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Operations Management

Define the role of the business in society and the role of profits in business..

Define the role of operations management within a business.

Describe the concept of command intent

Describe how operations managers accomplish the command intent of an organization.

Describe the essential operations management tasks.

Illuminate differences between a production worker and a knowledge worker.

Describe Human Sigma as a model for customer service operations

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Learning

Goals

What is O.M

• When most people think of the concept of management they are envisioning operations managers.

• Operations managers are often referred to as “front-line” managers, as they typically are involved in directly overseeing a business' major functions (e.g., dispensing prescriptions

• While operations managers typically have input with the executive team on all phases of the management of a company.

Production &

Operations

Management

• Production: Application of resources such as people and machinery to convert materials into finished goods and services.

• Production and Operations Management: Managing people and machinery in converting materials and resources into finished goods and services.

Operations

Management• it is the responsibility of operations managers to execute

the vision and mission in compliance with the values of the organization.

• Operations managers must make the daily decisions required to keep the business moving in the right direction.

• Operations management involves a variety of tasks that managers perform to control, organize, and lead the work team to fulfill the goals and objectives of the organization

• Usually the highest ranking pharmacist on duty must play the role of the professional operations manager to ensure the provision of quality patient care.

Production Systems

The Role of Business in Society

and the Role of Profits in a

Business

• The profession of pharmacy exists in society to provide a variety of goods and services related to the appropriate management and use of medications.

• These goods and services provide an array of benefits to patients, health careproviders, and society at large.

• The primary role of any pharmacy in society should be to benefit those that they serve, not necessarily to make money for pharmacy owners.



Business

• if any pharmacy fails to bring in enough revenue to cover their expenses, the pharmacy will not be able to continue to provide goods and services that create benefits for others.

• And for a for-profit organization in a market-based economy pharmacies must be able to generate a profit large enough to justify an owner's investment in the organization.



Business

• If pharmacies cannot generate profits, owners will lack incentives to invest in pharmacies, leaving patients and society without the benefits they provide.

• A good way to demonstrate how this principle works is to ask the following question.

• 1- Why Did You Choose Pharmacy as a Career Path?

• The typical response from a prospective student is something like, “I want to help people”

• students are afraid to mention money and as a motivator because they fear this motivation will appear unprofessional

• Most pharmacists, would like to seek a greater return on their investments of time, effort, and financial resources

• In any business and any profession there is a public mission, to serve society, and there is a private mission, to provide income for the operators of the business

• A vital function is necessary for generating money to pay employees, lenders, and stockholders.

• Effective production and operations management can:

– lower a firm’s costs of production.

– boost the quality of its goods and services.

– allow it to respond dependably to customer demands.

– enable it to renew itself by providing new products.

Strategic Importance

of the Production

Function

The Role of Operations

Management Within a

Business• to ensure the smooth functioning of the business

unit to achieve both its public and private missions.

• to perform then function for the sake of which the institution exists;

• to make work productive and the worker achieving;

• to manage the institution's social impacts and to discharge its social responsibilities

• must understand the vision, mission, and goals of the organization to direct his workforce.

The management structure

• Requires multiple roles to be played.

In large public corporations:• chief executive officer (CEO) whose

responsibility it is to direct the strategic planning• a chief financial officer (CFO) who directs the

budget and financing activities • the chief operating officer (COO) who is

responsible for the day-to-day operations of the business.


• In a small business (e.g., an independent community pharmacy, a consulting firm),

• A single person (e.g., a pharmacy owner, a consultant) may play all of these roles


• The operations manager focuses the energy and intent of the organization on what must be done today to accomplish the long-term goals of the business.

• These focused activities must also behave in alignment with the vision, mission, and values of the organization


At the most basic level, operations managers decide:

• 1. What must be done right now?• 2. Who needs to be doing it?• 3. What resources do they need?• 4. When is the work finished?

Decisions under the

Purview of OM

Designing goodsand services

What should be offered for sale and at what price? How should the business arrange the price and service component of the product to maximize perceived value using the relative value theorem?

Process strategies

What is the best workflow methodology to ensure productivity?

Managing quality How do we provide sufficient productivity while maintaining impeccable quality?

Location strategies

Where is the best location for this service to be offered?

Layout strategies What is the best physical layout to ensure productivity? Does this layout fit with the pharmacy's workflow process?

Human resources

How do you motivate and inspire people to do excellent work? How can you develop engaged employees that represent your brand and develop relationships with your customers?

