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Operations Management
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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.
5 Describe the essential operations
management tasks.
6 Illuminate differences between a
production worker and a
knowledge worker.
7 Describe Human Sigma as a
model for customer service
operations
• 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: 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.
• 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.
• 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.
• 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 marketbased economy pharmacies must be able to
generate a profit large enough to justify an
owner's investment in the organization.
• 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.
• 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.
• 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?
Designing goods
and 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?
Scheduling
When and where should each employee be when our
customers need
service?
Supply chain
management
Which suppliers will best help the company meet the needs of
our customers?
Inventory
management
How does the business insure that it will have enough without
having too
much or too little inventory?
Maintenance
How can the business keep all the equipment and facilities in
good working
order?
• 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 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.
• 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
• 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..
• 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
• 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.
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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.
• 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.
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 customer
needs, and then modify the process
to deliver the correct product
• 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.
• 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
• 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?
• 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
• 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
• 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.
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