Technology plays a central role in modern operations, helping businesses reduce costs, increase speed, and maintain consistent quality across all aspects of production and service delivery.
Key Technologies in Operations
Technology in operations management includes a wide range of tools, systems, and software designed to streamline processes, improve resource utilisation, and enhance performance. These innovations support decision-making, reduce costs, and increase productivity.
Automation
Automation involves the use of control systems such as computers, machinery, and information technologies to handle different processes and tasks with minimal human intervention.
Industrial applications: Assembly lines, packaging, and material handling in manufacturing.
Office automation: Payroll systems, automated email responders, and digital filing systems.
Benefits of automation:
Reduces human error.
Enables 24/7 production without fatigue.
Increases output per hour, contributing to higher productivity.
Lowers long-term labour costs.
Automation allows businesses to meet demand efficiently, particularly during peak periods, and is essential in industries with repetitive processes.
Robotics
Robotics refers to machines that are programmed to carry out a series of actions automatically. Unlike traditional automation, robots can often perform more complex and variable tasks.
Examples: Car manufacturing (e.g. welding, painting), warehouse logistics (e.g. shelf-scanning and picking), and precision surgery in healthcare.
Advantages of robotics:
High precision and reliability.
Capable of operating in hazardous environments (e.g. high temperatures, toxic substances).
Can significantly reduce cycle times and improve consistency.
Real-world impact: Companies like Tesla use robotics extensively to speed up vehicle production while ensuring quality.
CAD (Computer-Aided Design)
CAD refers to the use of computer software to create, modify, analyse, or optimise a design. It allows businesses to visualise products before manufacturing begins.
Applications: Automotive design, fashion sketches, building architecture, electronic circuits.
Benefits of CAD:
Speeds up the design process.
Allows for easy testing and modification of designs.
Reduces material waste by simulating prototypes.
Ensures better product fit and accuracy.
CAD integrates seamlessly with manufacturing software like CAM, creating a streamlined design-to-production workflow.
CAM (Computer-Aided Manufacturing)
CAM uses software to control machine tools and related machinery in the manufacturing of components. It often follows CAD in the production process.
Applications: CNC (computer numerical control) machining, 3D printing, milling, and drilling.
Advantages of CAM:
Consistent and high-precision production.
Reduces the time taken from concept to production.
Minimises waste and labour errors.
Improves repeatability of processes.
Example: In the aerospace industry, CAM is used to produce turbine blades with exact specifications, ensuring safety and performance.
Inventory Management Software
Inventory management software is used to monitor and control stock levels, orders, sales, and deliveries. It ensures that stock is available when needed without overstocking.
Examples: Barcode tracking systems, RFID (radio frequency identification), and ERP modules.
Benefits:
Prevents understocking and overstocking.
Tracks inventory in real time.
Supports accurate forecasting and procurement planning.
Improves cash flow by reducing money tied up in excess inventory.
ERP (Enterprise Resource Planning) Systems
ERP systems integrate various business processes—such as production, inventory, human resources, and finance—into a single database and user interface.
Major platforms: SAP, Oracle, Microsoft Dynamics.
Benefits of ERP:
Enhances coordination across departments.
Provides real-time access to data for better decision-making.
Streamlines workflows and eliminates duplicate data entry.
Supports scalability and growth in larger organisations.
Note: ERP systems are particularly beneficial in manufacturing firms where coordination between supply chain, production, and sales is crucial.
Contribution of Technology to Operational Efficiency
Technology supports operational efficiency by improving resource use, reducing costs, and increasing the effectiveness of production processes.
Cost Reduction
Labour savings: Automation and robotics reduce the need for manual labour in repetitive tasks, leading to lower wage costs.
Reduced wastage: Technologies like CAD and CAM ensure precise material usage, reducing scrap and waste.
Energy efficiency: Smart systems can automatically control heating, lighting, and machinery to reduce energy consumption.
Example: A bakery that automates its dough-mixing and oven control processes can produce more loaves per day with fewer workers and less electricity.
Improved Consistency
Machines and digital systems produce standardised outcomes.
