omitted such occurrence.
Since a firm does not have limitless competencies and even some competitive advantages are short-lived (, 1993), differentiation is a process that involves product customization that undermines economies of scale particularly in production. In doing so, it can be able to extend the life of its competitive advantage or survive competition from a niche of selected customers who value their produced. However, when revenues rather growth is emphasized, mass production will take-over the corporate approach which goes for efficiency with a large customer base waiting to buy a low-priced produced. Henry Ford manufacturing is an example (, 2001). Since value-creation is non-existent within the approach, the firm would tend to externalize the value chain that can lead to more cost-efficiencies due to downsizing, down scoping and short-lived supplier contracts. Eventually, creating core competency, internal improvement and building a learning curve will be overtaken by outsourced entities (outsourced technology, purchased trademark/ patent, shared plant, etc.)
In the contrary, the example of BMW shows that the value that can derive from cost leadership strategy is minimal, non-growth, unshielded to leakage/ imitation and machine-oriented. Unfortunately, external purchase and outsourcing coincides with cost leadership. When a firm buys an organizational asset/ knowledge from a supplier, the change is very drastic. In addition, departmental adjustments (technical, relational and behavioral levels) would likely be minimal except possibly in the technical side. This is contrary to internalization (a firm internally produces the asset/ knowledge) where organizational members (possibly the entire stakeholders) are involved in the product/ process development that makes the change periodic and adjustments longer. In this view, outsourcing strategy makes a firm and its units an outsider of the new potential value-creating asset. In effect, the former differentiation of their produced from competition is unable to be implemented not only because competitors have resorted to the same supplier but also the new technology/ asset/ knowledge might not conform with the current corporate culture, structure, controls and strategy.
Loose of competitive advantage. Of course, a firm or specifically BMW will not be able to differentiate itself from competition without competitive advantage in this case the unique relationship of its design engineers. And so, competitive advantage is the basket of value-creating possibilities for a firm where differentiation, cost leadership, the combination of two, and other corporate and international strategies are derivable. The importance of having a competitive advantage evolves within a rationale that a strategy encompassing it and the resulting benefits would be found by competitors hard to duplicate or costly to imitate (, 2001). This gives rise to sustainability of a strategy and future benefits. This is also the reason why trademarks and patents are being paid and secured by their founders/ developers making these legal entities. In the contrary, purchasing some value chain activities from external suppliers may as well attain their legal right against imitation and unauthorized use for the corporate clients but with sub-optimal results.
On the verge in the popularity of offshore labor outsourcing in the shoe industry, New Balance deviated from the beliefs of some biggest names that follow the trend like and (, 2003). This is despite low cost structures (cheap labor) and comparative advantages are present in foreign countries like China. However, resisting the cost-effective promises of outsourcing offshore made New Balance to retain its competitive advantage in design and quality control including location advantages to high-end markets. In doing so, while producing shoes is still cheaper for offshore outsourcing (.30 compared to New Balance United States operation of .00), New Balance domestic manufacturing is more efficient (24 minutes per shoe compared to three hours per shoe in offshore outsourcing). The firm succeeded as it focused in upgrading low-skill jobs in the line.
Again, it is obvious how sustainable and growing firms undermine revenues (through external purchase) in favor of retaining competitive advantage. In doing so, they maintain their independence as well as total control of their destiny. In an opposite view, revenue-maximizing but non-growth firms would not bother to scan its internal and external environment in favor of one-time resource acquisition. In addition, the outsourcing attitude would also separate them to the idea in investing in research and development. In effect, the rationale behind competitive advantage (hard to duplicate and costly to imitate) would be short-lived as a firm exposes it to competitors. The latter can simply buy the offshore product/ service or pirate the former suppliers into a closed deal. This is why New Balance came out to be more efficient and more in-control of quality because it internalized its competitive advantage and further improved its effectiveness.
Conclusion
As observed, textbook-suggested strategies and even real-manufacturing experiences does not prove an effective and efficient OM. There is a tendency to becomes overly short-sighted (e.g. focus on short-term) or overly far-fetched (e.g. focus on long term). In this regard, the new OM must have qualifications that can be used by the Board in assessing the depth of every candidate’s understanding about such tendency. This can be observed through a series of interviews, giving actual operational challenges and written examinations. It is far more important than any recommendation attesting the level of expertise of a candidate, however, to match the level of understanding against manufacturing company’s corporate values/ strategies/ working conditions. This is because operational department is where the action is, therefore, the new OM should be able to adjust in the general conditions on a daily basis.
Books
Journals
Electronic Sources
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