Operations management comprises planning, supervising, and implementing the production of products or services. Operations managers are mandated to executing daily productions and strategy in either manufacturing or services. Sometimes operations management is called production management; the field is cross-functional connecting other organizational departments such as finance, sales, and marketing. It is involved the creation of goods or services, development, production, and distribution of goods. The advancement of technology has transformed the role of operations management as it has become a key springboard. This is true thanks to technological innovations such as self-maintaining intelligent machines used in production and drones facilitating distribution. According to Reid & Sanders (2019), organizations that capitalize on effective technology in implementing their operations management practices thrive and flourish massively and gain a competitive advantage against their rivals. On the contrary, firms with inferior technology incorporated in their operations management may not survive in the contemporary market. The future of operations management will witness a surge in automation to the point that some people will hardly realize the way modern organizations function. This paper discusses ten functions of operations management and how they affected the failure of the Boeing 737max.
Operations managers are not only limited to company functions but also in manufacturing sections. They are needed to perform a variety of tasks as a part of their obligation. Some of the primary functions of operations management departments include finance management. Finance is a critical element in operations management. It is fundamental for operations managers to ascertain that all organizational finances have been used appropriately and comprehensively (Slack, 2018). They are perfectly being carried to ensure maximum creation of products and services. Perfect usage of finances will permit services or development to be built that will meet the consumer’s overall needs. Slack (2018) advises that the operations manager should refrain from wasting finances in unproductive practices. He should ascertain that all company finances are utilized for the manufacturing of essential products or services focused on satisfying the wants of consumers.
The second function of operations management is operation supervision. The key role of operations managers is to plan, direct, organize, and control the day-to-day routine operations of a company. The operations managers confirm that every activity is running efficiently and effectively. Operations are regarded as the operations management’s primary role and will help convert human efforts and raw materials into a permanent good and service that customers will manage to use. Product design is the third function of operations management. With the advent of modern technology, the selling of goods has become much more manageable. One of operations management’s primary roles is to ascertain that goods are designed as required and look into the market trends and the customers’ wants. Present-day consumers are focused on quality rather than quantity which is essential to establish a top-notch and durable quality product. Therefore, operations managers should design products as per market demands and trends. They should ensure that innovative approaches are incorporated within the goods, and their quality is upheld (Chary, 2017).
Maintaining quality is the fourth function of operations management. Chary (2017) notes that operations managers should endeavor to provide a better quality of goods. They should not interfere with the product quality. They should address the issues related to quality management and must supervise every task. If operations managers notice the presence of any defects, they should look into correcting such flaws. The sixth function of operations management in strategy formulation. The operations manager should implement pre-planned tasks. Paton et al. (2020) argue that tactics and plan formulation help companies maximize their resources and establish a competitive advantage against competitors. Business strategies refer to the configuration of the supply chain, capacity to hold finance and maximum utilization of human resources, and many more.
The seventh function of operations management is forecasting which refers to how software approximates certain events that could happen in the future. In operations management, forecasting can comprise an estimation of consumer needs related to production via a precise amount of goods needed within a specific time. Generally, forecasting serves a crucial role within the process of production (Paton et al. 2020).
Supply chain configuration is the eighth function of operations management. The main objective of supply chain configuration is to ensure effective controlling, monitoring, and management of main activities held in an organization. According to Robinson et al. (2016), the supply chain configuration begins from the supply of raw materials. It proceeds to make the final product and then sell it to the customers, which will meet their wants and needs. Delivery management is the ninth function of operations management. The manager ensures that the goods requested by a customer are delivered in time and the expected form (Robinson et al. 2016). Their primary role is to follow up with the customer to make sure that the delivered goods are what the customers requested and adhere to customers’ functionality requirements. Suppose the consumer expresses dissatisfaction or complains about the delivered goods regarding certain goods’ elements, the operations manager must get the feedback and forward the relevant departments’ concerns. The tenth function of operations management is navigating industrial labor relations. Managers have a role in resolving industrial relations issues that would impede productivity and lead to poor performance associated with misconduct among workers. Operations managers tackling industrial relations should often communicate effectively and manage workers via motivation (Spring et al., 2017).
