Verizon’s Operations Management: 10 Strategic Decision Areas, Productivity

Verizon Communications Inc. operations management areas, 10 strategic decisions, productivity, telecommunications business strategy analysis case study
A Verizon office building in Greenpoint, Brooklyn, New York in 2011. The 10 areas of operations management at Verizon Communications Inc. are addressed through strategic decisions that aim for high productivity and high quality in the telecommunications business. (Photo: Public Domain)

Verizon Communications Inc. keeps high productivity and high efficiencies as targets in its operations management (OM) to maximize profitability and business resilience. The company considers the 10 strategic decision areas of operations management in terms of satisfying quality standards and target profit margins in various areas of the business. Verizon’s operations managers ensure high quality as a differentiator in the wireless telecommunications industry. The company is a case of effective strategic decision-making in the 10 areas of operations management to support business goals for maximum performance despite competition with AT&T, T-Mobile, Google Fiber, and other Internet service providers. Even though Verizon faces issues and challenges in further enhancing its productivity and operational performance with cost considerations, its overall business development indicates effective operations management.

This analysis of the 10 strategic decision areas of operations management at Verizon Communications Inc. yields information for determining the stability and organizational health of the business. The productivity measures that operations managers use for Verizon indicate the priorities and operational focus of the company in the telecommunications market.

Verizon’s Operations Management Areas, 10 Decisions

1. Design of Goods and Services. Based on the technological focus in Verizon’s vision statement and mission statement, this strategic decision area of operations management has the objective of maintaining consistency in the company’s quality of services through technological specifications. To satisfy this objective, operations managers focus on consistency through technological upgrades. For example, upgrading to ensure compatibility among systems, networks, and components minimizes operational inefficiencies. This beneficial condition leads to consistency in costs, quality, and resources throughout the organization. System compatibility in Verizon’s divisions and subsidiaries leads to high productivity in the telecommunications business. Product design specifications and requirements affect the organizational structure (business structure) of Verizon Communications Inc.

2. Quality Management. This strategic decision area of operations management supports the quality-based differentiation emphasized in Verizon’s generic competitive strategy and intensive growth strategies. The objective is to satisfy specifications that accurately represent customers’ expectations on product quality. For example, operations managers use the results of market research to set operational productivity and quality targets in the telecommunications operations of Verizon and other areas of the organization. Effectiveness in this decision area contributes to the brand image, which is among the business strengths identified in the SWOT analysis of Verizon Communications Inc.

3. Process and Capacity Design. Operations managers focus on the objective of satisfying process and capacity needs in this strategic decision area. These needs cover the technologies and other resources used to keep high productivity in the operations of Verizon Communications Inc. For example, process and capacity design requirements are partly based on the telecommunications network technologies used in the infrastructure of Verizon’s wireless services. Operational bottlenecks are among the concerns in this area of operations management, requiring managers to develop and implement solutions to minimize the consequences of bottlenecks on process efficiencies and capacity utilization.

4. Location Strategy. Verizon’s marketing mix (4Ps) influences the strategic decisions in this area of operations management. For example, marketing mix requirements for the location of offices determine the kinds of strategies applied for the efficient movement of resources throughout the organization. For Verizon’s wireless services, some strategies are based on such factors as the location of cell towers and the location of offices. The location of cell towers influences supply chain productivity. The location of offices influences the movement of goods and sales transactions with target customers in the telecommunications market. Effective location strategies contribute to organizational competence that addresses competition, which is determined as a strong force in the Five Forces analysis of Verizon Communications Inc.

5. Layout Design and Strategy. In this strategic decision area, Verizon’s operations managers are concerned with the optimized placement of workplaces along with the movement of resources to support productive operations. For example, the operational efficiency of Verizon partially depends on the facility layouts that help streamline the movement of network technologies and related devices needed in maintaining the telecommunications infrastructure. The company’s operations management approach also involves digital networks to facilitate the movement of information resources or digital data needed in operations.

6. Job Design and Human Resources. The objective in this strategic decision area of operations management is to support the continuous growth and development of Verizon’s human resources. Adequate human resources are essential to the long-term success of the company in the telecommunications market and media content distribution market. Operations managers are concerned with matching business needs with human resource capabilities. For example, upgrades and technological enhancements in Verizon’s wireless operations require training for employees’ knowledge and skills to support technologies implemented in the organization. Operational effectiveness in training programs determines the productivity and profitability of Verizon’s wireless operations. This factor of effectiveness is observable in all divisions and subsidiaries of the company. The decisions and strategies implemented in this decision area affect the organizational culture (company culture) of Verizon Communications Inc.

7. Supply Chain Management. Streamlining, cost-effectiveness, and reliability are the main objectives in this area of operations management. In this regard, Verizon’s strategic decisions include considerations for suppliers’ needs and how the business can improve its productivity despite the limits of the supply chain. Also, the supply chain must increase its capacity as the company grows and increases its operational requirements. For example, as Verizon grows, so should the supply chain for materials used in the company’s wireless telecommunications infrastructure. For organizational coherence, operations managers consider Verizon’s corporate social responsibilities and stakeholders in developing strategies for this strategic decision area.

8. Inventory Management. Inventory conditions affect business capacity and productivity. In this regard, the objective in this strategic decision area of operations management is to ensure the sufficiency and cost-effectiveness of Verizon’s inventory. Success for this objective requires strategic planning for inventory control, based on operational needs and conditions. For example, operations managers must continuously monitor the inventory needs of Verizon’s wireless services and apply changes in inventory control, accordingly. A proactive approach to inventory management helps in minimizing inventory-based bottlenecks and issues in capacity utilization. In applying a proactive approach, the company can implement inventory buffers based on operations forecasts.

9. Scheduling. This strategic decision area of operations management focuses on the objective of scheduling production processes and resources, especially human resources, to support Verizon’s goals for productivity and growth. Scheduling production processes involves adjusting the company’s operational capacity based on current demand. On the other hand, in scheduling resources, operations managers consider resource availability and how resources are utilized to support the various needs of the business. For example, Verizon schedules its technical teams in ways that strategically support network upgrades, despite limits in the company’s human resources.

10. Maintenance. Operations management must maintain satisfactory business output, processes, and resources to address this strategic decision area. For example, high quality of telecommunications infrastructure and services is an operational criterion used at Verizon. Also, the company’s operations managers implement maintenance policies for resources, such as network technologies and related equipment. Such policies include upkeep and upgrades to maintain high productivity and the quality of organizational output. The PESTLE/PESTEL analysis of Verizon Communications Inc. shows that technological trends impact the business and are among the issues considered to succeed in this area of operations management.

Productivity at Verizon Communications Inc.

To maintain its high business performance, Verizon needs to ensure high productivity combined with high quality. Productivity must remain optimal to support the company’s profit margins against high infrastructure costs. Considering its divisions and subsidiaries, Verizon uses different sets of measures or criteria for evaluating productivity. These sets match the respective operational requirements of divisions or subsidiaries. The following are some of these criteria used to measure the productivity of the company’s operations:

  1. Number of cell towers upgraded per year (Productivity of technical maintenance in Verizon’s wireless operations)
  2. Number of tickets resolved per month (Productivity of customer service operations)
  3. Number of installations per month (Productivity of technical support teams)