Most improvement projects do not need much more than common business sense and basic maths and statistics skills to find good solutions – but some do
OR aims to find optimal solutions to complex management problems when there’s a clear objective and a large number of variables and choices involved – it’s the cream of management sciences, employing a mix of creative and analytical thinking, applied maths, statistics and computer modelling
OR has its roots in WW2 when Professors Patrick Blackett and Charles Goodeve helped design new bombing and depth-charge patterns to maximise the chances of destroying the enemy’s factories and U-boats
After WW2, OR was adopted first by the steel industry (BISRA – British Iron and Steel Research Association) and then coal industry (NCB – National Coal Board), and later by many other large organisations in most sectors
Peace-time OR achieved considerable success in many areas including :
Production and inventory control to maximise output volumes, minimise cost, reduce queues and remove bottlenecks
Deciding when best to replace expensive capital equipment
Routeing and scheduling of delivery vehicles to minimise costs and maximise service levels
Rostering staff, in retail stores and prisons for example, to reduce costs and accommodate the need to balance home versus working lives
Forecasting shipping freight markets to time when and for how long to charter very large iron ore carriers and so minimise transport costs – we saved ‘tens of millions’ for British Steel doing just this
Optimising blast furnace burdens, using linear programming, to decide the best mix of various iron ores and coke to maximise output and minimise costs
Simulating the operation of major new capital investments – new steelworks, new ports to import iron ore or new warehouses and cold stores for instance – to determine best layouts and capacities of equipment and services before investing any major capital
OR still has much to offer but its focus on practical solutions to complex management problems has either become lost in a fog of academia or absorbed in a multitude of apps
The result is that, whilst the overall discipline is no longer recognised, the tools and techniques it involved continue to be in widespread use, especially for addressing the vast improvement potential that lies within the mix of resources and methods used by all organisations, big and small, public and private
