Nothing New Under the Sun: An Introduction to Operations Management (OM)
Posted on July 21, 2011
8 All things are full of weariness;
a man cannot utter it;
the eye is not satisfied with seeing,
nor the ear filled with hearing.
9 What has been is what will be,
and what has been done is what will be done,
and there is nothing new under the sun.
10 Is there a thing of which it is said,
“See, this is new”?
It has been already
in the ages before us.
11 There is no remembrance of former things,
nor will there be any remembrance
of later things yet to be
among those who come after.
Ever been irritated by the subtle but constant reference by Agile and DevOps people to manufacturing? You may not even realize they are doing it, but you’ll hear reference to a book called “The Goal”, quotes from Deming, analogies to factories, etc. In many conference talks I could feel that there was some larger body of knowledge that speakers were alluding to, but not fully describing. What was this secret knowledge? Last year I finally stumbled upon the answer and I’ve been consumed by it ever since… long time readers of my blog will note a considerable change in tone and subject since Dec of last year.
This secret body of knowledge that is all around you, but not directly named is “Operations Management” (OM).
Classically, it is said that a company is made up of 3 primary organizations divisions: Finance, Marketing (which includes Sales), and Operations. Finance handles the books and internal resources, Marketing brings the market to the company and sells its products to that market, and Operations is the part of the company that does what your company does. This is an overly simplistic model, but it makes a complex organization easier to grok. If you run a hot dog stand, “operations” refers to ordering hot dog stuff, making hot dogs, serving customers, etc. If you make cars, “operations” refers to the factory floor managing supply chain, operating the assembly line, and delivering cars to dealers. If you run a web site, “operations” refers to the developers and sysadmins who make the product, run it, etc. So again, the model breaks down to bean counters, sellers, and makers/doers.
Have you ever thought about getting an MBA? I have. Except, when I looked at the curriculum my eyes somehow danced right over OM, because I didn’t know what I was looking for. Now I know. You can examine the OM departments at Harvard Business School and MIT Sloan. As with so many things today, the first step to knowledge is knowing what to look for, if you don’t know what its called you can search until your blue in the face and find nothing of real value.
My journey really took off when I found, at Church of all places, a donated text book entitled Fundamentals of Operations Management (4e). “WOW!” I though, “that what I’ve been looking for!” One look at the table of contents and I knew I’d stumbled onto the illusive body of knowledge I’d sought for so long:
- Introduction to Operations Management
- Operations Strategy: Defining How Firms Compete
- New Product and Service Development, and Process Selection
- Project Management
- The Role of Technology in Operations
- Process Measurement and Analysis
- Financial Analysis in Operations Management
- Quality Management
- Quality Control Tools for Improving Processes
- Facility Decisions: Location and Capacity
- Facility Decisions: Layouts
- Human Resource Issues in Operations Management
- Work Performance: Measurement
- Waiting Line Management
- Waiting Line Theory
- Supply Chain Management
- Just-in-Time Systems
- Aggregate Planning
- Inventory Systems for Independent Demand
- Inventory Systems for Dependent Demand
Jack pot! If more than half of those chapters don’t seem pertinent to IT departments, then you’ve never tried to manage one. The focus may be slightly different, but the core issues, problem domains, and related disciples are essentially identical. This explains why so many “experts” are making reference to OM, knowingly or unknowingly, because in manufacturing they dealt with the same problems, in essence, we have in IT. The Web companies (Twitter, Facebook, Flikr/Etsy, etc) are the ones leading the charge because more than traditional IT organizations, they really do look like the factory floor producing a single line of products.
So now… now I know what questions to ask. And ask I did. This opened up a whole new world to me that was right under my nose. The Toyota Production System (TPS) which became known in the US as “Lean”… W. Edwards Deming and Total Quality Management (TQM)… ISO-9001…. the undertones of ITIL, CobiT, ISO-27001, and Agile…. it all came together and made sense for the first time.
This sent me into an epic journey as I sought out book after book after book by the cornerstone individuals of OM, because they all wrote books that formed the modern body of knowledge. I now own all of Henry Ford’s books, Shigeo Shingo’s books, Taiichi Ohno’s books, W. Edward Deming’s Books, Walter Shewhart’s book, Fredrick Winslow Taylor’s book, Ludwig von Bertalanffy’s books, Peter Drucker’s books, and on and on and on. I couldn’t stop buying and reading these texts that describe the world we find ourselves in today, shaped by the work they did so long ago. All these points in my head started to be connected, one by one, and a fabric of knowledge appeared.
Friends, the point is this: there is nothing new under the sun. Things change, evolve, and morph, sure, but the principles are not new. If they were, we wouldn’t look back at Plato and Aristotle as wise today, much of what they debated 2400 years ago is still as pertinent today. So it is with Agile and DevOps, the core principles have been well explored and addressed in the last century of manufacturing as part of Operations Management. We only need adapt that knowledge, and the “experts” are doing exactly that.
Consider an example. As a consequence of the innovations Ohno was introducing at Toyota in building the Toyota Production Systems (TPS, aka Lean), and in particular that of Kanban (the basis of Just-in-Time production, which is pull rather than push based production), he needed a way to speed up the “changeover time” (setup time) of large pressing machines. These machines contain “die” which press sheet metal into, say, a car door. The changeover time could be as much as 6 hours… that means, when you decide to stop making part A and want to make part B, you have to shut down for 6 hours to setup the machine for the new part before starting production again. The way this was typically handled was to simply make a shitload of parts to build up a big inventory so that you reduced the likelyhood of needing to do another setup. They were after local efficiency (what the “Theory of Constraints” calls local optima) at all costs. This mass production method wasn’t going to work in Ohno’s new just-in-time world, the idea of stamping out only 20 parts and then changing to create another was completely idiotic. At least, it was until he put Shigeo Shingo on the job. It too Shingo years to make it happen, but ultimately he created a method know as “Single Minute Exchange of Dies” (SMED). With his method you can change dies in less than 10 minutes (single-digit minutes, not 60 seconds). This was the breakthrough that Ohno needed to make Kanban really work… and work it did. With out SMED, a technology approach, to compliment Ohno’s other methods (Kanban, 5S, 5W, Andon, Muda, etc) Toyota just wouldn’t have been the industrial revolutionary that they became.
Now, why the hell am I telling you all that? Look at what cloud did to IT. Just like Kanban, Cloud came along and showed us that our setup times are way too long, and changeover from one type of setup to another was awful. Configuration Management (CFengine, Chef, Puppet, etc) are the SMED of our industry. Same problems, same needs, different solutions, but similar approaches. There is no reason for us to re-invent all the wheels, alot of these issues are solved problems, if you just know where to look and what questions to ask, and have an open mind.
If you are like me and have been looking for something, but you know not what, go find yourself a book on Operations Management and get your journey started. You’ll have a massive head start over all your peers who won’t figure this out for another couple years (just as others already got a head start over us).