Software ensures that every unit or service is delivered to the same specifications.
Quality assurance tools can monitor output in real-time and alert managers to defects.
Outcome: This results in fewer returns, higher customer satisfaction, and a stronger brand reputation.
Increased Speed
Faster production cycles: Automation and robotics can significantly reduce the time taken to manufacture goods.
Real-time data access: Managers can access live reports on stock, machine performance, and customer orders.
Quick response to demand: Inventory software enables rapid restocking and reduced lead times.
Example: Zara uses tech-enabled systems to design, manufacture, and deliver new clothing within weeks rather than months.
Enhanced Quality
Fewer errors: Machines follow precise instructions, reducing the risk of mistakes.
Better materials handling: Automated processes maintain consistency and hygiene, especially in food or pharmaceutical sectors.
Continuous monitoring: Sensors and digital tools monitor conditions such as temperature and pressure, which affect product quality.
Result: Products meet higher standards with fewer variations and less rework.
Challenges and Limitations of Using Technology
Despite its benefits, technology in operations comes with financial, human, and ethical challenges that businesses must evaluate carefully.
High Initial Investment
Equipment: Purchasing automation systems, robotics, and ERP platforms requires large upfront capital.
Infrastructure: Older facilities may need to be upgraded to support new systems.
Example: Installing a robotic arm in a car factory can cost between £50,000 and £150,000 depending on complexity.
Impact on smaller firms:
Start-ups and SMEs may struggle to afford this investment.
The payback period could be several years, during which cost pressures remain high.
Key consideration: A business must assess break-even points and long-term return on investment (ROI).
Need for Training
Upskilling: Staff must be trained to operate and troubleshoot new technologies.
Transition time: Productivity may initially dip during the training phase.
Ongoing development: Rapid tech advancement means continual learning is needed.
Example: Employees using an ERP system must understand input procedures, data validation, and report generation.
Potential issue: Resistance to learning new systems can create friction and delay benefits.
Potential Job Losses
Redundancies: As machines replace manual roles, especially in manufacturing and logistics, job cuts may occur.
Deskilling: Some roles may become simplified to the point where skill development stalls.
Ethical implications: Widespread automation raises social concerns about inequality and unemployment.
Example: In retail, self-checkout machines have reduced cashier jobs significantly across major supermarket chains.
Reputational risk: A firm seen to be replacing workers purely for profit may face backlash from the public or trade unions.
Real-World Examples of Tech-Driven Efficiency
Understanding how real businesses have applied technology demonstrates its power in improving operations.
Automotive Manufacturing – Toyota
Toyota is a pioneer in lean production and technological integration.
Uses robots for welding, painting, and part installation.
Employs CAM systems for precision component manufacturing.
Introduced automated guided vehicles (AGVs) for internal logistics.
Impact: Consistent quality, reduced production time, and minimal waste.
Retail – Amazon
Amazon has set global benchmarks in logistics and inventory control through technology.
Utilises Kiva robots to move shelves to pickers, speeding up order fulfilment.
Uses AI algorithms for predictive inventory management.
Offers one-day delivery using optimised warehouse layouts and automated sorting.
Result: Increased customer satisfaction and decreased unit costs through high efficiency.
Food Production – Nestlé
Nestlé uses smart technology to ensure consistent food quality and hygiene.
Integrates sensors to monitor temperature and moisture during processing.
Uses automated packaging machines to reduce contamination risk.
Implements data analytics to optimise ingredient use and reduce waste.
Benefit: High-quality, safe products produced at scale with efficiency.
Construction – Engineering and Architecture Firms
CAD is used to design buildings, bridges, and infrastructure before breaking ground.
3D modelling helps identify potential design flaws and structural weaknesses.
BIM (Building Information Modelling) systems coordinate timelines and budgets among stakeholders.
Outcome: Fewer errors on-site, reduced rework, and smoother collaboration across teams.
Fashion and Apparel – Zara
Zara has revolutionised the fast fashion industry using technology.
CAD allows quick design updates.
