Excellent operations management makes a substantial contribution to the profitability of commercial enterprises, writes David Gilroy.
Thank goodness my wallet was stolen on holiday recently. Don’t get me wrong. It was a painful experience losing cash and having to cancel credit cards. But it could have been much worse. It could have been my mobile phone they nicked and that would have been beyond catastrophic. Probably like many of you I am totally reliant on my mobile. My life revolves around it. Contacts, WhatsApps, emails, apps, electronic wallet, photos and two-step verifications. That mobile device in your pocket is a technical miracle and it has wormed its way into the core of our everyday lives. It is a technical marvel, displaying genius level operations and logistics.
Take the Apple iPhone for example. It is more than just a consumer product; it is a triumph of logistical precision and operational mastery. Behind its sleek design and advanced technology lies one of the most sophisticated supply chain and manufacturing systems in the world. Apple’s ability to deliver millions of iPhones globally, on time and with consistently high quality, is a result of meticulous planning, strong supplier relationships, technological integration, and a relentless pursuit of efficiency. At the heart of Apple’s operational success is a global supply chain that spans over 40 countries and includes hundreds of suppliers. From microchips in Taiwan to camera modules in Japan and assembly lines in China, every iPhone is the result of a vast international collaboration. Apple strategically partners with high-quality component manufacturers and often secures exclusive deals for critical parts, such as the A-series chips designed in-house and fabricated by TSMC (Taiwan Semiconductor Manufacturing Company). These partnerships allow Apple to ensure both quality control and supply stability, even in times of global disruption. This is all brilliantly illustrated in a recent Sunday Times article which explodes out the iPhone componentry and its multiple global sources. A masterclass in operations management.
How many meetings have you been to when all the ideas are flowing and the creativity has wings? Often dismissed as a “detail”, somewhere in that room is a person who’s thinking about how this is all going to be pulled together and function. How will this be operationalised? That person is the operator. In a previous article I extolled the virtues of the trader as the wealth creator and as such they are the most important member of the wholesale team. The operator runs them a close second. The trader plays lead guitar, the showmanship, the solos, the bar emptier. The operations person plays bass. They glue it all together. Often unseen, sometimes underappreciated. Take the bass line out of a song and it falls apart. Operations Management (OM) involves designing and controlling the processes of production and redesigning business operations for efficiency and effectiveness. According to Heizer, Render, and Munson (2020), OM is concerned with managing the entire system that produces goods or delivers a service. It is integral to strategic planning and involves critical areas such as supply chain management, quality control, capacity planning, and inventory management. OM is not limited to manufacturing; it is equally vital in services, including healthcare, education, finance, and hospitality. Retail and wholesale are all about moving product and OM is central to that, supporting inventory control, stock replenishment, logistics, and customer satisfaction. Excellent operations management directly influences an organisation’s competitiveness and profitability. Slack, Brandon-Jones, and Burgess (2019) highlight that OM provides the capability to respond swiftly to market demands, control costs, improve product quality, and deliver services efficiently.
Cost control and productivity enhancement are central goals of OM. By optimising resource use, labour, materials, energy, and time, OM helps reduce operational costs while maintaining or improving output quality. Stevenson (2020) argues that OM offers techniques such as process mapping, time-motion studies, and capacity planning to identify inefficiencies and eliminate bottlenecks. In today’s customer-centric markets, quality is a major determinant of brand reputation and customer loyalty. OM includes quality management systems such as ISO 9001 and methodologies like Kaizen (continuous improvement), which focus on meeting customer expectations consistently. Garvin (1987) outlines that quality can be viewed from multiple perspectives: performance, features, reliability, conformance, durability, serviceability, aesthetics, and perceived quality. OM helps organisations align their operations to ensure quality across all these dimensions.
Excellent OM supports risk mitigation and operational resilience. This includes compliance with prevailing legislation particularly around health, safety and hygiene. The COVID-19 pandemic highlighted vulnerabilities in global supply chains, underlining the importance of robust operations strategies. Operations managers play a vital role in identifying potential disruptions, diversifying suppliers, and creating contingency plans. Sustainability has become an essential aspect of operations management. Stakeholders increasingly demand environmentally and socially responsible practices. OM can contribute to sustainability by reducing waste, improving energy efficiency, and ensuring ethical sourcing.
Technological innovation has transformed operations management. The integration of Industry 4.0 technologies such as IoT, AI, robotics, and big data analytics has enabled real-time monitoring, predictive maintenance, and smarter decision-making. Operations managers now rely on digital tools to enhance visibility, efficiency, and agility. For example, Amazon uses sophisticated algorithms and robotics in its fulfilment centres to manage inventory and process orders with remarkable speed and accuracy. This technological integration not only increases productivity but also improves customer experience.
People are key to effective operations. OM involves workforce planning, recruitment, training, succession planning and performance management. Engaged and well-trained employees contribute significantly to process efficiency and quality outcomes. Lean management principles emphasise respect for people, encouraging employee involvement in problem-solving and continuous improvement. A culture that empowers workers and fosters collaboration often leads to higher innovation and operational excellence (Liker, 2004).
Excellent operations management is indispensable for organisational success in today’s complex and competitive environment. It enhances efficiency, reduces costs, improves quality, supports risk management, promotes sustainability, and leverages technology and people to create value. Wholesalers that invest in developing strong OM capabilities are better positioned to adapt, compete, and thrive in a rapidly changing world.
David Gilroy, Store Excel
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