Here are my takeaways from MBA Operations Management class:
Tangible ways to get systems running efficiently.
Generalizable to ~most settings.
Here's part I :
Five takeaways :
A system's capacity is constrained by its weakest component: A single pinch-point can reduce vital throughput.
When inputs arrive faster than processing speeds, buildups accumulate. Wait times increase. Performance suffers.
By alleviating the constraint - or redesigning the system - its impact can be reduced.
Some things are predictable. Others are more random.
In any case, assume that things will go astray.
"Everybody has a plan until they get punched in the mouth".
But a resilient system can help you land on your feet.
- For predictable variability: Forecast. Test and learn.
- For unpredictable variability: Learn from systems that flourish under stress. Nature is full of adaptive systems. Some insights can be extended to organizations.
In services businesses, utilization (X axis) and wait time (Y) have a non-linear relationship. When employees are busy / distracted, logjams can occur, quickly.
What this means =
Don't run things at max capacity.
The inverse is also true: By adding a bit of margin back into the system, you can quickly relieve pressure. Some breathing room can make a huge difference.
Slack capacity absorbs shocks upstream.
- Go slow and be patient: Humans and machines need downtime.
- Rest. There's value in trading some short-term output for long-term resilience.
Why do people hoard toilet paper? Why do stocks jump 500% overnight? What makes soccer goalies dive on penalty kicks, instead of staying centered?
Humans are emotional creatures.
We extrapolate meaning from noise.
We react, instinctively.
These tendencies get us into trouble (myself included).
- Distinguish signal from noise: Slight over/under-estimations can create huge inefficiencies. There's a whole field that studies these effects.
- For more on this, read about the Beer Game.
Operations Management people like to use a lot of quant models and math.
But no formula can tell you how to create a meaningful, authentic experience. The human tradeoffs are as much art as science.
Beyond the heady jargon, my takeaways =
- Have a clear, motivating mission. And core values (real ones).
- For common, predictable stuff: Create systems that enable easy decisions with minimal effort. Remove hindrances.
- For everything else: Empower people to use good judgment.
Easier said than done.
What are your Operations insights?