In the contemporary world, technological progress is one of the most critical trends that affect all aspects of business operations and performance. New technologies are being developed and introduced each day, offering unique opportunities for companies to improve their production, design innovative products, and make operations more efficient. The ongoing Fourth Industrial Revolution is expected to make manufacturing operations much more agile and efficient than ever before (Dalenogare et al., 2018; Lu, 2017). Consequently, the impact of technology on operations management today is crucial. In order to study technological progress in the context of operations management, it is essential to understand how the two are related. The purpose of the present paper is to highlight the effects that new technologies have on decision-making in operations management and on processes within the supply chain.
New Technologies and Decision-Making in Operations Management
First of all, new technologies are beneficial to decision-making in operations management because they allow for a higher degree of automation. As explained by Dalenogare et al. (2018), the Fourth Industrial Revolution, which is currently in progress, has created new, smart technologies that can replace humans in a variety of processes, including manufacturing, analytics, service, and more. Consequently, they allow for increased automation of operations and reduce the need for human resources. Automation contributes significantly to process outputs; however, it also reduces errors and variations in results by decreasing human involvement (Stevenson, 2018).
Errors and variations, in turn, are critical to decision-making in operations management because they directly affect the predictability of a particular process. By reducing variation and errors, new technologies allow making decisions more quickly and certainly through automation. For example, in the clothing industry, the introduction of sewing machines allowed increasing production outputs and making the process more predictable, since most machines have an expected fault rate. In this way, this new technology reduced the need for human labor in operations while simplifying decision-making in clothing industry operations.
The second way in which decision-making in operations management benefits from new technologies is through improved analytics. In order to make excellent decisions, operations management requires information about their processes, systems, requirements, and other factors that affect operations (Stevenson, 2018). Reid and Sanders (2019) state that the emergence of digital technologies had a significant effect on decision-making in this area by allowing managers to collect and analyze larger volumes of information. In the previous century, managers could only access data through observations, surveys, or interviews, and their capacity to analyze it was also limited. Today, digital technologies allow gathering data about machines and processes continuously (Storey & Song, 2017).
According to Choi et al. (2018), big data analytics has the potential to impact operations management profoundly by enhancing decision-making in various operational areas, including forecasting, inventory management, revenue management, and marketing. For example, new technologies record errors to calculate error rate, thus helping managers to make more accurate predictions about performance and production timescales. They can also record usage information, which can highlight how production operations can be simplified or distributed better across different machines or process stages. As a result, operational management can now obtain more information essential to their decision-making.
Nevertheless, it would be incorrect to state that the impacts of new technologies on decision-making in operational management are wholly positive. In order to reap the benefits of new technology, it is essential to implement it successfully first. New technology implementation is a significant concern in operations management because there are many risks and uncertainties involved in this process (Lewis, 2015). If the implementation is unsuccessful, the company’s operations and performance might suffer, leading to new problems. Therefore, it becomes clear that the implementation itself poses numerous challenges to decision-making in operations management, and incorrect implementation of technology can have the same negative influence.
New Technologies and Processes in the Supply Chain
New technologies also impact the supply chains of various businesses and industries. Specifically, they can lead to broadening and greater complexity of operational processes and activities within the supply chain by both necessitating these changes and allowing them to happen.
On the one hand, the development of technology made products exponentially more complex in terms of their production (Wei, 2019). For example, mobile phones that were developed in the 2000s and those that are sold by Apple or Samsung today are strikingly different in terms of composition. Similarly, in the car industry, there have been multiple changes that contributed to the driver’s experience, such as sound and automation. This trend is evident across many sectors and thus had a critical impact on supply chains because products today are made up of larger quantities of parts that are diverse in their function and technically complex. This change brought about new requirements for supply chains, which have to be broader and more complicated now. For instance, car producers today require multiple suppliers who would provide different components. In this way, technological development necessitated changes in supply chains.
On the other hand, technologies have also allowed for these changes to occur by providing the equipment to produce more complex products easily. In other words, production technologies evolved along with products so that companies could manufacture complex items in large quantities and sell them to customers. For instance, the use of lasers is essential to the production of small and complicated items because they allow for higher precision. Hence, technological changes on the part of suppliers have also led to the broadening and greater complexity of supply chains in various industries.
Implications for Supply Chain Operations Management
Greater complexity and width of supply chains can have a significant impact on the management of supply chains and their operations by introducing new practical challenges and leading to previously unknown problems. In particular, managing a growing number of suppliers, monitoring the quality of parts, tracing errors, and implementing performance improvements can become challenging (Alicke et al., 2017). These difficulties can have a negative effect on the outcomes of supply chain and operations management.
However, it should be noted that new technologies can also contribute to these processes in innovative ways. Alicke et al. (2017) note that some of the new technologies can transform the ways in which supply chains work, making them more efficient and helping managers to cope with higher complexity and breadth. For example, automation and robotics could enhance one of the most labor-intensive steps in the supply chain, namely, warehouse operations, thus improving the efficiency of entire supply chains (Alicke et al., 2017). Automation can also be helpful in other supply chain process steps, including quality control and logistics (Chrisos, 2019). New technologies can help to identify errors faster and with higher accuracy while also improving shipping and delivery processes.
At the same time, new technologies improve the end-to-end visibility of supply chains, which allows for better performance management. Modern digital systems are flexible and can thus create solutions for various supply chains, regardless of their complexity and the number of actors involved (Alicke et al., 2017). This improves supply chain and operations management by giving companies greater control and oversight of their supply chains.
On the whole, new technologies are pivotal to businesses in the contemporary world. Some of them enable companies to achieve a competitive advantage by introducing new, innovative products to the market, which attracts customers and helps them acquire a larger market share. Some technologies are used by businesses to bring about significant improvements to their internal processes, such as communication, production, marketing, and many others. In operations management, new technologies can have a positive impact on decision-making in two ways. Through increased automation, technological progress reduces variation in process outputs, thus making processes more predictable and controllable.
Though improved computing, new technologies allow access to greater volumes of data. By analyzing these data, operational managers can also make better and more efficient decisions. Still, the implementation of new technologies can complicate decision-making by introducing new risks and unexpected challenges. In supply chains, the effect of technological advancement is also significant. Innovations in products necessitated supply chains that are more complex and broad, while production changes supported these trends and helped to establish mass production of technically complicated items. Although these developments affected management in supply chains and operations, making it more difficult, specific technologies can be used by managers to cope with changes and establish efficient supply chain operations.
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