Technology Helps Companies Manage Their Operations
Downward price pressure, rising costs and intensifying competition have put companies under increasing pressure to control costs, provide better quality products and services, and respond faster to customers’ ever-changing needs. In the past companies streamlined their operations by focusing internally on production processes—creating more efficient cells and improving material flow. But now, this is not enough, and improvement efforts are being applied to management processes and transactional activities such as controlling the supply chain, reducing inventory and manufacturing to customer demand. Being truly efficient has taken on a whole new level of complexity.
The integrated set of transactional activities that a company uses to develop strategy, translate it into operational actions, and monitor the improvement and effectiveness of both, is called its management operating system (MOS) or management system. Corporate underperformance is usually due to management system short-comings, rather than insufficient resources or managers’ lack of ability and effort. The management system is made up of IT applications and human systems.
Companies that lack appropriate IT involvement are at a disadvantage when competing with competitors that use performance-enhancing technology.
The objectives of IT applications are wide-ranging, with each application serving a specific need within the overall system. At the end of the day, however, they all combine to serve a common purpose—to help the company compete effectively and efficiently by streamlining and standardizing its processes. Forecasting, scheduling, production control, inventory control, production reporting, external financial reporting, supplier performance management and estimating/pricing are just a few of the hundreds of management processes that companies must carry out reliably, accurately and quickly on a day-to-day basis to be a force in the marketplace.