Technology

Definition: 

The application of innovative devices, machines and methods to improve operational processes (increased speed, increased quality, lower cost per unit, increased customer satisfaction—more sales, higher profitability.

How it can influence operations:

• Improved operational processes technology of a competitor allows them to reduce costs and produce more; resulting in loss of revenue and market share for other firms

• Technologies that are unique and hard to imitate are the best way for firms to gain a competitive advantage over rivals

• Communications technologies drive globalisation, allowing global firms to easily enter domestic markets and capture market share (online distribution—Amazon)

• Can assist in planning, designing, prototyping new products before large scale production—reduction in costs of new product design

• Forces firms to adapt (follow the new technologies and apply them to own processes) or innovate (Research and Development to generate improvements)

Technology can allow rival firms to reduce staffing costs (manufacturers) and improve service levels (speed, efficiency of service delivery).