Inventory systems monitor sales data in real time, feeding it back to design teams.
Logistics software manages small batch production and rapid global distribution.
Advantage: Zara can take a product from design to store in just three weeks, compared to the industry average of six months.
Healthcare – Robotic Surgery and Digital Records
Hospitals worldwide use digital and robotic tools to improve outcomes.
Robotic surgery systems allow delicate procedures with minimal invasion.
Electronic health records (EHRs) provide accurate and accessible patient data.
Automated diagnostics assist in quicker and more accurate assessments.
Impact: Improved recovery times, lower risk of complications, and efficient administration.
FAQ
Technology reduces lead times by speeding up each stage of the operations process. Automated machinery produces goods faster than manual labour, while inventory management software ensures stock is reordered promptly, avoiding delays. ERP systems integrate departments, allowing real-time communication between production, procurement, and logistics. This means fewer bottlenecks and more accurate forecasting. Technologies such as barcode scanning and RFID also streamline warehouse operations, making picking and dispatch faster, which shortens the time between order and delivery.
Technology supports decision-making through accurate, real-time data. ERP systems provide managers with comprehensive dashboards that track production rates, inventory levels, and supply chain performance. Predictive analytics tools help forecast demand more reliably, reducing the risk of overproduction or stockouts. CAD/CAM systems allow design and manufacturing decisions to be tested virtually before implementation, minimising costly errors. By accessing performance metrics instantly, managers can respond proactively to issues, such as machinery breakdowns or supplier delays, improving operational control.
Data analytics enables businesses to identify inefficiencies by analysing patterns and trends in production, quality control, and resource use. For instance, by tracking machine downtime or employee output, managers can spot performance issues early. Predictive analytics can also anticipate maintenance needs, reducing unexpected disruptions. Furthermore, customer behaviour data helps align production with demand more accurately, reducing waste. By basing decisions on evidence rather than guesswork, data analytics contributes to continuous improvement and cost-effective operations.
Mobile technology allows managers and employees to access real-time data and systems from any location, supporting faster communication and decision-making across different sites. Apps connected to ERP or inventory software enable remote stock checks, performance monitoring, and task updates. Field workers can input data immediately, reducing paperwork and delays. Mobile devices also support barcode scanning and electronic signatures, speeding up supply chain processes. This level of connectivity reduces downtime, enhances coordination, and improves operational agility across all business units.
Cloud computing allows businesses to store and access operational data and software online, reducing the need for physical servers and expensive IT infrastructure. It enables real-time collaboration between departments and sites, improving workflow efficiency. Operational systems hosted in the cloud can be updated automatically, ensuring the latest features and security patches are in place. Scalability is also easier, as businesses can increase storage and functionality without major investments. Cloud-based systems enhance flexibility, reduce IT costs, and improve access to operational tools anywhere with internet connectivity.
Practice Questions
Analyse how the use of robotics can improve a manufacturer’s operational efficiency. (9 marks)
The use of robotics can significantly improve a manufacturer’s operational efficiency by increasing productivity and consistency. Robots perform repetitive tasks with precision, reducing the likelihood of errors and product defects, which cuts waste and rework costs. Additionally, robots can operate continuously without breaks, enhancing output levels and meeting demand more effectively. This leads to reduced labour costs and improved speed of production. For example, in the automotive industry, robots are used for welding and assembly, leading to faster cycle times. However, the initial cost is high, and businesses must weigh long-term efficiency gains against upfront investment and maintenance.
Evaluate the impact of introducing an Enterprise Resource Planning (ERP) system on a growing retail business. (16 marks)
Introducing an ERP system can provide a growing retail business with improved coordination across departments, real-time inventory management, and more informed decision-making. It integrates processes such as sales, stock control, and finance, helping the business respond faster to market changes and customer demands. For example, ERP can automatically update stock levels after each sale, preventing overstocking or shortages. However, the high cost of implementation and the need for staff training may strain resources. Resistance to change and system downtime during the transition may also disrupt operations. Overall, the long-term benefits often outweigh short-term challenges, especially for scalable growth.
