[[{"@context":"http:\/\/schema.org","@type":"Answer","name":"10 principles of operations management","text":"<p>Randall Schaefer's presentation at the 2007 Association for Supply Chain Management (APICS) International Conference described 10 principles of operations management:<\/p> <ol> <li>Reality<\/li> <li>Organization<\/li> <li>Fundamentals<\/li> <li>Accountability<\/li> <li>Variance<\/li> <li>Causality<\/li> <li>Managed passion<\/li> <li>Humility<\/li> <li>Success<\/li> <li>Change<\/li> <\/ol>","@id":"https:\/\/www.the-future-of-commerce.com\/2023\/02\/28\/principles-of-operations-management\/#Answer"},{"@context":"http:\/\/schema.org","@type":"Answer","name":"Why operations management is so important","text":"<p>Here are a few ways the principles of operations management can be adapted to 2023 as businesses navigate an economy that may or may not achieve a soft landing:<\/p> <ul> <li>Efficiency<\/li> <li>Quality<\/li> <li>Flexibility<\/li> <li>Speed<\/li> <li>Cost control<\/li> <li>Dependability<\/li> <li>Continuous improvement<\/li> <li>Customer service<\/li> <li>Innovation<\/li> <li>Responsiveness<\/li> <li>Scalability<\/li> <li>Sustainability<\/li> <\/ul>","@id":"https:\/\/www.the-future-of-commerce.com\/2023\/02\/28\/principles-of-operations-management\/#Answer1"},{"@context":"http:\/\/schema.org","@type":"BlogPosting","keywords":["Organizational Resilience","https:\/\/www.the-future-of-commerce.com\/2023\/02\/28\/principles-of-operations-management\/#BlogPosting#3","Digital Supply Chain","Intelligent Enterprise","Future of Supply Chain","Future of Business"],"dateModified":"2023-02-28","datePublished":"2023-02-28","about":["http:\/\/www.wikidata.org\/entity\/Q1423657","https:\/\/www.the-future-of-commerce.com\/2023\/02\/28\/principles-of-operations-management\/#About","https:\/\/www.the-future-of-commerce.com\/2022\/05\/02\/what-is-operations-management-definition-types-examples\/#About","Supply Chain","Future of Supply Chain",{"@type":"Thing","name":"Operations Management","@id":"https:\/\/en.wikipedia.org\/wiki\/Operations_management"}],"url":"https:\/\/www.the-future-of-commerce.com\/2023\/02\/28\/principles-of-operations-management\/","mainEntityOfPage":"https:\/\/www.the-future-of-commerce.com\/2023\/02\/28\/principles-of-operations-management\/","description":"Learn foundational principles that can guide your company to operational efficiency and competitive edge no matter the economic environment.","name":"Principles of operations management for 2023 and beyond","headline":"Principles of operations management for 2023 and beyond","articleBody":"As businesses strive for greater efficiency, profitability, and adaptability\u2014regardless of economic conditions\u2014operations management principles play a vital role in the success of companies across industries.The mandate to do more with less will remain a constant as organizations of all sizes navigate ever-changing markets. Improve efficiency. Cut costs. Adapt processes. Ensure customer satisfaction with quality products, services, and experiences.Operations managers must approach an increasingly complex and fast-paced business world holistically and with agility using the best digital capabilities for the many facets of each process, including product design, development, and quality control as well as the logistics involved in forecasting, purchasing, inventory management, and shipping and delivery. All this must be balanced with maintaining excellent employee and customer experience.Although the practical tools and theoretical approaches to each business process may vary and will inevitably change, some foundational principles can guide your company to gaining and maintaining the operational efficiency and competitive edge so crucial for success in 2023 and beyond.  Enterprise, meet your customer.Interactions, data, front and back office \u2013 connected.It starts here.10 principles of operations managementThe principles of operations management balance disciplined control of the fundamental elements of operational efficiency, creative problem solving, and agile change management.Perhaps the most-cited guidance on this topic is Randall Schaefer\u2019s presentation at the 2007 Association for Supply Chain Management (APICS) International Conference. He described 10 principles:RealityOrganizationFundamentalsAccountabilityVarianceCausalityManaged passionHumilitySuccessChangeSchaefer blamed violation of these fundamental principles as a major contributor to the struggles of many companies. Businesses practicing the fundamental principles of operations management are the most profitable and competitive.Although Schaefer presented these principles in the context of why U.S. manufacturers were falling behind competitors from around the world, the core focus still applies to today\u2019s global economy and across sectors and industries.Let\u2019s take a closer look at Schaefer\u2019s principles of operations management and apply them to modern business.      