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If the company makes solid operational judgments, it will be able to produce affordable,
usable, and appealing furniture that customers will buy at a profit.
The Role of Operations Management in the
Organization
One of an organization's three strategic functions is operations. This means it
is critical to achieving the organization's objectives and ensuring its long-term
viability. Marketing and finance are the organization's other two strategic focus
areas. The overall organization strategy should be supported by the operations
strategy. Many businesses create a five-year pro-forma to help them plan their
operations. The pro forma makes use of data from previous and current financial
statements to forecast future events such as sales and capital investments.
Strategic Versus Tactical Operations Decisions
Operations choices are strategic in nature, meaning they have long-term implications and frequently entail
significant financial and resource commitments.
Tactical operations decisions have short to medium term impact on the organization, often involve less
commitment of resources, and can be changed more easily than strategic decisions. The following are some
tactical decisions:
•workforce scheduling
•establishing quality assurance procedures
•contracting with vendors
•managing inventory.
The effectiveness of the organization's strategic and tactical operations decisions determines
how well it can achieve its objectives. They also allow the company to gain distinct competitive
advantages that help it attract and retain customers.
For example, UPS, an international package delivery business, struck a cooperation with
Toshiba laptops, one of its customers. Toshiba should provide a repair service for its laptop
consumers. The previous method of providing this service was inefficient and time-consuming:
Most Toshiba customers believe Toshiba does an excellent job of repairing their computers when, in
fact, Toshiba never works on them! As a result of this operations innovation, Toshiba customers will
receive better service, as well as a strong and profitable strategic alliance between UPS and Toshiba.