Facebook Inc.’s success as the biggest online social media business is based on effectively addressing the 10 strategic decision areas of operations management (OM). Each of these areas addresses operational concerns to maximize productivity and overall efficiency of the organization. Facebook’s human resources and facilities are developed to ensure that operations management is always effective in achieving the strategic objectives for these 10 decisions. With a growing number of users, the company must support its social networking website and mobile apps with best practices in operations management. Through continuous improvement, Facebook can ensure that it meets its objectives for the 10 strategic decision areas of operations management.
Operations management (OM) at Facebook Inc. is developed and maintained based on the company’s strategies and objectives for efficiency and continuous improvement in all business areas. Facebook satisfies the 10 strategic decisions for maximum productivity of its social media operations.
Facebook Inc.’s Operations Management, 10 Decision Areas
1. Design of Goods and Services. Part of Facebook’s design strategy is to continuously innovate its products. In this decision area, the objective is to achieve a product design that aligns with business goals through operations management streamlining. In the case of Facebook Inc., continuous innovation of the social media network and mobile apps, along with new product development, is seen as a strategic approach to ensure the company’s competitiveness in the long term.
2. Quality Management. Operations management focuses on meeting customers’ quality requirements in this strategic decision area. Facebook does so through suitable human resource policies. For example, the company uses small teams to rapidly innovate and continually improve the quality of the social networking website and related services. In addition, Facebook Inc. collects feedback from users to address issues based on user experience.
3. Process and Capacity Design. Considering its online nature, Facebook Inc. addresses this strategic decision area through automation. Operations managers are concerned about the processes and resources needed for adequate production of social media services for users and advertisers. In Facebook’s operations management, online technologies are used, alongside an innovative approach to human resource management. For example, iteration of product improvement and innovation is supported through online technologies that facilitate efficient dissemination of data among work teams in Facebook’s facilities.
4. Location Strategy. The operations management objective in this strategic decision area is to optimize nearness to resources and markets. In the case of Facebook Inc., nearness to markets is not an issue because the company’s social media services are accessible around the world through the Internet. However, the firm is concerned about nearness to resources. Facebook’s approach is to keep its operations near the best talent pools. For example, the company’s headquarters are located in Silicon Valley, which provides access to the area’s high quality talent suitable for computing technology businesses. Also, Facebook maintains most of its overseas offices in urban centers for ease of access to the labor market.
5. Layout Design and Strategy. The efficiency of internal communication and movement of human resources and materials is the strategic objective in this decision area of operations management. Facebook addresses this objective through innovative layouts of its offices. For example, the company integrates open spaces to encourage brainstorming and creative interactions. Such interactions are essential in supporting Facebook’s product development processes to improve the social media business. On the other hand, for facilities that house web servers, Facebook’s operations managers use industry standard layouts to maximize capacity and utilization.
6. Job Design and Human Resources. Facebook Inc.’s operations management is concerned with developing human resources in this strategic decision area. Facebook’s aim is to maintain an adequate and capable workforce for the online social media business. For example, the company uses a continuous recruitment strategy. Facebook’s corporate social responsibility strategy addresses this concern through a Ph.D. program that allows students to work at the company’s offices. This program also allows the company to access high quality talent and future hires.
7. Supply Chain Management. The bulk of Facebook’s operations management concern in this strategic decision area focuses on corporate facilities. Most of these facilities are located where supplies are accessible. For example, many of Facebook Inc.’s data centers are located in or near Silicon Valley to optimize access to equipment supply and the labor market. In addition, Facebook develops and maintains its data centers, instead of purchasing customized equipment from vendors. This approach supports the competence of the company’s social networking website and related social media services.
8. Inventory Management. The objective in this strategic decision area is to optimize inventory purchasing and holding. Facebook Inc.’s approach for this area is just-in-time inventory, which involves same-day purchasing and installation of supplies, especially equipment used for the data centers. Facebook designs its data centers and outsources the manufacturing of equipment.
9. Scheduling. Facebook focuses on continuous iteration to address this strategic decision of operations management. This area’s objective is to ensure that intermediate and short-term schedules satisfy business needs. In Facebook’s case, scheduling for data centers is regular, while scheduling for offices is flexible. For example, at data centers, equipment arrives and is installed on a daily basis. At offices, Facebook Inc. uses flexible schedules to enable and empower work teams to creatively discuss and solve problems. Such flexibility supports the continuous improvement of Facebook Inc.’s social networking website, mobile apps, and advertising services.
10. Maintenance. Facebook Inc. operations managers use a variety of approaches for adequacy of business processes. Such adequacy is the operations management objective in this strategic decision area. For example, Facebook has a data center located in Sweden to take advantage of the country’s cold climate in minimizing maintenance costs for equipment temperature control. Facebook Inc. also has dedicated IT teams for iterating and producing new versions of Facebook’s social media website and mobile apps.
Productivity at Facebook Inc.
Facebook’s productivity depends on the effective application of operations management principles. The company uses a wide variety of criteria or measures to determine actual productivity in supporting its social media business. The following are some of the criteria Facebook Inc. uses for this purpose:
- Number of servers per day (Data center productivity)
- Issues solved per day (Work team productivity)
- Number of messages processed per day (Customer service productivity)
- Facebook Inc. Form 10-K, 2015.
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