Operations Management
Bridging the Gap Between Plan and Execution
Businesses are forever formulating plans, but how often are those plans recalled after execution? Looking at how closely execution follows plan frequently reveals a gap. Some plans are never executed—an enormous gap—and others are executed poorly or only in part.
Decision support systems and other optimization techniques premised on our statistically validated scientific models push business performance to much higher levels in relatively short periods of time.
To the extent that plans are better thought out than they are executed, bridging the gap between plan and execution could yield significant benefits. In many companies bridging this gap involves transforming vast stores of data that have been accumulated into useful information, ultimately and ideally, into knowledge. But most companies lack robust systems and models capable of effecting this transformation.
Optimization
Prospecting for the “Mother Lode” Opportunities for Improvement
Systems in general are collections of resources, materials, information, and decisions that flow in time and space. The points in time and space at which resources meet materials are called action-points, the points at which information meets decisions decision-points. Decision-points control the flows at action-points and, thus, the performance of the system. Systems being open, the aggregation of entities and their positions in time and space are continuously changing. The methodology of performance improvement consequently involves dynamically identifying improvement opportunities at each decision-point and using the most appropriate optimization models to guide experienced managers to the optimal alternative.
We have devised a set of statistically validated models that can be used in almost any business setting. The models interact to eliminate noise from data and transform that data into knowledge that can be leveraged to optimize a process, a system, or an entire organization. Experience has taught us to explore first opportunities for optimization because they are relatively straightforward to exploit and quick to deliver benefits. But the gains yielded by optimization should only whet a company’s appetite for the kinds of breakthrough improvements that are possible when firefighting is discouraged and problems with processes are solved once and for all.
Experience has taught us to explore first opportunities for optimization because they are relatively straightforward to exploit and quick to deliver benefits. But the gains yielded by optimization should only whet a company′s appetite for the kinds of breakthrough improvements that are possible when firefighting is discouraged and problems with processes are solved once and for all.Management of Technology is at least as important as the Technology itself