Operations Management integrated with Other Business functions

Depending on the operations management mission, the organization of operations function and its relationship with other functional areas would vary. Heizer and Render (2011) however mention that operations function is most likely to meet management quotas when its strategy is integrated with other functions of business; marketing and finance.

Each of the functional areas of the business has a strategy for achieving its sets target/mission and they come together to achieve the overall mission of the organization. Strategies are however developed by analyzing the internal strength and weakness of the business (in terms of selected business area) and weigh them against external opportunities and threats; then determine the mission of the business (in terms of the selected functional area) Heizer and Render (2011) mentions that operation management strategy is developed around differentiation, cost and response. An example can be seen in dell computers that provide customer specific software in a few hours at a lower cost.

As earlier mentioned, operation function is most likely to find success when its strategy is integrated with the other functional areas such as accounting and marketing. For example, a manufacturing company creates products and meeting customer demand is reflected in managing inputs such as such labor hours and wages whose values are provided by finance. The result of this is that in meeting organization missions, the PM needs information on available resources in terms of labor cost, hours and other items of managerial cost budgets which are determined by the money markets and international exchanges; these information can only be provided by accounting/finance. Another way to see it I that operations management always takes cost into account because seeking the least-cost process solution is often an objective in itself (Wang and tunzulmann, 2000; Alison Bettley and Stephen Burnley,nd), although interaction of cost with other factors such as price and demand must be evaluated. All these information can only be provided through accounting as this makes interaction between OM and accounting very important. Integration OM activities with accounting can however be done through ERPs. The purpose of ERP is to facilitate the flow of information between all business functions inside the boundaries of the organization and manage the connections to outside stakeholders. (Bidgoli Hossein, 2004)

References

Bidgoli, Hossein, (2004). The Internet Encyclopedia, Volume 1, John Wiley & Sons, Inc. p. 707

Wang and Tunzulmann (2000). Complexity and the functions of the firm: breadth and depth. Available online from: http://www.sciencedirect.com/science/article/pii/S0048733300001062

Allison Bettley and Stephen burnley (nd). Towards Sustainable Operations Management Integrating Sustainability Management into Operations Management Strategies and Practices. Available online from : http://www.sba.pdx.edu/faculty/scottm/smaccess/GlobalSustainability/Day%206%20Readings/Towards%20Sustainable%20Operations%20Management%20-%20Bettley%20and%20Burnley.pdf

Jay Heizer and Barry Render (2011). Operations Management. 10^th ed. Prentice Hall USA