Verizon Communications, Inc. keeps high productivity and high efficiencies as targets in its operations management (OM) to maximize profitability and business resilience. In this regard, the company considers the 10 strategic decision areas of operations management in terms of satisfying high quality standards and target profit margins in various areas of the business. For example, operations managers ensure high quality in the operations of Verizon Wireless, which competes based on quality as a differentiator in the wireless telecommunications industry. As one of the main firms in the industry, the company is a case of effective strategic decision-making for the 10 areas of operations management, to support business goals for maximum performance and competitiveness. 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 that is appropriate for the activities of its divisions and subsidiaries, such as Verizon Wireless.
An analysis of the 10 strategic decision areas of operations management at Verizon Communications, Inc. yields valuable information that helps investors determine the stability and organizational health of the business. For example, the productivity measures that operations managers use for Verizon Wireless 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 high 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. Compatibility of Verizon Wireless and other divisions or subsidiaries of the company leads to high productivity in the telecommunications business. Product design specifications and requirements affect the organizational 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 Wireless and other areas of the organization. Effectiveness in this decision area contributes to 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 Wireless. 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. In the particular case of Verizon Wireless, 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 Porter’s 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 Wireless 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 mass media market, among others. Operations managers are concerned with matching business needs with human resource capabilities. For example, upgrades and technological enhancements in Verizon Wireless require corresponding training for employees to acquire new knowledge and skills to support the new technologies implemented in the organization. Operational effectiveness in applying training and related programs determines the productivity and profitability of Verizon Wireless. These conditions are also observable in the company’s other divisions and subsidiaries. The decisions and strategies implemented in this decision area affect the organizational 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 Wireless grows, so should the supply chain for materials used in the company’s wireless telecommunications infrastructure. For organizational coherence, operations managers consider Verizon Communications, Inc.’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 Wireless and apply changes in inventory control, accordingly. A proactive approach to inventory management helps in minimizing inventory-based bottlenecks and issues in capacity utilization. For instance, 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 Wireless schedules its technical teams in ways that strategically support network upgrades, in spite of 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 Wireless. 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 quality of organizational output. The PESTEL/PESTLE 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 standards. Productivity must remain optimal to support the company’s profit margins against the high infrastructure costs. Considering various divisions and subsidiaries like Verizon Wireless, the company uses different sets of measures or criteria for determining productivity. These sets match the separate operational requirements of divisions or subsidiaries. The following are some of these criteria used to measure the productivity of the company’s operations:
- Number of cell towers upgraded per year (Productivity of technical maintenance at Verizon Wireless)
- Number of tickets resolved per month (Productivity of customer service operations)
- Number of installations per month (Productivity of technical team for wired connectivity)
References
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- Verizon Communications, Inc. – Annual Report.
- Verizon Communications, Inc. – Form 10-K.
- Verizon Wireless – Official Website.