Boeing 737 max was founded in 1916, and it remains one of the most renowned engineering firms in the world. The crash that happened to 737 MAX creates confusion about whether it was a collapse of the advanced aircraft control systems? Or was it the failure of operations management? Of course, technology and operations management are inseparable (Paton et al. 2020). Nonetheless, engineers, executives, and managers at Boeing were not embossed by modern technology’s unpredictability or complexity. In a sequence of decisions, Boeing 737 max put profits before safety. It failed to think through the outcomes of its practices. The operations management department did not tackle the wrongs that were happening at the company with the vigor and professionalism it deserved. The first operations management mistake occurred when the company decided to deploy MCAS (Bhaskara, 2016).
Boeing wanted to install more fuel-efficient and more significant engines on an older airplane named 737NG. These activities happened due to massive competition from Airbus and increased demand from customers wanting fuel-efficient and single-aisle planes. However, the new engines significantly transformed the stability and pitch angle of the older 737. Instead of redesigning the plane, the company decided to put MCAS adopted from a different plane. The concept was that software from MCAS would help the 737 Max to copy the operation characteristics of the 737NG model by bringing down the plan’s sensor whenever the sensor readings showed that the nose much higher than the nose. While this sounds like an appropriate strategy to react to customers’ pressures and beat their rivals, the decision proved several errors that led to the crash of the plane.
Bhaskara (2016) shows that the company’s collapse came from implementing similar decisions with slow but critical alterations in Boeing’s culture and strategy associated with poor operations management. Boeing’s merger with McDonnell Douglas in 1997, a smaller aircraft manufacturer with financial problems, came with various challenges. When a larger firm buys a smaller firm, the dominant culture becomes that of the bigger company. Previously, Boeing was popular for excellent engineering and safety. However, with McDonnel Douglas’s leaders’ arrival, they persuaded the Boeing owners to change their strategy and concentrate on shareholder value, stock price, costs, and competition (Cusumano, 2020). In other terms, McDonald Douglas subdued Boeing’s operations management department and took over the company leading to a hilarious media comment, “McDonell Douglas purchased Boeing using Boeing’s money.” For instance, when McDonell Douglas attempted to incrementally advance the older aircraft instead of constructing more costly modern models from scratch. As a result of the operations managers’ poor functioning, Boeing adopted this incremental approach to building the 737 Max. Here the operations management department failed to maximize their role of observing product quality, effective strategic formulation, and product design.
Boeing’s decision to shift from its main headquarters in Seattle, where the firm started and had its best engineering testing and manufacturing facilities, to Chicago for commercial aircraft also proved its incompetent operations managers. This shift led to a long physical distance between the company’s leadership and their technical teams concentrated on the formulation of the 737 series. The Boeing leadership defended their move asserting that it was a strategic decision to divide the company management from the commercial aircraft section. Additionally, the company defended its action, arguing that it was like a wake-up call to Boeing’s investors that the company was diversifying. Other than the commercial aircraft located in Seattle, Boeing had a lot on board to manage, including McDonell jet fighters, Hughes helicopters, Douglas commercial aircraft, a separate aerospace division situated in different areas, and easy access from Chicago. With the failure to conceptualize and internalize effective strategic operations, the firm encountered severe operations hitches (Cusumano, 2020).
The fourth operations management flaw that triggered Boeing’s fall happened during the intensification of competition from Airbus – the European consortium established in 1970 with massive support from the Netherlands, France, Spain, and Germany. Today Airbus is rated as the largest aircraft manufacturer globally, several steps ahead of Boeing due to a halt in 737 Max production. In 2011, Airbus had shortly surpassed Boeing to become number one in 2011. In the same year, Airbus become more competitive in the same segment similar to 737 max – the A320neo. Consequentially, Airbus received support from various European authorities, which put Boeing company at a financial disadvantage.
