OODA Loop in Production and Operations Management

Although it was initially designed to help war-fighting fighter pilots overcome the limitations of incomplete data, the OODA loop has since become a widely used decision-making tool in other fields (Coolfire Blog, 2019). To get an advantage over an opponent, one must react rapidly when things change, which is the OODA loop’s principle. OODA’s original objective was to aid in rapid decision-making, disrupting an adversary’s decision-making process. Head-to-head competitions can be won with this strategy. As in air warfare, the OODA loop can be used for production and operations management. No data is ever exact or comprehensive in either of these settings. However, people can adjust their course of action when more information becomes available because OODA is an infinite cycle. The four main parts of the cycle are: observing, orienting, deciding, and acting (Rodriguez, 2020). Faster decision-making from applying the OODA loop provides a business a leg up in a competitive market with small profit margins and increased efficiency in its operations. As a result of the increased efficiency and capacity, decreased operational expenses increase company competitiveness, and profits are gained.

The Four Steps of the OODA Loop

The OODA loop is a decision-making mechanism that corporate managers use to make better decisions. In today’s technology landscape, the principle seems more pertinent than ever. Turning data into valuable insights requires more rigorous, reproducible, and process-oriented decision-making processes as IoT and connected digital assets add to the rising vault of valuable data (Coolfire Blog, 2019). The OODA loop is ideal in the current production processes. Clear objectives and varied contexts can interpret critical information in an OODA loop. With real-time data, it is feasible to detect systemic inefficiencies, devise effective strategies, and deliver targeted remedies on a more competitive schedule by following each stage of the OODA loop.

Observe

Company managers attempt to glean as much information as possible during the data-collection phase. They accumulate data on the organization’s current production and operations processes (Coolfire Blog, 2019). Sensors are installed in this phase to collect data from the machinery during production processes. Automated data collection takes place without the intervention of a human operator. This ensures that the data is clear and precise. Monitoring dashboards display real-time data in an understandable, graphical, and numerical style so that the user may quickly identify the problematic work centers or specific machines on the shop floor. This gives an overall picture of the battlefield.

Orient

The data is crunched during orientation, and insights are gleaned from raw data. Analyzing, evaluating, and prioritizing data are part of the process (Enck, 2012). Threats, opportunities, rivals, and partners are all weighed and assessed in the context of the current scenario. Analytical tools in a manufacturing company transform raw data into a wide range of metrics. A few examples of these metrics are the time the machine took to start the first job, the time it took the machine to run its entire cycle of on-time, operating-time, idle-time, and energy consumption, as well as metrics for tool and pallet changes, and conveyor system speeds (Coolfire Blog, 2019). In this step, revenue and financial gains, the composition of profit, expected total income, actual and planned machine usage, the value of used, and wasted energy are figured out. A clear picture of where money is made and lost becomes apparent to the managers.

Decide

A company’s decision-makers can make the proper judgment after analyzing raw data. There are several alternatives to choose from in this part of the procedure. First, the orientation phase informs each decision. Managers simulate numerous situations in the plant, such as removing and adding machines, modifying the duration of working hours, and optimizing machine use and productivity (Rodriguez, 2020). From the simulations, they will see how the modifications will affect production capacity, revenue, and profitability. Finally, managers determine the best course of action based on the currently defined variables.

Action

Making judgments, implementing, and assessing if the results are what was expected is part of this process. As a result of the nature of the OODA loop, taking action is never the final step. All of the information gleaned from the previous cycle of the OODA loop gets repurposed for use in the following (Rodriguez, 2020). From the earlier cycles, future iterations become more precise and quicker.

Detailed OODA loop

Operational efficiency can be improved by using this approach. Success is measured by the organization’s ability to reduce its loop, expedite reactivity and apply the new decisions more rapidly to the organization (Coolfire Blog, 2019). To keep pace with today’s fast-paced business environment, the OODA loop condenses lengthy studies into a decision-making structure that is more suitable for today’s world (Enck, 2012). Corporate leaders are encouraged to identify problems as soon as they arise to allocate available resources appropriately. Then, a strategy for dealing with those problems is devised, and the decision is implemented before the competition acts.

Organizational success can be measured via the OODA loop, and high-level strategy optimization can be achieved through its use. Faster OODA loops indicate that an organization is doing well (Vettorello, Eisenbart, & Ranscombe, 2019). As a result, fast data input, analysis, and decision-making will be possible for these businesses. Unfortunately, there will be extended OODA loops and bottlenecked decision cycles in low-performing organizations; this will cause the companies to mature slowly while also reducing their performance. Therefore, every company should strive to increase the speed and efficiency of its OODA loop.

Key Attributes for a Successful OODA loop

The loop’s success is dependent on the team and individual members having certain qualities. This allows management to control the pace better and gain access to their opponent’s OODA loop, ensuring the business’s profitability. The traits are mutual trust, intuitive skill, and focus (Taylor, 2017). Teams can focus on an outcome, find innovative ways to get the task done through intuitive skills and rely on each other to succeed through mutual trust.

Mutual Trust

Teams can only use the OODA loop to their full potential if they have developed a mutual trust based on shared values and years of experience working on complex problems together. Mutual trust teaches managers that micromanagement is unnecessary (Taylor, 2017). Even if people make mistakes, they must be allowed to take responsibility for their actions. Management can then put their faith in their employees’ abilities and judgment because of the mutual trust that exists between them. OODA loop cycles can be completed considerably more quickly when working with people who have a trusting relationship.

Intuitive Skill

A person who has gained domain mastery and has developed an intuitive sense of how things work might bypass the orientation stage of the OODA loop, which John Boyd, a military strategist, considered the most critical step in the process (Taylor, 2017). The best product managers can sense where the product should go. When up against a larger opponent, having a firm grasp of what to accomplish is critical. If teams can rely on each other to conduct plans based on intuitive judgments, they will maintain the momentum and exert pressure on even the most significant competitors.

Focus

A clear objective and emphasis on that above any particular method helps subordinates in organizations judge what actions to take in an unpredictable environment. Operations management should determine a focus point and then adjust the means necessary to get there instead of insisting on a step-by-step plan (Taylor, 2017). Managers should let their staff make decisions based on their own experience and expertise rather than imposing tight rules.

Conclusion

As the world speeds up, there is no need for more management decision-making formulas. Instead, managers must develop the ability to adjust decisions depending on the changing reality and turn uncertainties into opportunities and ambiguity into advantages. OODA is a learning and adaptation paradigm for individuals and organizations that can help with this. When adopting the OODA loop, a manager looks at the unfolding issue, decides on the appropriate course of action based on that observation, and then takes action to seize control (Vettorello, Eisenbart, & Ranscombe, 2019). Continuous feedback from various data points is essential to improve the process continually. In addition, the efficiency of the loop is greatly enhanced by mutual trust, intuitive skill, and the focus of teams and individuals in organizations.

References

Coolfire Blog. (2019). The OODA loop explained. https://www.coolfiresolutions.com/blog/ooda-loop-explained

Enck, R. E. (2012). The OODA loop. Home Health Care Management & Practice, 24(3), 123–124.

Rodriguez, A. (2020). The rise of continuous intelligence. https://analyticsandinnovation.com/2020/05/14/the-rise-of-continuous-intelligence/

Taylor Pearson. (2017). The ultimate guide to the OODA loop. https://taylorpearson.me/ooda-loop/

Vettorello, M., Eisenbart, B., & Ranscombe, C. (2019). Toward better design-related decision making: A proposal of an advanced OODA Loop. Proceedings of the … International Conference on Engineering Design, 1(1), 2387–2396.