AlwaysOptimise

Given the frequent use of the word "optimisation" in companies, it's not surprising that optimisation is generally mis-understood by most people in an organisation.

 

For example, those who don't understand Optimsiation often view it as just another IT project, when it is in fact a business and process re-engineering project with a necessary degree of change management as well. True, Optimisation often uses computers and may involve programming, but therein ends the similarity with a traditional IT project. A typical IT project begins by specifying the output or end results. Next a firm set of requirements and a design plan are developed. From there, it is on to a sequential process of development, testing, modifications and rollout - sticking to the detailed project plan created at the onset of the project. Applicaiton programming and selection of off-the-shelf program modules are common in IT projects. Rarely do such projects involve true R&D.

 

In contrast, optimisation projects tend to be far more fluid and creative. Most do not lend themselves to off-the-shelf software solutions and require constant R&D, scenario testing and process re-engineering to find and embed the "optimal way" into an organisation and it's culture. With Optimisation, you must not only generate a good decision, but also generate the decision and answer quickly. If a user has to wait days for an answer, the optimised solution and process will never be accepted. Because of these unique characteristics, optimisation projects often need to be managed outside the traditional IT chain-of-command.

 

Optimisation uses IT tools and software to re-engineer core processes and outcomes.

 

 

Optimisation projects are also distinct from other performance improvement initiatives. For example, few programs have improved the quality and culture of commerce as much as Total Quality Management (TQM), LEAN Production and Six Sigma. All three focus on reducing the cost of product defects. Measures are put in place to support and eliminate deviations from the standard. The resulting uniformity reduces the costs of scrap, rework and returns. Underlying all such initiatives is the belief that "differences are our enemy." the challenge: ferret them out and eliminate them.

 

Optimisation is based on the opposite premise. Optimsers say, "Differences can be our friends. Rather than presenting us with challenges, they may well offer us opportunities, so let's explore." Optimisers develop ways to measure deviations from the standard in products and services with an eye toward uncovering different situational needs and tailoring unique responses. This reflects the optimsers bias toward adding value.

 

Take for example a quarry rock crushing facility. Rock is crushed into different sized dimensions in order for it to be sold to customers. While TQM, LEAN and Six Sigma will do a great job of reducing waste or product defects, and may always produce the correct size, in the correct volumes; they fail to consider the value that by-products such as dust, or by networking quarries together (for logistical cost reasons) may have on the entire profitability curve. Optimisation looks at the entire picture, including production, waste, transport, networking, by-products and sequencing to deliver an even higher value outcome.

 

Optimisation provides benefits and value that TQM, LEAN or Six Sigma sometimes don't even consider in their calculations.