Furthermore, Airbus got a technological edge against Boeing. As a result, the company constructed the A320 series from scratch, first manufacturing planes in 1998. Comparing the operations management of these two companies, Boeing furnished a much older 737 series that was first introduced in the market in 1968. Concentrating on competitors denied Boeing an opportunity to strategize its practices to meet its customer needs and wants.
The issue of changing priorities at the board of director and CEO levels threw Boeing into leadership problems. The appointment of leaders who have little experience running the company led to the crashing of fundamental practices. For example, in 2005, James McNerney was appointed as the first CEO in the company not to be an engineer, and he served in that capacity until 2015. McNerney had an MBA from Harvard. He had served at Proctor & Gamble and McKinsey before assuming office as the GE Aircraft president, which maximized manufacturing jet engines.
McNerney had also worked as the CEO of 3M. McNerney’s experience was in marketing and strategy, and he was hired to improve Boeing’s financial performance. After his appointment, McNerney forgets the primary reason he was employed at Boeing- improving its financial performance. This was another flaw in the operations management section of the company that contributed to its collapse. Without implementing any robust financial plans for the company, McNerney directed the development of 737 max in 2011. The plane began operations in 2017 under a new CEO known as Dennis Muilenberg, who served in that position from 2015 to 2019. Muilenberg was a qualified engineer who had spent his entire life working at Boeing. However, according to the company’s current CEO David Calhoun, MuilenBerg continued with McNerney’s strategy. Consequentially, he aggressively promoted the production and sales of the Boeing 737 max. As a result, company shareholders would later file a lawsuit in 2020 arguing that during the reign of Muilenberg Boeing board of directors was misled regarding the severity of the 737 max issues while the committee concentrated on supervising safety, design, and development reports.
As a result of poor operations management, Boeing experienced severe quality control challenges. Englehardt et al. (2021) assert that operating a supply chain entails ascertaining that everyone involved is adhering to quality measures laid down. Quality control is a critical risk challenge when talking about firms offering material needed for production. This can be explained by the fact that some companies might yield goods that do not fit the expected quantity or allowance and outsource to other organizations to satisfy their deadlines. As a result of the number of companies and countries that Boeing company outsourced to, it became a key problem for the firm to oversee operations and ensure that the aircraft’s spare parts were of good quality. This problem negatively affected Boeing as it required employees to supervise all the firms involved in the supply chain.
The project management skills risk contributed to the failure of Boeing. With the massive dangers associated with 787 projects, people expected that Boeing would bring together a group of leaders with a certified record in managing the supply chain and come up with approaches to mitigate and anticipate a variety of risks. However, this was not the case with Boeing. Instead, they continuously hired unqualified CEOs who could not salvage the firm’s crisis (Spring et al., 2017). Labor relations is a function of operations management. But the management failed when it failed to involve its employees in the decision-making process before moving from Seattle to Chicago (Imad et al., 2021). Consequentially, the strategy backfired because the labor relations spoilt due to the decisions centered on outsourcing and a severe strike that cost Boeing expensively.
In conclusion, operations management is a key strategic function of any company. As we have seen from the Boeing case study, operations management is an important part of the company that can determine its success or failure. It is the firm’s strategy of ensuring the long-term survival of the company. The operations department should formulate strategies focused on providing the overall success of the company. The failure of Boeing 737 max came as a result of poor facility location policies of moving from its original area in Seattle to Chicago. Before moving to Chicago, the company failed to involve its employees in decision-making, leading to a costly strike. The management was unable to look into its workers’ industrial labor relations, hence experiencing serious operations challenges. Therefore, tactical operations policies led to long-term effects in Boeing’s operations as the organization could not prioritize key practices focused on boosting the company’s competitive advantage. Due to poor operations management, Boeing 737 max failed to formulate fundamental strategies to ensure long-term survival in the market.