By Meike Beckford, Lead Director for Dosh
For my second post for this series of MBA highlights, I have been looking through the ‘archives’ of some of my earlier topics and stumbled upon operations management. I admit, it sounds dull! However; as soon as you start looking into it, you realise how fundamental it is to everything you do – in fact it essentially is what you do day-to-day. It’s also not just for traditional factory workers, it applies to any product or service, as we all do something in order to deliver an end result.
Our operations are our daily bread and butter and operations management is hopefully the way you connect that every day to the organisation’s strategy and goals. How does what you do day-to-day relate and contribute to your strategy? Even better, how does it add value to your customers and other stakeholders? In managing operations, we are involved in a continuing cycle of directing, designing, delivering and developing, which feed into each other to enable operations to influence strategy and vice-versa.
Principles and questions
There are many techniques and approaches which, as is often the case, have fallen in and out of fashion over the decades. From the so-called scientific management of a factory production line approach that tries to specify and control every step, to newer methods including behavioural approaches to job design, or Six Sigma’s focus on reducing variation in process. These methodologies claim to allow you to manage operations more effectively and have certainly helped many (if not all) that have used them.
For me, the most valuable elements are the general principles and questions they prompt, that allow you to reflect on your own approach. In particular, how do you understand value and how are customers judging you? What is most important to them and is the way you work tailored to this? For example, if speed is of the essence, is that the focus of your production process, ordering system and delivery? Alternatively, they may value quality, dependability, flexibility or cost, but it won’t be all of them, so which comes top for your customers, clients or people you work with?
An approach that particularly stood out for me, was ‘lean’ management. Originating in the Toyota Production System, it has since been adopted in many industries across the world and brings some valuable ideas that we can all adopt. It aims to maximise value as the customer defines it and eliminate waste.
Its five core principles are:
- Specify value as defined by the customer
- Identify the value stream i.e. every step you need to take
- Create flow between each value-adding step
- Pull from the customer order and through each step (rather than predicting demand and producing ahead)
- Work continuously towards perfection
A useful technique in order to apply this is value stream mapping: set out every single step taken in a particular process and then identify which add value. How long does each one take and what percentage of the processing time is therefore actually adding value? I’ll give you clue, it’s probably pretty low! It certainly was when we tried it on one of our processes. How long does a form sit on someone’s desk, or an email in their in-tray before the next action is taken?
Lean talks about 7 types of waste: over-production, waiting time, transport, process (bad design), inventory, motion and defectives – I expect you could find examples of all of these in your own organisation. You may not be able to get rid of them all, but recognising them as wasteful and looking at small improvements you can make will start to reduce them.
Better still, what does the team actually doing the work think they can do? This is key in lean thinking: put the control in the hands of front-line workers to adapt the process to become more effective. Here, we are no longer working under the assumption that people need to be told what to do all the time and watched to ensure they don’t slack off (as in ‘scientific management’). Most people will actually enjoy work and want to contribute if they are involved and empowered to do so.
So, I will leave you with this question: who is managing, developing and influencing your operations and how are they delivering the value that people want?
With thanks to Lancaster University Management School, Dr Stephen Eldridge and the whole Executive MBA team and cohort.
You can follow me on twitter @MeikeB88 and my organisation @DoshTweets www.dosh.org.