What is operations management? Definition, types, examples                Every business needs effective operations management to drive profitability, achieve long-term success, and win competitive advantage. Learn what operations managers do and how they impact CX.      1. The reality of operations managementThe balance struck between managing highly controlled and predictable business operations and embracing rapid, inevitable change is well suited to succeeding in volatile times. Think of Newton\u2019s physics and chaos theory teaming up.Theories and thinking and principles are great, but no single one can solve all of your problems. That\u2019s because reality is messy and moves faster and in different directions than our best schemes and frameworks.Universal solutions don\u2019t exist. Principles and frameworks are tools, and it\u2019s easier and more comfortable to focus on them than a problem or set of problems that are wicked messy.But to be effective, focus on the problem(s), not the tool(s). Problems are the reality now; tools came from past problems that aren\u2019t always the same as today\u2019s problems. What worked last time may not work this time in the same way.      Forget perfection, focus on reducing supply chain risk in 2023                Rather than trying to perfect the supply chain, a better approach is to focus on risk, then build out the capabilities needed to manage it.      2. Striving toward the principle of organizationAs much as is possible, organize all facets of your operations into a cohesive, self-contained ecosystem. Seek maximum consistency. This allows for predictability and measurement, and therefore controlled improvement, leading to increased efficiency and profitability.Organization translates to consistent, predictable profits. That\u2019s the goal, the ideal. Keep in mind that reality creeps in with messy problems, so don\u2019t be surprised when something different happens.Plus, change is inevitable, and changing one thing changes something else, often in unanticipated ways. Newton\u2019s third law has its limitations.3. Sticking to operations fundamentalsInnovation is one of capitalism\u2019s favorite buzzwords, and for good reason. Whether in science, art, or business, innovation often leads to the major breakthroughs to change the world.Innovation is the fun and exciting stuff in the spotlight. But it\u2019s usually only possible because of diligence in the fundamentals of business operations and operations management that take place largely behind the scenes, including keeping accurate records of inventory, smooth logistics, human resources, and supply chain management.These functions and processes ensure that people, information, and materials come and go and get where they need to be on time and efficiently are fundamental operations that keep a business productive and profitable, creating margins for innovation to take place.Sticking strictly to the fundamentals, day in and day out, is the best chance for businesses to survive the lean times while nurturing innovation and preparing for growth.      What is supply chain: Definition, models, challenges                Supply chain is having an ongoing moment. Discover the trends, models, challenges, and requirements of modern supply and demand.      4. Operations managers and accountabilityHolding people accountable for their contributions and outcomes is a great motivator. Operations managers are responsible for establishing goals, standards, and metrics, and then evaluating the outcomes to determine the appropriate positive or negative reinforcement.These goals and standards need to be well communicated so that everyone knows what\u2019s expected and how performance is measured.      How to create a great employee experience: 8 engagement tactics                You've signed a top-notch candidate. Now what? To retain your stellar talent, you've got to learn how to create a great employee experience.      5. All about context: VarianceDepending on the context, goals, and perspective, variance can be good or a bad. When you\u2019re seeking greater control of processes to maximize efficiency and achieve lower costs, variances are invariably bad.However, when the goal is greater variety and a wider range of options, variance can be good. After all, innovation requires variance to develop and emerge as something new from a highly controlled process or system.But the fact is that some degree of variance is inevitable. Sometimes variance is creative and even designed into the system, and sometimes it\u2019s the symptom of an underlying problem.      Marketing in an age of high-frequency change                We face a constant barrage of daily disruption, but a data-first strategy gives marketers the agility to come out ahead.      6. Causality: Don\u2019t focus on symptomsGet to the root of the problem and solve that rather than treating symptoms that will spring back up over and over as long as the underlying cause exists.Symptoms must be dealt with, of course, but it can be tempting to focus only on symptoms and move on with your day once they\u2019re alleviated.7. People and principles: Managed passionWhile control and discipline can get companies through rough economic times, it\u2019s important to remember that your people are, well, people. They\u2019re what make or break your organization.Managers are responsible for running the business as efficiently and profitably as possible, which requires control over all aspects of operations, making them as predictable as possible to reduce the number and volatility of variables.Successful managers also know how to motivate and manage the passion of employees through accountability as well as rewards and constructive criticism.      