Archive for June 11th, 2011

Operations Management

How many people should be answering the phone at an American Express call center on Friday night? How many people should be working the Apple Genius Bar in downtown San Francisco on a Saturday afternoon in July?  And how many lines should be open at any given time in Whole Foods in Manhattan on Sunday night when everyone is grocery shopping for the week? All tough questions, right? Well, while I can’t tell you the actual answer to any of these questions, I can tell you that these are all things we thought about during my Kellogg Operations Management class this past quarter.

Just two days ago, I finished my last core course at Kellogg. While on one hand it was it a sigh of relief to be done with my core class, on the other hand it was also a bit sad, as many of the core courses (and professors) have also been good. This is definitely true of my Operations Management course taught by Professor Shin.

Now I know what you’re thinking! How can Operations be one of the most interesting classes? After all, at Kellogg, most people leave business school to work in Marketing, Finance, or Strategy; not operations. Further, if you had Professor Hennesey for Marketing, and Professor Mazzeo for Strategy you probably have a pretty high bar for the intro Operations class in the spring.

Fine. On the surface good question. But one thing I’ve learned at Kellogg is that there are a lot of great parts of the experience that you might not have thought about until you were exposed to them. For example, there are a lot of great jobs out there that many of us didn’t think about before getting more exposure to them at Kellogg. And likewise, there are also lots of great classes and professors that may not be at the top of the bid list.

Far too often at business school, we get caught up in the flare of certain things. Certain classes. Certain majors. People flock in large numbers to the strategy courses. They bid enormously high for to best marketing classes. And they organize their schedules to that they can fit many of the finances classes into their schedules.

But there are definitely concrete examples that perhaps this isn’t always the best strategy. That other functions, specifically operations, in some cases might be even more important to business success.

But don’t take it from me. Take it from some of the best companies on the planet that focus on having impeccable operations systems.

Apple maintains a world-class operations department to execute on its innovation strategy. For example the company’s introduction of iPhone and other new products show us why inventory management and quality management are important, especially during new product introductions.

Dell also spends a lot of resources managing its inventory. Dell was one of the first companies to keep its inventory at minimal levels and instead use the mass customization strategy to suit the needs of the mass market. That is, they pool as many resources together as they can, and then they wait to put your computer together until after you’ve order your model.

Walmart Mart maintains a world-class supply chain system. And so at every second of the day, the company knows exactly what its inventory levels are, not only inside thousands of different stores but also for thousands of different products inside those stores. Using this just-in-time distribution system, this ensures that the company has the right amount of inventory so that every customer can come and buy what they want.

Toyota is also known for its world-class production system and is often credited with having started the just in time production process.   And because of it, the company  has a great process that not only works faster than other companies, but also produces higher quality vehicles with less mistakes in the process.

Together these companies do things like managing their supply chain and inventory. The optimize throughput and flow time. They calculate things like reorder point (ROP) and service levels (SL). And they pay close attention not only to their specification limits (customer limits) but also to control limits (process limits).  And these are also some of the things we did in the class.

Don’t get me wrong. I’m not saying that everyone should work in operations. Likewise, I am also not suggesting that Operations will be everyone’s favorite class. Like any other course, it had its ups and downs. And it was also very much a math-heavy class, which surprised us all.

But in many ways Operations was also a really good class. It combined being interesting while also being useful. It was a mix of the qualitative and quantitative. We got to talk about many of the top companies in the world today. And in my case, I just so happened to have a professor that I liked a lot.

Hopefully I’ll be able to take a couple of interesting classes at Kellogg next year, once I head back down to the law school.

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Jeremy C Wilson is a JD-MBA alumni using his site to share information on education, the social enterprise revolution, entrepreneurship, and doing things differently. Feel free to send along questions or comments as you read.


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The contents of this blog are mine personally and do not reflect the views or position of Kellogg, Northwestern Law, the JD-MBA program, or any firm that I work for. I only offer my own perspective on all issues.
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