10 Jan 2008  Sharpening Your Skills

Operations Management

Sharpening Your Skills dives into the HBS Working Knowledge archives to bring together articles on ways to improve your business skills.

Questions to be answered:

  • Can "lean" productions methods improve service industries?
  • How can a company's order management cycle impact costs and margins?
  • How does resource allocation lead to strategy failures?
  • Can operations become a competitive advantage?

Can "lean" productions methods improve service industries?

Bringing 'Lean' Principles to Service Industries
Toyota and other top manufacturing companies have embraced, improved, and profited by lean production methods. But the payoffs have not been nearly as dramatic for service industries applying lean principles. HBS professor David Upton and doctoral student Bradley Staats look at the experience of Indian software services provider Wipro for answers.

Key concepts include:

  • In terms of operations and improvements, the service industries in general are a long way behind manufacturing.
  • Not all lean manufacturing ideas translate from factory floor to office cubicle.
  • A lean operating system alters the way a company learns through changes in problem solving, coordination through connections, and pathways and standardization.
  • Successful lean operations at Wipro involved a small rollout, reducing hierarchies, continuous improvement, sharing mistakes, and specialized tools.

How can a company's order management cycle impact costs and margins?

How an Order Views Your Company
HBS professors Benson Shapiro and Kash Rangan bring us up to date on their pioneering research that helped ignite today's intense focus on the customer. The key? Know your order cycle management.

Key concepts include:

  • The order cycle provides a window through which to observe the intricate details of revenue management, cross-functional coordination, and profitability management.
  • Current product-tracking technology makes problem diagnosis much easier than the time of the original study.
  • By and large, companies using this methodology see lowered costs and improved gross margins.

How does resource allocation lead to strategy failures?

What Really Drives Your Strategy?
Why do so many companies veer off their strategic plan? Look for a disconnect between corporate strategy and how resources are allocated, say Harvard Business School's Joseph L. Bower and Clark G. Gilbert.

Key concepts include:

  • Company strategy is more than the statement presented in company documents; it's the actual aggregation of commitments and their relationship to the realized strategy of the firm.
  • Operating level decisions can change the de facto strategy of the firm.
  • Strategic resource allocation involves planning from the bottom up and involves all levels of the organization.

How can operations become a competitive advantage?

Operations and the Competitive Edge
Many managers expect operations organizations to fulfill only a support role. But an effective operations strategy can give you a competitive advantage. An interview with professor Robert Hayes.

Key concepts include:

  • Managers must rethink many of the basic principles of good operations management that worked in the past.
  • Companies must adopt a strategy for improvement that fits the specific needs of the organization at that point in its life.
  • Assigning a team to carry out a job may not always be the best idea. Sometimes it's more effective to let a gifted individual do the task.