Business transformation: Start with people, or don\u2019t bother starting                For successful business transformation, leaders must take a people-first approach. Learn the benefits of putting people first in transformation projects, including a better bottom line.      8. Humility: The truly wise operations manager\u00a0Socrates and Shakespeare had similar things to say about wise people being acutely aware of the limits of their own knowledge. Pride is another one of those forces that can be good or bad.Pride can be creative when it nurtures confidence to take on new challenges and do your best work. When pride keeps you from admitting that you don\u2019t know something or from asking for help or seeking wise counsel, it gets expensive quickly. You\u2019re going to encounter problems you haven\u2019t dealt with before.Good managers can admit when they don\u2019t know what to do. Then they ask for help, learn from the situation, and get on with business.      How to spot a natural leader: 3 stand-out leadership qualities                Three leadership qualities are the traits of an employee who's a natural born leader. Know how to identify future leaders on your team.      9. Balancing principles with agility for successMany of these principles may seem rigid and stifling at first glance, and some necessarily are, but it\u2019s important to balance the need for strict discipline and control in operations management with the understanding that adaptability is also a key principle for a business.Adaptability helps you establish and maintain operations, but also weather tough economic times like recessions and foster growth. You define success for your business, set goals with KPIs and OKRs. But as markets and economies change (read: as customers change)\u2014it\u2019s important to revisit, rethink, and revise what constitutes success.Internal operations are vital to the success of any business, and the reason your business operates is to deliver great products, services, and experiences to your customers.      Turn on a dime: Business agility starts with customer data management                Business agility requires great customer data management. Understand customers with a single, enterprise-wide view of data to pivot on a dime.      10. Managing changeThe only constant is change. Solutions are temporary. New problems and challenges will arise that don\u2019t fit the current playbook or set of tools at hand.The first tool wasn\u2019t lonely for long. New issues required new thinking and new tools. Managers may have favorite heuristics and methods for evaluating and attempting to solve problems, but it\u2019s important to avoid fixating on one view, one tool or one theory.\u201cManage for stability in the short term,\u201d Schaefer said. \u201cUnderstand that everything will eventually change and manage for change in the long term.\u201d[\/h2]That doesn\u2019t mean trying to predict the future \u2014 although the advent of data analytics, machine learning, and the internet of things has helped give managers greater visibility into operations and information for more accurate decision making). \u201cThe ability to manage change separates good managers from weak ones,\u201d Schaefer said.      Not your father\u2019s ERP: A blueprint for digital transformation                With an intelligent ERP, a company can embark on a digital transformation strategy to set them up for the future of business \u2013 in five steps.      Why operations management is so important\u00a0Here are a few ways the principles of operations management can be adapted to 2023 as businesses navigate an economy that may or may not achieve a soft landing.Boom or bust, the principles apply to achieving operational effectiveness in a range of areas:EfficiencyQualityFlexibilitySpeedCost controlDependabilityContinuous improvementCustomer serviceInnovationResponsivenessScalabilitySustainabilityTwo facets of operations management \u2014 supply chain management and logistics \u2014 incorporate most or all of these qualities and play important roles in making a business profitable and successful.Discipline and control are the essence of the principles of operations management. Increasing efficiency and cutting costs are evergreen concerns for being and staying competitive and profitable. But when the economy contracts and the threat of recession looms, businesses have to prepare for lean times. Budgets tighten and cost-cutting measures become top priority.      Standing in line in the middle of nowhere: Inflation and supply chain                Inflation and supply chain disruption are wreaking worldwide havoc as cost-of-living prices soar and economies falter.      