Decisions under the

Purview of OM

Scheduling When and where should each employee be when our customers needservice?

Supply chainmanagement

Which suppliers will best help the company meet the needs of our customers?

Inventorymanagement

How does the business insure that it will have enough without having toomuch or too little inventory?

Maintenance How can the business keep all the equipment and facilities in good workingorder?

The Theory of

Command Intent

• the most challenging component of managing a pharmacy's operations is managing its human resources.

• A manager cannot supervise what every employee is doing all day long

• The manager must find a way to ensure that employees are working on the right tasks at the right time

• operations managers must develop plans and communicate them effectively.

The Theory of

Command Intent

• the U.S. Army has determined that the most successful battlefield commanders are the ones who are able to think critically and change tactics during a mission, while still working toward the ultimate

• Good leaders are aware of the command intent of their orders and understand that circumstances constantly change while in battle.

The Theory of

Command Intent

• Command intent gives a description of what the desired outcome is in relation to the current mission.

• It focuses on the endpoint, and does not summarize how to achieve that endpoint.

• Never tell people how to do things

example

• a vision statement for a community pharmacy may be “To be a recognized leader in customer service by providing affordable, timely, and effective drug therapies to improve our patients' lives.

• Stock arrives on Tuesday

• Additional scheduled Tue staff call in sick

• the employees will recognize the priority of customer service and cease putting away the order to help meet customer demand..

How Do OM Carry Out

Command Intent?

• The operations manager knows the command intent and how to communicate it,

• operations manager must set specific goals for what needs to be accomplished at the pharmacy.

• These goals must be set in real time based on an accurate assessment of the situation

• Improving the speed and efficiency of patient service.– Are there bottlenecks in the workflow? Is the

pharmacist's time being used efficiently? Is the business meeting its productivity goals?

• Offering more services to patients.– Is there a service that a pharmacy's

customers want or need that they are not currently providing? Can they provide this service at their traditional standard of quality? Do they have the expertise and talent to make it work?

• Creating and maintaining a collegial work environment for employees.

• Do employees enjoy working at the pharmacy? Are they challenged to excel? Does the team work well together when it matters?

• Improving the knowledge of health care team members.– Can the pharmacy staff use their talents to

improve the efforts of others? By identifying problem areas and resolving those problems, can the pharmacy improve their efficiency?

• Executive-level management sets the vision and mission for the long-term value strategy of an organization.

• Operations managers use this guidance to create the goals or command intents of the business.

• The operations manager then must turn these goals into actions that create results.

• list of operational goals should be formulated with feedback from employees, customers, and management. The list should be clear, concise, and align with the overarching vision of the business.

• If the pharmacy supervisor is not present

• or able to provide guidance at a particular time, a staff pharmacist must perform the operations management roles

• This is why all pharmacists, from administrators to staff pharmacists, must have some degree of management skills

• When the official pharmacy supervisor is off duty, it must be clear to the work team who is in charge.

• In health care professions, the professional authority bestowed upon practitioners (e.g., pharmacists, physicians) will not allow them to abdicate their authority over the patient care process

What Tasks Do Operations

Managers Actually Perform?

• coming up with specific plans of action to meet goals.

• Each goal has a number of tasks associated with it.

• Tasks drive what pharmacy managers do on a day-to-day basis

• tasks will change depending on the circumstances of the day, and the ways to accomplish these tasks can change.

• tasks are what employees must complete to accomplish the command intent of the pharmacy.

• Action steps are clear, concise, and can be acted upon in a short period.

• Goal: Offering more services to patients.– Develop a customer survey to identify unmet needs.– Conduct a customer focus group with ten customers– Ask every employee to identify profitable opportunities.– Get all pharmacists immunization certified.– Create a layout plan for a new private counseling room.

knowledge worker

• Puts to work what he has learned in systematic education, that is, concepts, ideas, and theories, rather than the man who puts to work manual skill or muscle

• Cannot be productive unless he or she is allowed to figure out how they work best, and to modify their routine accordingly.

knowledge worker

production job knowledge worker job.

optimized to control every step of the process to produce identical products of consistent quality.

revolve around customer service.Different because the end product is different depending on the customer.

the employee must be empowered to figure out what the customerneeds, and then modify the process to deliver the correct product

knowledge worker

• Activities that pharmacists perform on a daily basis mimic a factory production line, there are critical distinctions

• Pharmacists do not just assemble prescriptions accurately; they are also responsible for knowing when prescriptions should not be filled, how

• medications should be appropriately used, and what to tell patients and their caregivers to help them get the most from their medications.

knowledge worker

• a pharmacist's professional license demands that they evaluate whether the prescription order is appropriate for the end-user and that they modify the order to achieve the intended outcome.

