Are all businesses information processing operations now?

Early on in our book (page 18) we explain that organisations can only process three things – materials (MPOs), customers (CPOs), or information (IPOs).    Historically the focus has been on the first two of these, the so-called dichotomy between manufacturing (MPO) and services (CPO).  These have been analysed so that different forms of MPO – project, job shop, batch, mass and continuous (see page 67) – have been identified, along with different types of service – professional, service shop, and mass (see page 68).  But, as far as I am aware, there is no clearly established typology of IPOs.

Why is this and why does it matter?  Partly this is because information clearly plays a role in all types of operation – without it factories, shops, offices and so on would simply fail to function.  And partly it is because there are relatively few ‘pure’ IPOs – businesses that solely process information (in fact most organisations are a blend of MPO, CPO, and IPO in different proportions).

The reason why it is increasingly important to understand IPOs better is two fold – the digital revolution and growth of social media.  Digitisation means that it has never been easier or faster to move information around, and social media has resulted in their being a huge increase in the amount of information that is of value to the operator.  This information revolution, along with other technologies such as robots and 3D printing, enable operators to be very flexible and respond directly to consumer needs.  (One simple example arrived in the post this morning – the supermarket chain we shop at sent us discount coupons, but only for items that it knows we buy).

Ironically, it is the social media companies themselves, Facebook, twitter and etc., that are now some of the best examples of ‘pure’ IPOs.  So we are thinking about trying to understand the IPOs concept better, perhaps through some kind of typology….


This entry was posted in Chap 01 Introduction, Chap 03 Processes and life cycles, Operations Management and tagged . Bookmark the permalink.

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