Operations and Supply Chain Management
Operations is about flow, capacity and variability. Master Little's Law (work-in-process equals throughput multiplied by flow time), bottleneck analysis and the theory of constraints: system output is set by the constraint, so maximizing utilization everywhere else only builds inventory. Understand push versus pull, lean and just-in-time as waste elimination rather than simply zero inventory, Six Sigma and DMAIC, and the cost of quality (prevention, appraisal, internal failure, external failure - failure costs usually dominate). On inventory, distinguish cycle stock from safety stock held against demand and lead-time variability, know the EOQ trade-off between ordering and holding costs, ABC classification, and the bullwhip effect driven by forecast-based ordering, batch ordering and promotions. Cover forecasting (moving average versus exponential smoothing), sales and operations planning, capacity strategies (lead, lag, match), and postponement for mass customisation.
Traps: chasing 100% utilization at every workstation; confusing safety stock with cycle stock; thinking EOQ minimizes ordering cost rather than total relevant cost; treating lean as no buffers at all; using lead time and cycle time interchangeably.
Worked example: if 50 units per hour enter a process and each spends 2 hours inside, WIP is 100 units. If the bottleneck can only process 45 per hour, the queue grows without limit - the fix is capacity, not effort.