Week 7 was the last week of Quarter 1 so both you and me have gotten one-eighth of a business school education. Congratulations! Pat yourself on the back. Now, are you ready for exams? It won’t be too hard – just four or five hours of intense, brain-melting thought for five days straight. And we’ll resume class promptly on Monday.
You laugh? That’s the hell I’m living right now.
But moving on to what I learned this past week:
Inventory is a bitch. I heart Operations class partly because it makes me look at the entire world – not just a factory floor – in a different way. In my normal, everyday life, I’d assume that having lots of inventory was a good thing. It means you’re cranking out lots of products to sell. You’re busy and productive. What’s bad about that?
But inventory is a sneaky you-know-what and having too much of it lying around can really hurt how fast you get your product out there. Imagine you’re a chef and you’re making lasagna in a restaurant. You need 10 lasagnas to feed your customers every night. You could make all 10 at once, laying out all the noodles, then adding all the sauce, then adding all the cheese … you get the idea. By the time you finish prepping 10 lasagnas, you probably could have finished one and shipped out some pasta to your hungry customers. In this case, having less lasagnas-in-process would have worked better.
The same is true in a factory. It’s why Dell doesn’t start building your computer until you order it. They don’t want that excess inventory lying around, clogging up their system.
Credos can be cool. Normally I’m a little skeptical of mission statements. It’s the journalist in me – sure, a company can say they’re all about doing the right thing, but does that really mean anything? After all, Enron’s mission statement was “Respect, integrity, communication and excellence.” Yeah, integrity.
So I surprised myself this week by tearing up as I watched a video about Johnson & Johnson’s credo.(See it here.) Am I losing my cynical edge? Maybe. Or maybe this one is a little different. It’s a credo that basically says the company will put patients, doctors and even its own employees ahead of stockholders.
Shocking, right? Employees ahead of shareholders? Anyone ahead of shareholders?
Even more shocking – when J&J came to visit campus, its employees were able to give us examples of people actually using the credo to make business decisions.
Coming from an industry endowed with a higher purpose — the mission of protecting democracy — this resonated with me.
Plus the video was really nice.
It’s great to put “trillion” on your resume. As a journalist, I’ve struggled to find quantifiable, hard numbers to put on my resume, numbers that show the kind of impact I had at work. It’s tough. I know I had an impact but I can’t measure it in dollars, growth stats or widgets produced.
So I was psyched when my colleague MBARenee suggested I look up a little number. I covered the Florida property insurance industry for a time – how big was that market anyway?
I couldn’t remember, so I asked the current insurance reporter at my old paper.
Two trillion dollars.
Boy howdy! Now that’s a good number for the resume.
Never assume the people in the cases are stupid. Quote from a classmate this week: “I just had to assume, in order to analyze this, that the people in this case were stupid.”
Our cases almost always come from real life, from real corporations where real people with a lot more real experience than us first-quarter MBAs are making real decisions about real money.
And, as several folks were quick to point out, these people in the case were likely doing it this way for a reason. And the biggest mistake a new MBA can make in any situation is walking in, assuming she knows better and not finding out the how and why behind the processes that are already in place. One guy in our class told the story of an MBA who did just that – and ended up starting a fire on the factory floor.
It’s easy for us to forget some times, sitting in class and analyzing numbers in our Excel spreadsheets, that this stuff is very real and very difficult. It carries real consequences. And smarter people than us have pondered it long before we arrived on the scene.
New rule of thumb: “Assume equal intelligence – until proven otherwise.”