How OR improves decision making

1
EVOLVE
GREATER MANCHESTER
Friday 13th June, 2014
How Operational Research can
improve your organisation’s decision
making
Graham Rand
Jane Parkin
Felicity McLeister
For more information
Email felicity.mcleister@theorsociety.com
An obvious question–
what is Operational Research?
• Sometimes known as Management Science,
OR/MS or MS/OR
• Called Operations Research in some countries
• "OR is the application of objective methods to
complex problems arising in the direction and
management of large systems of people and
resources faced by industry, the public sector and
other organisations."
• "The purpose of OR is to enable managers to
make more effective decisions."
How does O.R. help managers
make better decisions?
By using techniques such as problem structuring methods
and mathematical modelling to analyse complex
situations, operational research gives those who run
organisations the power to make more effective decisions
and build more productive systems based on:
• More complete data
• Consideration of all available options
• Careful predictions of outcomes and estimates of risk
• The latest decision tools and techniques
What types of problem?
• Decision to be made
• Choices of action
• Significant effect
o not worthwhile for trivial decisions
• Suitable client
o willing to consider recommendations
o able to carry them out
Strategic "one‐off" decisions
Examples
• Warehouse layouts
o where should my products go?
o aim – minimum work
• Relocating offices
o to where should we move?
o aim ‐ minimum cost, minimum travelling time for
staff
• Characteristics
o important to get right!
o costly to reverse
• Output – recommendations

2
“Tactical" not strategic decisions
Examples
• Inventory management
o what to buy, how often, where to put it, etc.
• Allocating grants
o how to design the scorecard
• Characteristics
o about processes ‐ not one‐off decisions
• Output
o probably recommendations
o possibly also a computer system for future situations
Extremely detailed issues
Examples
• University timetabling
o what is taught when, where, by whom to whom
o aim – high quality of education
• Organising appointments
o matching providers and clients, at specific times
o aims – good match, minimum wasted time
• Characteristics
o best possible solution not vital ‐ good enough will do
o not clear what "best" means anyway
• Output – computer systems
o for use by technical person – maybe the developer
Providing good information
Examples
• Keeping track of performance
o collecting measurements and using them to
highlight changes
• Forecasting market share for a new service provision
o maybe after 6, 12, 24 months
• Characteristics
o not recommending action but providing a system
o an aid to future decisions
• Output
o a computer system for client's use
So what does an OR problem‐solving
approach consist of?
• Problem structuring, formulation
o always
• Data gathering/analysis
o sometimes
• Helping managers to understand
o this may be all that's required
• Producing computer systems
o quite often
• Most OR involves MODELLING
o quantitative or qualitative
Models: thinking through consequences,
"reflection before action"
OK to "suck it & see"
for simple issues.
Rather disastrous for
complex issues and
designs
Alternatives to modelling
• Do nothing
• Seat of the pants (intuition)
• Experiment on the real system
o Cost
o Time
o Danger

3
Hard or Soft OR ?
• Soft OR ‐ qualitative, subjective
o less prescriptive, more descriptive
o help stakeholders see the issues more clearly
o facilitation rather than recommendation
o usually the start of any project
• Hard OR ‐ quantitative, objective
o measure what you can
o may have to ignore what you can't
o make specific recommendations
• Many projects combine the two approaches
O.R for the Third Sector
Some of the problems third sector organisations are faced with:
• ‘We have lots of different options for the future but it’s
impossible to decide which to choose in such uncertain
times.’
• ‘We’re under huge pressure to do more with less, and we
don’t know how we’re going to do it.’
• ‘It’s hard to stay objective when we’re faced with such
emotionally charged decisions.’
• ‘We know we’re doing a good job – but how can we prove
it?’
We felt that O.R. could help and set up Pro Bono O.R.
Pro Bono O.R.
• Set up as a service to third sector organisations by
The OR Society
o ‘provides some of the head to your
organisation’s heart’
• Some organisations we have helped:
Some comments from clients
• “We’ve benefited hugely from your work and support in all
areas of the project, and from an organisational perspective
you’ve enabled us to take a highly professional approach to
increasing the efficiency of our charity”
• ‘The work is already supporting our planning and development
for next year and allowing us to focus our thoughts and
decisions on the places of most importance for our
organisation’
• “Resource planning has been a stumbling block for years. As a
new CEO I know how important it is to motivate staff and a
key part of that was re‐thinking how we plan our services.”
Example 1: Crimestoppers
Help police solve and prevent crime
In 2011/12:
• Received 95,276 calls and online forms
o with useful information
• Resulted in:
o 8,097 criminals arrested and charged
o £22,340,328 worth of illegal drugs seized
o £7,723,373 worth of stolen goods recovered
Expecting 60% increase in business but no more funds
available for staffing call centre
Simulation Model using current shifts
Target: 90% of
calls to be
answered in 20
seconds

4
Modelling alternative shift patterns
Results for an average week
Alternatives modelled
1
CS initial proposal ‐ longer shifts
2
as 1 with some part time weekend shifts
added
3
as 2 with amendments to weekend shifts
4
as 3 but extending one shift
5
as 4 but changing start times for early
shifts
Implementation
New shift patterns introduced Jan 2013
January performance compared to 2012 average
• Service levels increased
o From 90% to 94%
• Abandoned calls decreased
o From 12% to 6%
• Average time to answer call decreased
o From 28 secs to 13 secs
“We are grinning like Cheshire cats and I wanted to
share the good feeling with you both. Thank you for
all your efforts – I feel now it really was worth it.”
(Performance Manager)
Example 2: Reach
The client:
Reach: an organisation matching skilled volunteers to charities that need
them
The problem:
to improve the efficiency and effectiveness of matching processes, free up
resource, develop more value adding activities
The approach: we
• interviewed staff
• facilitated focus groups of matching staff and IT support
• work shadowed a ‘matcher’ and the Foundation Services Co‐ordinator
• discussed potential  measures of impact with Research and Business
Analysis Manager
• examined available documentation, collated and distilled the
information
• discussed issues  identified with  a process improvement expert
The Solution
• Identified short term efficiency
improvements
• Recommended additional value
adding activities
• Identified ways of measuring impact
• Recommended a roadmap for
moving to a new service delivery model
The benefits
• A new perspective on processes,
helping develop, challenge and validate
internal thinking
• Skilled staff  freed up to deliver more
value
• Reach services better targeted and marketed,
through improved impact measurement
What happens next?
• Expression of interest.
• Registration form.
• Speak with O.R. specialist to discuss if there is a
potential project.
• Project scope sent to volunteers.
• Organisation selects volunteer.
• Project proposal drawn up.
• Project commences.
• Feedback sought.
Webpage:
www.theorsociety.com/Pages/Probono/Probono.aspx
Blog: http://probonoOR.blogspot.co.uk/
@FMcLeister
Felicity McLeister
I look forward to hearing from you.

How OR improves decision making

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