What is Operations Research?

What is Operations Research?

It is an interdisciplinary science combining mathematical models, statistical analysis, and algorithmic methods to make optimal decisions in complex situations. The term comes from English and means "operations research." In Germany, the discipline is known as "Unternehmensforschung" (business research). OR improves decisions, optimizes processes, and uses resources efficiently. It is one of the oldest AI methods and forms the basis of all INFORM software products. Thanks to OR, these products can meaningfully correlate a wide variety of factors, constraints, and priorities to calculate holistic solutions that serve the overall optimum of business processes.

Background and context

The origins of OR date back to World War II. It was developed to make military operations more efficient using scientific methods. Teams of mathematicians, physicists, and engineers analyzed logistical processes to improve deployment plans and resource allocation. After the war, businesses also recognized the potential of this methodology. Since then, OR has become an essential tool for planning and decision-making.

Since the 1960s, INFORM has been a pioneer in developing and applying OR methods to business practices. It was one of the first companies to apply OR methods to industrial processes. These methods are now considered among the oldest existing AI methods. Even before terms such as artificial intelligence and machine learning were commonplace, INFORM had already developed intelligent algorithms that provide concrete recommendations for complex decision-making situations.

How does operations research work?

The process can be divided into four central steps:

1. Modeling: First, the real problem is described mathematically. Decision variables are defined (e.g., "When should which order be produced on which machine?"), and framework conditions are considered (e.g., capacities, delivery dates, and resource conflicts). These are transferred to a model in the form of equations or inequalities.
2. Solution with Algorithms: A mathematical algorithm analyzes the solution space and searches for the optimal decision. Depending on the objective, the target function is maximized or minimized — for example, profit, adherence to delivery dates, or resource utilization.
3. Implementation in software: The developed models and solution methods are translated into powerful software. This software can calculate millions of decision variants in seconds and provide users with the best possible recommendations.
4. Monitoring and adjustment: The models are regularly monitored and adjusted as soon as the framework conditions, data, or objectives change. This ensures that the solution always remains optimal.

For instance, even with just ten production orders, there are over 3.6 million possible processing sequences. In industrial practice, it would be impossible for humans to manually compare the multitude of possibilities with hundreds of thousands of tasks. OR algorithms, on the other hand, provide an efficient and feasible recommendation in seconds.

Operations Research at INFORM

OR is an integral part of every INFORM solution. It helps companies in many industries answer complex questions. Operational workflows and processes are full of these questions, whether in manufacturing, retail, airports, ports, logistics, banking, or insurance. For example, how long should an aircraft departure be delayed to allow passengers from a delayed flight to board? Should a last-minute offer for a large delivery of goods be accepted? Can I promise a customer an earlier delivery date during contract negotiations? Where should a container be stored temporarily before onward shipment? Is a financial transaction legal, or is it fraudulent?

The range of applications is wide:

• Airport Logistics: Punctual Takeoffs Despite Delays: Every day, thousands of flights must be coordinated worldwide. INFORM helps airports optimize the use of resources, such as gates and baggage carousels, to ensure timely handling. The software analyzes all relevant data in real time and calculates the optimal sequence for performing tasks.
• Automotive Industry: Production logistics for millions of vehicles: INFORM helps automobile manufacturers coordinate hundreds of thousands of transports within their plants every day. Vehicles, components, and materials must be in the right place at the right time. Mathematical models consider assembly times, transport routes, capacities, and bottlenecks to suggest the most efficient logistics planning in real time. Without this technology, the smooth production and delivery of new vehicles would be virtually impossible.
• Finance: Real-time fraud prevention: INFORM analyzes over 250 million financial transactions daily. The goal is to detect unusual payment patterns and prevent fraudulent transactions before any damage occurs. These systems use sophisticated algorithms that are continuously reviewed and optimized. INFORM distinguishes between normal and unusual transactions without disrupting regular payments.
• Food and retail: Securing supply chains: Supermarkets need daily supplies. INFORM software supports food scheduling by integrating inventory levels, consumption forecasts, and holidays into the planning process. OR ensures that the right amount of products are on the shelf at the right time — not too little and not too much.
• Production Planning in Mechanical Engineering: Controlling Complex Assembly Processes: When building machines with several thousand components, all parts must be available in the correct order at the correct time. INFORM uses OR to create assembly plans, ensure material availability, and meet deadlines. The system identifies bottlenecks early on and takes countermeasures in a timely manner.

FAQ About Operations Research

How is operations research different from traditional management consulting?

Operations research is based on mathematical models and algorithmic optimization. Unlike traditional consulting, which often relies on experience and heuristics, operations research (OR) provides data-based, quantitatively verifiable recommendations for action. These solutions are reproducible and objective and can be automated using intelligent software.

Do I need special prior knowledge to work with OR software?

No. INFORM's software solutions are designed so that users do not need any special mathematical knowledge. The systems work in the background, analyzing data and suggesting optimal decisions. Planners can review these recommendations and override them if necessary.

In which industries is operations research particularly useful?

Operations research is useful wherever many complex decisions must be made simultaneously. Typical areas of application include logistics, production, finance, trade, aviation, and the public sector. INFORM has developed specialized solutions for many of these industries that are used worldwide every day.

Conclusion

Decision variables are things that can be adjusted, while framework conditions are restrictions. Operations research is about making the most of these restrictions! Those who use OR base their decisions on sound foundations and manage complexity. This is why OR is at the heart of every INFORM software solution. Our systems don't just optimize processes — they empower sustainable, intelligent, and profitable actions.