Operations, technology and stakeholder value
Operations, technology and stakeholder value

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3.7 The role of technology

Technology is an increasingly important, if not dominant, element in operations. It was included as one of the resource inputs in the Figure 2 transformation model developed earlier, but treating it in this way potentially underestimates its role. Technology is often an important element of the product – it provides the product's innovative features, improved performance, and the very materials that goods are made from. It is also often a crucial part of the process to produce and/or deliver the product, for example digital technology to produce and deliver published material or indeed the use of ERP to assist with the management of processes across the enterprise and also between enterprises.

Activity 4

Using the transformation models in Section 3.3 as a guide, identify four different ways in which technology impacts on the operations of your example organisation.


Thinking about the OU, I came up with the following:

  • Technology is increasingly key in the delivery of course materials to students: material is available via the internet and/or on DVD. Technology is part of the product.

  • Teaching methods have been modified to make use of new technology, e.g. computer conferencing to provide self-help study groups, tutor support. Technology is an integral part of the process.

  • Course production involves the use of computers to generate word-processed documents. Technology is one of the inputs.

  • Databases and spreadsheets are used to report student achievement and opinions to course teams and award boards. Technology is part of the feedback control process.

The application of information technology is widespread in operations across all sectors of the economy. In particular, the growth of e-commerce or e-business has been a notable feature since the late 1990s. Table 5 summarises the various applications to operations and related activities.

Table 5: Application of ecommerce in operations
Organisational functional areasEcommerce applications and/or contributionsEcommerce tools and systems
MarketingProduct promotion; New sales channels; Direct savings; Reduced cycle time; Customer servicesB2B ecommerce; Internet ordering; Website for the company
PurchasingOrdering; Fund transfer; Supplier selectionEDI; Internet purchasing; EFT
DesignCustomer feedback; Research on customer requirements; Product design; Quality function deployment; Data mining and warehousingWWW-integrated CAD; Hyperlinks; 3D navigation; Internet for data and information exchange
ProductionProduction planning and control; Scheduling; Inventory management; Quality controlB2B ecommerce; MRP; ERP; SAP; BAAN; Peoplesoft; IBM ecommerce (web integrated)
Sales and distributionInternet sales; Selection of distribution channels; Transportation; Scheduling; Third party logisticsElectronic funds transfer; Online TPS; Bar-coding system; ERP; WWW-integrated inventory management; Internet delivery of products and services
Human resource managementE-recruiting; Benefit selection and management; Training and education using WWWEmails; Interactive websites; WWW-based multimedia applications
WarehousingInventory management; Forecasting; Scheduling of work forceEDI; EFT; WWW-integrated inventory management
Supplier developmentPartnership; Supplier developmentWWW-assisted supplier selection; Communication using internet (emails); Research on supplier and products with WWW and intelligent agents
(Source: Gunasekaran et al., 2002, p. 195)

Table Key

B2B = business to business

EDI = electronic data interchange

CAD = computer-aided design

EFT = electronic funds transfer

MRP = materials resource planning

ERP = enterprise resource planning

SAP = proprietary ERP type system

BAAN = proprietary ERP type system

TPS = transaction processing systems


From the examples so far, especially Tables 2 and 5 and the BonPain case (linked again below), identify one example each of how technology can be used to process:

  • materials

  • information

  • customers.

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The BonPain case has examples of materials processing: consideration of future automation of packing lines, and the use of dedicated technology in the form of specific equipment for the mixing, baking and freezing processes.

All the examples in Table 5 are to do with the processing of information.

Examples of customer processing are thinner on the ground so far. One is the communication of new product information via a website (Table 5). Here the customer is transformed from ignorant to knowledgeable by the application of this technology in this way. A second is the use of media production, technology, ticketing systems, etc. in the entertainment process of a cinema (Table 2).

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