Fundamentals that stand the test of timeAdapting the Pareto Principle (the 80\/20 rule) to operations management, Schaefer said that diligent execution of the core fundamentals can drive your business 80% of the way to success.Adaptability, change management, creative problem solving and application of the appropriate principles and theories to root causes of problems can drive the remaining 20%, whatever that definition looks like at the moment.Schaefer named the principles specifically for the APICS presentation, so later versions appear in various forms by different experts. But almost three decades later, his presentation remains relevant. Sure, the list has been adapted and iterated, but the essence of the principles carry on, serving as a reminder that the more things change, the more they stay the same.  In 2023, supply chain challenges can make for a wild ride.Get advice, best practices, + predictions from top experts HERE.","wordCount":1658,"subjectOf":{"@type":"FAQPage","url":"https:\/\/www.the-future-of-commerce.com\/2023\/02\/28\/principles-of-operations-management\/","mainEntityOfPage":"https:\/\/www.the-future-of-commerce.com\/2023\/02\/28\/principles-of-operations-management\/","name":"Principles of operations management","about":[{"@id":"https:\/\/en.wikipedia.org\/wiki\/Operations_management"},"http:\/\/www.wikidata.org\/entity\/Q1423657","https:\/\/www.the-future-of-commerce.com\/2023\/02\/28\/principles-of-operations-management\/#About"],"mainEntity":[{"@type":"Question","name":"10 principles of operations management","acceptedAnswer":{"@id":"https:\/\/www.the-future-of-commerce.com\/2023\/02\/28\/principles-of-operations-management\/#Answer"},"@id":"https:\/\/www.the-future-of-commerce.com\/2023\/02\/28\/principles-of-operations-management\/#Question"},{"@type":"Question","name":"Why operations management is so important","acceptedAnswer":{"@id":"https:\/\/www.the-future-of-commerce.com\/2023\/02\/28\/principles-of-operations-management\/#Answer1"},"@id":"https:\/\/www.the-future-of-commerce.com\/2023\/02\/28\/principles-of-operations-management\/#Question1"}],"@id":"https:\/\/www.the-future-of-commerce.com\/2023\/02\/28\/principles-of-operations-management\/#FAQPage"},"image":{"@type":"ImageObject","url":"https:\/\/www.the-future-of-commerce.com\/wp-content\/uploads\/2019\/07\/thumbnail-100a2d8a7ffdb15a3c460b78a110afe3.jpeg","height":375,"width":1200,"@id":"https:\/\/www.the-future-of-commerce.com\/wp-content\/uploads\/2019\/07\/thumbnail-100a2d8a7ffdb15a3c460b78a110afe3.jpeg"},"author":{"@type":"Person","image":{"@type":"ImageObject","url":"https:\/\/secure.gravatar.com\/avatar\/bd7e8b81e77548806af83e58df7c2e59?s=96&d=mm&r=g","height":96,"width":96,"@id":"https:\/\/secure.gravatar.com\/avatar\/bd7e8b81e77548806af83e58df7c2e59?s=96&d=mm&r=g"},"url":"https:\/\/www.the-future-of-commerce.com\/contributor\/josh-maday\/","name":"Josh Maday","@id":"https:\/\/www.the-future-of-commerce.com\/contributor\/josh-maday\/#Person"},"publisher":{"@type":"Organization","logo":{"@type":"ImageObject","url":"https:\/\/www.the-future-of-commerce.com\/wp-content\/themes\/hybris_foc\/assets\/images\/layout\/logo-foc-2x.svg","height":"96","width":"293","@id":"https:\/\/www.the-future-of-commerce.com\/wp-content\/themes\/hybris_foc\/assets\/images\/layout\/logo-foc-2x.svg"},"address":{"@type":"PostalAddress","name":"The Future of Commerce","addressCountry":"https:\/\/www.the-future-of-commerce.com\/#Country","addressLocality":"Newtown Square","addressRegion":"PA","postalCode":"19073","streetAddress":"3999 West Chester Pike","@id":"https:\/\/www.the-future-of-commerce.com\/#PostalAddress"},"url":"https:\/\/www.the-future-of-commerce.com\/","alternateName":"The Future of Commerce and Customer Engagement","additionalType":"news media","name":"The Future of Commerce","description":"News, information, and analysis on the future of commerce, including e-commerce, customer engagement, B2B, B2C, DTC, supply chain, sustainability, and purpose.","sameAs":["https:\/\/www.linkedin.com\/groups\/4844282","https:\/\/podcasts.apple.com\/us\/podcast\/a-call-for-a-better-experience\/id1479742201","https:\/\/twitter.com\/FutureOfCEC","https:\/\/www.the-future-of-commerce.com\/feed\/"],"contactPoint":"https:\/\/www.the-future-of-commerce.com\/#ContactPoint","legalName":"The Future of Commerce","parentOrganization":"https:\/\/www.sap.com\/index.html#Organization","numberOfEmployees":"https:\/\/www.the-future-of-commerce.com\/#QuantitativeValue","@id":"https:\/\/www.the-future-of-commerce.com\/"},"@id":"https:\/\/www.the-future-of-commerce.com\/2023\/02\/28\/principles-of-operations-management\/#BlogPosting"}],{"@context":"https:\/\/schema.org\/","@type":"BreadcrumbList","itemListElement":[{"@type":"ListItem","position":1,"name":"2023","item":"https:\/\/www.the-future-of-commerce.com\/2023\/#breadcrumbitem"},{"@type":"ListItem","position":2,"name":"02","item":"https:\/\/www.the-future-of-commerce.com\/2023\/\/02\/#breadcrumbitem"},{"@type":"ListItem","position":3,"name":"28","item":"https:\/\/www.the-future-of-commerce.com\/2023\/\/02\/\/28\/#breadcrumbitem"},{"@type":"ListItem","position":4,"name":"Principles of operations management for 2023 and beyond","item":"https:\/\/www.the-future-of-commerce.com\/2023\/02\/28\/principles-of-operations-management\/#breadcrumbitem"}]}]