• They must use their professional knowledge to deliver, or refuse to deliver, the proper product to the correct patient

Principles of Human Sigma

• Six Sigma assumes that output quality improves by eliminating defects in the production of the product

• The primary approach to performance improvement is based on the model known as DMAIC

• 1. Define• 2. Measure• 3. Analyze• 4. Improve• 5. Control


• The intent of the Six Sigma approach is to create high quality, identical outputs from standardized inputs.

• Unlike a production line, consumers of services desire and need different outputs, and those desires and needs are framed by the circumstances of that specific encounter.

• For example, no two patient encounters are identical, even if they are getting the same medication for the same condition.


• The Human Sigma is based on the following fundamental principles

1. “Employee and customer experiences should be measured and managed under the same department. The employee–customer experience is directly linked, and to manage them separately would be inefficient

2.Feelings are facts”—Customers that passionately advocate for the company through word-of-mouth advertising are the backbone of any successful business.


3.Think globally, measure and act locally”—– Even if all locations have the same process

strategies, policies, regulations, and expectations, there will still be a significant variance between their outputs. This is primarily due to differences in the “who” factor.

– Engaging these people and giving them the command intent that they need will improve local performance


4.There is one number you need to know”—•one performance metric that strongly predicts the success and future organic growth of a company.•the Human Sigma metric, and it involves the levels of customer and employee engagement•The evidence has shown that when combined together, high levels of customer and employee engagement achieve synergy. •The sum of the two is greater than the parts.


5.“Managers should gather the correct data in order to efficiently evaluate their company's performance and set goals. •Improvement strategies should be custom•tailored to each department's (or individual's) level of engagement. •rewards and recognition should be designed to promote an increased sense of pride in employees' responsibilities and encourage improvement.


• The Human Sigma data helps explain why scripting employee and customer relations does not work well and has the potential to backfire

• Once an employee becomes accustomed to ignoring customer comments or behaviors because they don't conform to the steps in the script the employee is required to follow in a given situation, employees will be primed to ignore customers in all situations.


• The Human Sigma data suggests that to form long-lasting relationships with customers and make them value a company above its competitors, the company must go beyond simply trying to achieve customer satisfaction.

• Companies must try to engage their customers on a deeper level.

• Engaging customers on an emotional level is what will gain their trust and loyalty.


How could a pharmacy operations manager engage his or her pharmacy's customers at a deeper, emotional level?•recognizing that most customer engagement occurs at the level of their frontline employees• Employees that are also engaged directly with a company will want the company to succeed, and will more actively pursue tactics and directives to achieve mutual success. •they will have a more thorough understanding of a company's short- and long-term goals


• Human Sigma project defined four key dimensions of employee engagement

1. What do I get?

a. Do I know what is expected of me at work?

b. What materials and equipment do I get to use?

2. What do I give?

a. Do I get to do what I do best every day?

b. Have I received any recognition in the last week?

c. Does my supervisor care about me?

d. Do they encourage me to develop my skills?

3. Do I belong?

a. Do my opinions matter?

b. Do I agree with the mission or purpose of the company?

c. Are my coworkers committed to quality?

d. Does my best friend work with me?

4. How can we grow?a. Has my career progressed in the last 6 months?

b. Do I have opportunities to learn and grow?

Conclusions

• The primary role of operations managers in a pharmacy environment is to manage the human resources and tasks derived from the pharmacy's goals to produce quality customer service.

• This transformation of human resources and physical goods into a custom solution for each individual patient is what distinguishes pharmacy from most “production worker” styles of business

Conclusions

• Goals should be derived from the overarching vision of the pharmacy, and daily tasks are developed from these goals.

• Tasks should be clear, concise, and measurable. • Operations managers must prioritize tasks for

completion, realizing that not everything can simultaneously be accomplished and that circumstances may change the order in which tasks need to be approached

Conclusions

• Operations managers should communicate clear and unambiguous command intent to employees and allow them appropriate flexibility to best accomplish these specific tasks.

• Finally, the operations manager should understand that inspiring engaged employees is the key to creating engaged and loyal customers.

Conclusions

The daily work of the operations manager is to:•1. Get it done right•2. In a timely fashion•3. Consistent with the values of the organization•4. In a way that creates long-term value for all the stakeholders in the business

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