Operations Management in the United Arab Emirates
The orchestration of resources, systems and processes across an enterprise to consistently deliver high-quality products that are profitable is the catalyst of Operations Management (OM). One of the most multi-disciplinary and multifaceted disciplines of management science, OM encompasses the new product development and introduction (NPDI) processes, supply chain systems and procedures and their orchestration to delivering profitable, high quality products (Fisher, 2007). When enterprises choose to orchestrate their demand, supply and product systems together, OM concepts, frameworks and taxonomies are used as the galvanizing these diverse systems together to a unified strategy. Orchestrating demand, supply and product systems together is what often differentiates market leaders in industries relative to competitors struggling to retain customers and market share. There are many factors why this is the case, yet at a very fundamental level, the market leading enterprises in each industry have learned how to use OM techniques to compensate for significant time differences between demand, supply and product systems (Holmstrom, Framling, Ala-Risku, 2010). This ability to manage the varying cost, time and resource requirements of the demand, and supply and product systems of a business over time becomes reflexive and part of the broader knowledgebase of an enterprise. OM and its contributions to long-term knowledge and reflexive memory of an enterprises’ assumption base and culture drive long-term change in performance over time (Banker, Khosla, 1995). Theorists argue that OM is then the basis of organizational learning and lasting process, productivity and profitability gains (Holmstrom, Framling, Ala-Risku, 2010). The role of OM was orchestrator is just the beginning of the long-term change that occurs in enterprises over time. The lasting change is in being able to accelerate supply chain coordination, collaboration and planning while managing the demand, supply and product systems of a business in the midst of economic and pricing turbulence and market uncertainty, all the while attaining a profit (Geoffrion, 2002). Enterprises who have the most effective OM systems and corresponding results have been able to closely orchestrate them to market demand as well, while having the ability to stay agile and able to quickly respond over time (Banker, Khosla, 1995). Agility is as much of an attribute of change management as is the ability to manage the widely varying time requirements of the demand, supply and product systems that in large part determine how effective a given enterprise will be in managing its production strategies to profit (Fisher, 2007). The intent of this essay is to introduce and define the concept of OM, outlining the important of the OM function and defining the role of the OM manager. In addition, the role and value of OM in the United Arab Emirates is assessed. The UAE’s economy is dominated by industry and manufacturing, with 56% of GDP from this sector. The UAE faces a productivity paradox as it relates to industry or manufacturing however. With industry or manufacturing being the dominant source of GDP growth and only 15% of the workforce engaged in this sector of the economy, the need for extensive OM expertise is clear. These figures comes from the latest pages posted on the United States Central Intelligence Agency (CIA) Factbook website accessible at the following URL: https://www.cia.gov/library/publications/the-world-factbook/geos/ae.html. OM is a strategic skill set to the UAE, and must be continually improved to ensure national economic competitiveness and further contribute to GDP growth.
Defining Operations Management
Requiring the close coordination and synchronization of each functional area of an enterprises’ value chain, OM galvanizes the diverse functions of fulfillment, production, supply chain, sourcing and procurement to deliver profitable and high quality products. OM is predicated on management science techniques that are used for quantifying the performance of processes and continually improving them over time. Implicit in the definition of OM is the reliance on advanced management science techniques to continually streamline and improve business operations while at the same time ensuring the core process areas of the company stay customer-focused (Geoffrion, 2002).
The reliance on management techniques is also predicated on the need to oversee each aspect of management, surpassing the traditional planning, organizing, leading and controlling framework to encompass more agility and responsiveness to market requirements than traditional, hierarchical management structures require (Fuller, Mansour, 2003).
Moving beyond OM as a tactical framework to a strategic taxonomy and foundation for enterprise growth, the highest performing enterprises in their specific industries have successfully used OM techniques to change their cultures as well. The reliance on metrics and the intuitive, often unquantifiable aspects of organizational performance seen in aggregate over time in cultures is what differentiates OM-based strategies that deliver long-term results (Holmstrom, Framling, Ala-Risku, 2010). Analytics and metrics provide a foundation for measuring the performance of value chains, yet the continual fine-turning and development of effective e, agile strategies for staying aligned to customer requirements needs to be predicated on OM techniques if they are going to succeed (Fisher, 2007). Efficiencies and measures of performance define tactics, yet the overarching strategic plan of a business, especially in manufacturing, must be architected to allow for process, product and supply chain resiliency over time (Banker, Khosla, 1995). Only then can an organization get the most value possible out of an OM-based strategy. Over time these aspects of performance and reactions to market conditions become part of the organizational memory and reflex of a culture, and often processes, systems and programs get defined and implemented in response to market threats and opportunities. It is estimated that a minority of manufacturers today have attained a level of enterprise integration that ensures agility to external threats and opportunities while at the same time serving as a catalyst of organizational learning. This dichotomy is evident in the relative level of maturity manufacturing companies have globally in their adoption of OM. The top 10% of firms have the ability orchestrate demand responses, starting from their supply chains and proceeding through sourcing, logistics, manufacturing, and fulfillment and in high value, rapid production businesses, postponement as a supply chain strategy (Geoffrion, 2002). Examples of this include high tech electronics and the production of microprocessors and highly integrated electronics. The top manufacturing firms concentrate on creating demand driven value networks that seek to orchestrate the three potentially conflicting systems of demand, supply and product, all aligned to unique customer requirements (Holmstrom, Framling, Ala-Risku, 2010). All of these factors taken together are what differentiate the level of maturity in one enterprise relative to another, and underscore how critical the integration of tactical factors including development, production, factory manufacturing, maintenance, repair and overhaul (MRO) and continual production control are (Banker, Khosla, 1995).
Engraining the advantages of OM into a corporation also requires the most elusive and challenging aspect of any strategic change in how a business operates, and that is change management. Getting those most affected by the change in operations, processes will make or break any OM initiative (Fisher, 2007). It is often the relationships and trust people have with each other and their willingness to share information across the demand, supply and product systems, all running at different speeds, that determines the success or failure of an OM initiative. The challenge is to create a culture of trust and clarity of roles and responsibilities to further reduce resistance to change, mistrust and fear (Fisher, 2007). Change management is not a science, it defies quantification and categorization, and cannot be summarized into an equation. Instead, change management of OM initiatives and programs must begin with a transformational leader (Geoffrion, 2002). This is the single biggest criterion for success of any OM program and has continually proven to be the catalyst that ensures OM programs success. Change management strategies need to take into account the unique process, product and system requirements of an enterprise while orchestrating demand, supply and product systems to a strategic vision or goal. OM acts as the orchestration point of these strategies, ensuring manufacturing, production and operations systems all are unified to a common series of analytics and metrics (Fuller, Mansour, 2003). What is most critical about OM is that it must unify the shop floor to the top floor of an organization’s management reporting and ongoing strategic initiatives (Geoffrion, 2002). Change management is what creates the catalyst for cultural change that OM-based initiatives and programs make possible based on programs aimed at continual improvement (Geoffrion, 2002). Studies indicate that transformational leaders are most effective in leading significant, vision-driven change, while transactional leaders typically are better at incremental, continual shifts in strategy over time that are short-term in nature (Banker, Khosla, 1995). For OM-based initiatives and programs to succeed including those that are exceptionally difficult that include creating demand driven value networks, the CEO as transformational leader becomes a necessity (Fisher, 2007) (Fuller, Mansour, 2003). Not all CEOs have transformational leadership skill sets however which makes the attainment of complex OM-based initiatives even more difficult. It is the orchestration of the myriad of systems, processes and procedures of the demand, supply and product systems areas of a business that yield the…