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The Human Element in Operations Management

The Human Element in Operations Management. For as laws are necessary that good manners may be preserved, so there is a need of good manners that laws may be maintained. – Machiavelli We hold these truths to be self-evident. – Thomas Jefferson. Operations Management Frameworks.

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The Human Element in Operations Management

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  1. The Human Element in Operations Management For as laws are necessary that good manners may be preserved, so there is a need of good manners that laws may be maintained. – Machiavelli We hold these truths to be self-evident. – Thomas Jefferson

  2. Operations Management Frameworks • Traditional Optimization Framework: • perfect information • perfect control • leverage in quality of solution (policy) • Factory Physics Framework: • information captured in key measures (e.g., SCV's) • intuition more important than control • leverage from working with system's natural tendencies • ICB Portfolio Framework: • information system part of management problem • control not always optimal • buffers explicitly acknowledged

  3. ICB Portfolio Contrasts

  4. Information: complexity “off line” information Buffers: conceptual understanding flexibility Incentives: piecework “real” measures Control: skill levels learning curves Implementing Change: burnout champions Human Connections

  5. Self-Interest • Self-Interest Law: People, not organizations are self-optimizing. • Implications: • “Optimal” strategies may not produce optimal results. • Constraints can be good!

  6. Relaxing Constraints in Optimization Problem

  7. Diversity • Individuality Law: People are different. • Theory X vs. Theory Y: • empowerment • officer vs. enlisted mentality • Incentive Systems: • team-oriented incentives • social component of work

  8. Toyota Sewn Products System Note: performance best when workers arranged slowest to fastest (i.e., because blocking is minimized).

  9. Advocacy • Advocacy Law: For any program, there exists a champion who can make it work—at least for a while. • Upside of Champions: • selling the “vision” • motivating the troops • Downside of Champions: • risk of oversell • overreliance can prevent institutionalization of change

  10. gurus ABC ERP MBO JIT TQM BPR FMS OPT FMS FMS SCM MBO benchmarking Burnout • Burnout Law: • People get burned out. • Why? • Can you blame them?

  11. Planning vs. Motivating Question: how high to set the bar?

  12. Responsibility and Authority • Responsibility Law: Responsibility without commensurate authority is demoralizing and counterproductive. • Example: Deming's Red Bead Experiment

  13. Deming’s Red Bead Experiment

  14. Human Element Takeaways • People act according to self-interest. • Individuals are different. • Champions can have powerful positive and negative consequences. • People can burn out. • There is a difference between planning and motivating. • Responsibility should be commensurate with authority.

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