The classic and current classroom texts on operations excellence tend to become too technical, specialized or applied.   Quality, process, lean, six sigma, supply chain management and other buzz words compete for supremacy.  Modern operations management can be distilled into eight simple insights.

The results of activities vary in ways that can be described and predicted by statistics and probability distributions.  Variability is inherent in human and natural activities.  Reducing variability is as important as improving efficiency or effectiveness.   Fail-safe solutions are especially valuable.  Confusing inherent variability with true exceptions/trends is common, but leads to wasted efforts.

Processes are everywhere.  Inputs are processed into outputs.  Improving the links in a process may be more important than optimizing component steps.  Processes cut across natural functions and require different management.  The broad outlines of product development, sales and operations are similar across diverse organizations, allowing rapid definition and optimization.

Most importantly, self-improving systems can be constructed by defining simple goals, measures  and feedback loops.  The cumulative effect of incremental plus breakthrough improvements from project teams and front line participants is enormous, often dwarfing the improvements from the far greater investments of organizations in day-to-day pursuit of urgent but unimportant tasks.  Self-improving systems clarify the different opportunities presented by re-engineering, kaizen and continuous process improvement efforts.

The quality paradigm, focused on perfection and eliminating waste, is a complement to the finance paradigm which focuses on short-term trade-offs and diminishing returns.  The true total direct plus indirect cost of quality together with the sales and margin benefits of higher quality usually justify greater investment in quality, even within a strict financial decision-making paradigm.  But the pursuit of extraordinary quality levels (six sigma) and the elimination of waste in all forms have revolutionized the way world-class operations teams approach their work and create new value.  The belief in the possibility of zero defects has led to a simple approach of repeatedly eliminating half of the remaining defects, improving all measures of customer value.

The notion that all value is derived from customers has ordered a complex world.  The balanced scorecard aligns resources to operations to customer perceptions to financial value in a logical fashion.  Processes can be directly evaluated to determine value added versus non-value added steps from a customer perspective.  The customer centric view has helped to align sales, operations and product functions.  It has led to a set of universal customer demands for quality, speed, flexibility, value, relationships and related costs.

The logical connection of sequences of variable events resulted in the overthrow of deeply held beliefs in planning, scheduling, optimal capacity, inventory buffers and production.  The pull approach promotes extra capacity, reaction, controlled production, zero inventory, single unit batches, flexibility and integrated suppliers.  It rejects many of the push worldview’s attempt to deterministically control a probabilistic set of process steps.  The implementation of lean manufacturing has demonstrated new ways to make processes more effective in a world of variable final demand.

People matter.  In the long-run, they are best positioned to operate self-improving systems for maximum total value.  Managers who can set clear goals and engage staff succeed.  They empower staff and hold them accountable for long-run progress while maintaining controlled systems.  They encourage the use of visual feedback systems, fail-safe steps and simple measures to gauge progress.  Managers provide resources, eliminate roadblocks and teach the principles of modern operations.

Finally, modern operations is only sustainable as part of an integrated planning, analysis and control system.  A stand alone quality system will fail.  When quality and operations goals, measures, plans, projects and reports are incorporated into the overall management system, they are self-sustaining.

There is synergy across the pillars of modern operations.  Understanding variability, defining processes, building self-improving systems, using ideal long-term goals of zero waste, pursuing customer value, using pull production designs, empowering people and operating a single management system are mutually reinforcing components of world-class operations.