Operations

Succinct and Timeless Business Advice

A few weeks ago I got some timeless advice from a guest speaker in my TOC program, an on-campus forum for MBA students to interact with classmates and seasoned executives to better manage one’s business and career.  The guest speaker, who requested no attribution for this post, gave me and my classmates the below advice.  This is one of the best, succinct, lists of management principles I have come across, so I thought it would be nice to share it here for a broader audience.  The italics are my own notes.

Lessons Learned Along the Way

The three critical elements of a company are: Market, Management and Money.  You need all three for a good business.  Never forget, growing companies need money.  Growth is affected by external financing needs, margin, ROE, etc.

The Market

  • Know now your company’s value proposition (i.e. why customers should do business with you). (more…)

Operations: The Bullwhip Effect

Ever wonder why the semiconductor industry is cyclical?  I did.  Apparently the answer lies in a concept called the “Bullwhip Effect”, which is the notion that the standard deviation of demand is amplified up the supply chain.  In other words, if consumer demand has a standard deviation of 10, wholesaler demand standard deviation may be ~20, and manufacturer demand standard deviation may be ~30.  Below is a brief summary of the causes of the Bullwhip Effect and a few solutions to mitigate it.

Causes:

  • Order Synchronization – if many customers sync their ordering timing, volatility of supply chain increases (more…)