Human Wisdom Will and Must Always Prevail

Operations has evolved far beyond factories and supply chains, yet its fundamental purpose remains unchanged: creating value by transforming resources into outcomes customers value. In this conversation with Rakshith S, Dr Ajith Kumar J, Professor of Production, Operations & Decision Sciences at XLRI, argues that while AI, analytics and automation are reshaping operations, technology must remain guided by human judgement. He also explains why resilience, continual learning and a strong operational mindset will define successful organisations and future leaders.

Operations today is no longer confined to factories or supply chains. From healthcare to digital platforms and consulting, operational thinking seems central to organisational success. How do you define the evolving role of operations in modern business?

I’ve always seen operations management as a central instrument of value creation in organisations. In my view, an organisation’s overall aim is to use inputs (raw materials) and resources (people, machines, knowledge, processes) to create outputs that its customers find value in and are willing to pay for. In simple words, I’d say an organisation exists to convert inputs to outputs using resources, and operations management is about identifying the tasks, processes and systems needed to do that, designing them, and then executing them. So I believe operational thinking is always at the core, and that’s where an organisation’s existence begins. Historically, even when other functions like marketing or corporate strategy were relatively nascent, I’d argue operations had to be mature enough to ensure the organisation’s survival, let alone its success.

What I’ve seen change over the past three decades, though, is not the centrality of operations thinking but our growing reliance on IT systems. This shift has come from the explosive growth of IT during this time, which has made new services possible that weren’t there before. So when e-commerce boomed in the early 2000s, I saw IT and the internet become the defining elements of operations. Similarly, when data analytics became increasingly commonplace after about 2010, I saw operational decisions start relying on it more and more. Today, I see AI playing an important role in operations too, just as it is in other functions. That’s where I see operations changing globally.

In an era of disruptions, whether geopolitical tensions, supply chain bottlenecks, or demand volatility, organisations are constantly balancing efficiency with resilience. How should firms rethink operational excellence today?

Yes, I think the balance of efficiency with resilience is essential since disruptions occur without warning and have become common. One reliable way to achieve this balance is to establish and maintain solid integration with one’s suppliers and customers using technology and develop strong partnerships with trust. When things are normal, this will help lower costs for all, while during disruptions, the understanding between supply chain members will foster the cooperation needed to return to normal quickly and bounce back.

Businesses are increasingly relying on AI, predictive analytics, and automation to optimise decision-making. In your view, where should organisations draw the line between algorithmic efficiency and managerial judgement?

I believe organisations must tightly embrace the understanding that technology and AI can never replace human judgement at the most fundamental levels. Owing to the fast rise of agentic AI, robotics and so on, I think human beings will no doubt be replaced in many roles. Yet, human thinking must guide the underlying discretion related to how AI and robotics are used. Managerial decision-making can take the aid of these but cannot be replaced by them, ever — and this is even more true at higher levels of leadership. Human wisdom will and must always prevail, and I don’t think it should be blinded by the flashiness of technology, however good that technology is.

For students from non-operations backgrounds joining the new batch, what steps would you suggest they take to build a strong foundation in this field?

My advice to them is to understand that much of operations is intuitive and common-sensical, or in other words, operations is essentially intuition and common sense with a structure.

Now, there is a basic level of numerical work involved in the study of the subject. But at the MBA level, it is not really ‘mathematics’ since one need not learn theorems, proofs, derivations and so on. What one needs to do, and which an XL student is very much capable of, is to visualise well and apply that visualisation to the problem at hand. Faculty members and fellow students are always available to discuss and help. The study of operations at XLRI will be an enjoyable experience if one keeps it simple and focused.

As sustainability and ESG considerations become integral to corporate strategy, how can operations leaders balance cost, speed, and scalability with the growing pressure for responsible and sustainable business practices?

My approach is to seek every opportunity to prevent harm to the world while conducting operations — whether that’s reducing carbon emissions, non-degradable waste, land, water and air pollution, or noise. I think policy framing and so on is important, but at a deeper level, what’s absolutely essential is a leader’s inner conviction — a conscience that makes them want to not harm the world. I also think it’s important for us to educate our students on the consequences of continued abuse of the external world by profit-making companies, and the harm it does to them too.

When companies pull off massive digital transformations, they usually obsess over the software. Based on your research, why do organisations so often underestimate the human learning curve during a major tech rollout?

I am not sure that they underestimate the human learning curve. In my understanding, many professional organisations today believe in human beings (their employees) as willing learners who can be trained to use the new technology. They keep that in mind when they invest. Of course, there will be resistance to learning and change, but good leaders figure out how to handle that. Then, there are considerations of speed, skill and so on, but these are also resolved by motivating employees in different ways to learn and grow.

A lot of operational wisdom is ‘tacit’, unwritten and picked up on the job. In today’s world of remote and hybrid work, how can leaders keep this informal human wisdom from getting lost in digital silos?

I believe all wisdom essentially develops through practice and experience and cannot be formally taught. As remote and hybrid work increase, and as our engagement with AI increases owing to this relentless technology revolution, I think certain types of wisdom may become obsolete, but new and relevant wisdom will develop. When new forms of work become the norm and people gain exposure and experience in them over time, they will naturally develop the appropriate wisdom required to sustain and grow with such work. Of course, it’s important for us to remember and remind each other that human wisdom cannot be superseded by technology, and that it is always more fundamental.

When we look at future tech like autonomous vehicles or automated warehouses, the media focuses on the engineering. From a management perspective, what are the hidden behavioural or structural barriers companies overlook?

From a management perspective, one major barrier is resistance to learning, which managers must not overlook. As this kind of technology is adopted, companies must thoughtfully arrange for appropriate training, motivation and mentoring so employees can learn quickly, adapt and enjoy their work.

For graduating MBA students stepping into the corporate world, what is the biggest mindset shift required to transition from absorbing knowledge to actively building a ‘learning environment’ for their teams?

I suggest that students moving from XL to the world of praxis contemplate this: we learnt plenty of concepts, theories, frameworks, methods and tools in this programme, but our best learning is not these. Our best learning is how to think clearly and comprehensively through problems without making hasty conclusions. Or, in other words, the most valuable takeaway from this programme is how to learn continually. The learning mindset.

A person with a matured learning mindset will remain open to possibilities, listen to others patiently, observe others, set the ego aside and be willing to change readily for the larger benefit of their organisation. I will be happy to see my students enter industry with this mindset. This mindset is infectious, and when others sense it in their colleagues, they are likely to appreciate it and be inspired by it. That in turn will naturally create a learning environment in the team, and over time, in the organisation as well.