Lecture 5 – Using Technology Principles of Business Operations

Principles of Business
Operations

Lecture 5:
Using Technology

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Learning Objectives for this Unit

On completion of this unit, students will be able to:

• Understand the different types of technology used

in manufacturing and service operations

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Introduction

• Technology has fundamentally changed how

organisations create goods and services
• Technologies
g allow organisations
g to meet the needs
and wants of their customers better than ever
before
• But technology has its problems, as you will see …

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Understanding Technology in
Operations 1
• Technologies fall into two basic groups
- Hard
- Soft

• Both of these can be used in manufacturing and

service operations

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Understanding Technology in
Operations 2
Hard Technologies

• These are equipment and devices used in the

creation and delivery of goods and services, e.g.
manufacturing machines

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Understanding Technology in
Operations 3

Soft Technologies

• These provide data to facilitate the creation and

delivery of goods and services, e.g. computerised
information systems

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Understanding Technology in
Operations 4

• Organisations use a combination of hard and soft

technologies to create value for their customers

• These combinations are limited only by the

imagination of the organisations themselves

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Manufacturing Technologies
• Important to select the right technology for the job
• Efficient operations require careful planning of machines and
people in the layout of the operations
• People must be trained to use technology correctly
• Performance should be continually monitored and improved
where possible
• Scheduling should be designed to meet customer deadlines
• Quality must be ensured

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Service Technologies 1
• Service technologies often use the Internet

• eServices create and deliver: time, place,

information, entertainment and exchange value to
customers and/or support the sale of goods

• Some examples follow on the next slide …

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Service Technologies 2

• Financial services – for example eBanking

• Government services – for example paying tax
online
• Entertainment – booking cinema tickets
• Health – booking hospital appointments online
• Transport – texting train and bus times
• Etc.

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Class Activity
• Work in groups of about 5

• Think of any “service” that you have received in the last few
days that involved information technology
- What was the technology used for? How did you access the
information? How did the information support the service? Anything
else important worth noting?
• 10 minutes

• Feedback to the class

• 5 minutes

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Technology Value Chains 1

• Whilst there are many forms of technology value

chains – three dominate:
• Business-to–Business ((B2B))
• Business-to-Customer (B2C)
• Customer-to-Customer (C2C)

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Technology Value Chains 2

• Value chains used to have several links, such as

suppliers, warehouses, distributors, shops, etc.
• The Internet has reduced the number of links for
many operations, e.g. Amazon deals directly with
the final customer and has cut out intermediaries
• BUT …

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Technology Value Chains 3

• Interestingly, the Internet has also created a whole

host of intermediaries that were not possible before.

• These collate information from various sources for

the customer and present the information in a
unified, user-friendly manner, e.g.
MoneySupermarket.com

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Business Intelligence 1

• Business intelligence systems collect data from

across the organisation into a common database

• This allows for easy access to the information

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Business Intelligence 2

• Data warehousing is a specially designed database

used to allow employees
p y to look at both historical
data and use forward analysis for planning
purposes

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Business Intelligence 3
• Data mining is an analysis tool used to identify
meaningful patterns and relationships in data

• This can be useful for marketing

gppurposes
p

• For example – identifying that customers who

bought a certain book would also be interested in
the accompanying DVD, etc.

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Integrated Operating Systems 1

• Integrates key processes and systems and shares
information through the value chain
• Four major characteristics:
- Focuses on the main structure and processes of the
industry
- Addresses key decisions to serve customers in the best
possible way
- Collects, stores, analyses and disseminates information
- Capable of making key decisions anywhere along the
value chain

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Integrated Operating Systems 2

Computer-Integrated Manufacturing Systems

• Use hardware, software databases and

communications to automate and control production

• Used from design stages through manufacturing to

distribution

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Integrated Operating Systems 3

Enterprise Resource Planning

• Integrates all aspects of a business into a single

repository

• Provides timely analysis of data and information

relating to all aspects of the organisation’s sales,
customer data, manufacturing data, departments,
etc.

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Integrated Operating Systems 4

Customer Relationship Management

• Strategy designed to learn more about customers

wants, needs and behaviours

• Used to build customer loyalty and consequently

increases revenue and profits

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Integrated Operating Systems 5

Revenue Management Systems

• Used for forecasting demand and allocating assets

across market segments

• Used for making bookings, determining overbooking

strategies and pricing strategies to charge different
customers, etc.

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Benefits of Technology
• Drives the global economy
• Creates new industries
• Merges otherwise separate industries
• Improves productivity
• Enhances quality
• Increases flexibility
• Reduces response times
• Frees people from boring and dangerous jobs

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Challenges of Technology
• Damage to reputation through technology failures
• Designing effective facilities for customers to return
goods or terminate services
• Protecting
g customer pprivacy y and financial details
• Information overload
• Security of data
• Continually having to learn new technologies to
keep pace with developments

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Impacts of Technology
• Technology increases pressure on frontline workers

• Managers must make good decisions about what

technologies
g to use,, and how theyy are to be
introduced in the workplace

• Customisation - focus on niche markets and

targeting customers

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Class Activity
• Work in groups of about 5

• For any organisation that you are familiar with …

- Provide three examples of how technology has changed
this organisation’s operations in the past fifive
e years
ears
• 10 minutes

• Feedback to the class

• 5 minutes

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Conclusions
• Organisations use both hard and soft technologies
across the value and supply chains

g g the way
• The Internet is changing y organisations
g and
society interact with each other

• Technology has many benefits, but can cause

problems for organisations and individuals if not
implemented wisely

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References
• Evans & Collier (2007) “Operations Management:
An Integrated Goods & Services Approach”,
Thomson

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Lecture 5 – Using Technology

Any Questions?

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