Operations is responsible for the delivery of products and services. It has no primary foresight responsibility in a typical firm, but it does have a need to look ahead, like every department. It typically looks ahead on a more short-term, week to week and quarter to quarter time horizon.
Operations leaders have secondary responsibility for at least two foresight subspecialties:
1. Product, Service, and Project Management (a Management & Leadership subspecialty),
2. Quality (a Benchmarking & Quality subspecialty).
Product, Service, and Project Management are all core practices that help improve foresight in this department. Terry Schmidt’s Strategic Project Management Made Simple (2009), and Clark Campbell’s The One Page Project Manager (2012) are two good primers for this practice. The ideal operations manager is a great team player. They may be a middle manager working under top leadership and above line staff, and collaborating with the largest number of other departments, as so many departments have an impact on product and service delivery.
As an application of Pareto’s law, the 80/20 Rule, discussed in Chapter 1, some business analysts propose that organizational changes are usually 80% evolutionary (incremental changes, falling often under the realm of Operations) and 20% revolutionary (major innovations, the realm of R&D, top leadership initiatives). Whether this is true or not, the operations manager, like many managers, spends the large majority of their time and effort on making small efficiency or capacity improvements in internal business processes. They are often either learning how to affordably scale up their production to meet growing demand, or learning how to do more with less, or at times, both.
Quality, or quality control, is a key responsibility and foresight specialty shared between operations and the metrics and planning department. Fortunately there is a 130-year-old literature on continuous improvement and quality beginning with the manufacturing efficiency and labor productivity advances of Frederick Taylor’s scientific management (Taylorism) in the 1880s. The Toyota Way (2003) is a good intro to Toyota’s methods for continuous quality improvement, including the Kanban system for lean, just-in-time production. These methods allowed Toyota to use superior speed of execution, small batch learning and production, and quality as key strategies to grow steadily against much larger auto companies in the 1970s, to their dominant global position today.
One of the more exciting advances in operations in the last decade has been the generalization of the Toyota Production System as lean and agile methodology. Scrum is a very simple and very optimized set of lean and agile workflow methods, based on the Do loop, which allow extremely fast learning and doing cycles and fantastic performance gains for small teams. Read Sutherland’s Scrum (2014) for a great primer. This is currently the best book on operations for small teams that I’ve ever read. Read it, and change the way you work.
Want to be amazed operationally? Take a look at Wikispeed, a small scrum-based manufacturer that creates hand-built, 100+MPG cars for $25,000, one at at time, using a vastly accelerated operations process they call Extreme Manufacturing. Once you understand how fast, powerful, capable, efficient, and affordable scrum-based small teams can be, you’ll ask how to get that kind of decentralized yet accountable operations into everything we do. Could you imagine a scrum-driven health care system? A scrum-based urgent care and hospital network? One day, something like this might come to pass.
Lean Six Sigma, which combines Six Sigma quality with lean manufacturing speed initiatives, and agile methodology for IT work are two leading operations methods today. The Lean Six Sigma Toolbook (2004) introduces several useful management tools for speed and quality improvement.
Superior operations (quality, speed, product mix) are often worked for as a sustainable competitive advantage. Another leader in this respect is Zara, a Spanish retailer of clothing and accessories, used rapid prototyping, vertical integration, and supply chain automation to raise its operations tempo to two weeks, from new product development to store deployment, versus six months for the typical fashion retailer. This sustained advantage, along with continual market research on the latest global fashion trends, has allowed it to become a global leader in “fast fashion.”
Without any advertising budget, and violating the predictions of the standard business strategy playbook, Zara’s parent company Inditex Group has used this market research, operations, and quality-driven strategy become the world’s largest apparel retailer since opening its first store in 1975. Their rise to global success is one of many inspiring examples of operational excellence and foresight.