As companies grow, they need to operate smarter than ever. Operations research is the answer to that pressure. In the current financial climate, it’s essential to know your business is running efficiently and that every dollar invested is spent well — and as a manager, that’s not always easy to know.
Operations research (OR), defined
Operations research is a sub-field of mathematics that applies advanced analytical methods to help make better decisions. “Management science” and “decision science” are sometimes used as more modern-sounding synonyms. OR arrives at optimal, or near-optimal, solutions to complex decision-making problems using techniques from other mathematical sciences — modeling, statistical analysis, and optimization.
As a research field, OR overlaps with disciplines like industrial engineering and organizational psychology, largely because of its emphasis on human-technology interaction and practical application. It’s generally concerned with maximizing something — profit, performance, yield — or minimizing something else — loss, risk, cost.
Philosophies and methodologies
Operations research shares values with several continuous-improvement disciplines:
- Total Quality Management — built around Deming’s 14 principles.
- Kaizen — the Plan, Do, Check, Act cycle.
- Six Sigma — DMAIC, DMADV, and DFSS methodologies.
- Lean Thinking — identify value and value stream, then pursue flow, pull, and perfection.
- Theory of Constraints — identify the constraint, exploit it, subordinate other processes to it, and repeat.
What operations research can improve
- Competitive advantage
- Operational costs
- Customer and employee satisfaction and loyalty
- Call center operations
- Identifying gaps in processes
- Root-cause visibility into where problems actually are
- Service-level optimization
- Process simplification
- Pattern and trend identification
- Risk management
- Forecasting — staffing, scheduling, and queue wait times
- Sales — identifying where customers can be encouraged to buy more