IBM’s 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
company’s information technology products. For example, IBM’s 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 IBM’s 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
2. Quality Management. This strategic decision area of operations management has the
objective of satisfying customers’ demands and expectations regarding IBM’s
information technology products. In this case, the company’s operations managers
employ regular quality tests to ensure compliance with quality requirements. For
example, IBM’s 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 Porter’s 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 IBM’s 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 IBM’s 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,
IBM’s operations managers implement a centralized strategy that involves high-

productivity work hubs or nodes that focus personnel. IBM’s operations managers achieve productivity objectives through inventory control based on real-time data on business processes and market needs and variations. Inventory Management. equipment. High efficiency and productivity in the flow of information and resources are the objectives in this strategic decision area of operations management. among other variables. 8. Operations managers aim to keep high supply chain efficiencies and capacities in this strategic decision area. 7. Scheduling. The strategic decision in this area of operations management focuses on maintaining an effective workforce for the information technology business. For example. This strategic decision area of operations management has the objective of maintaining adequate resources and processes to support the information . In addition. such as standards for real-time information on server usage and related statistics. 6. Maintenance. IBM satisfies these objectives through a combination of automation and the use of standards and best practices in the information technology industry. Also. This approach aligns with efforts to address the interests of suppliers as stakeholders in IBM’s corporate social responsibility strategy. 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. For example. In this area of operations management. The company’s scheduling approach is based on the type of operations. IBM has operational standards for automating information flow throughout the organization. For example. the company’s operations managers utilize industry best practices in layout design for manufacturing. In this regard. The company has redundancy allowances and buffer inventory to address such operational issues and to account for fluctuations in market demand. Supply Chain Management. IBM’s organizational culture determines operations managers’ productivity methods. IBM’s organizational structure influences operational approaches used for this area. the strategic decision deals with maintaining adequate inventory while considering internal and external factors. and location of operations. these programs provide information and some technical support to help suppliers improve their operational capacities. and related resources in a limited number of worldwide locations. On the other hand. operational productivity requirements. Also. 5. Job Design and Human Resources. On the other hand. IBM’s 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). 9. For example. For example. considering the need to maintain cultural support for innovation. Appropriate schedules for processes and resources are IBM’s objective in this strategic decision area of operations management. as well as the various approaches used in improving human resource capabilities. human resource development programs are aligned with the specific functional requirements in the different segments or divisions of the organization. IBM must ensure adequate inventory despite challenges linked to vulnerabilities and risks facing firms in the information technology industry. 10. the company satisfies capacity goals through programs that support suppliers’ productivity growth. IBM’s schedules for semiconductor development are different from the schedules for server maintenance and upgrades. Layout Design and Strategy.

For example. In business. as well as materials and equipment for corporate function and production processes. IBM maintains high productivity levels in its technology laboratories through regular checks and upgrades of relevant equipment. operations managers implement a variety of programs to maintain the stability and growth of IBM’s resources. inclusive of human resources. . Such efforts ensure the adequacy of operational processes in the organization.