Category: operations management
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Supply Chain Woes Turns Out to be the Main Culprit of COVID-era Inflation
Inflation can occur when too much money chases too few goods and services, but it can also result from supply disruptions, rising production costs, or global economic shocks. It suggests that inflation can come from either the demand side (a surge in demand or money), or the supply side (a shortage of supply). So here…
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SOLAH: The 5 Functional Pillars of Every Business
I have always been pondering about how to convey the essence of a business. There are many aspects to a business, and it seems in business schools we tend to either say everything is important, or say a particular area is the most important. To me, that is the wrong idea. My sense is that…
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How the consulting world screwed up the ‘Lean’ Idea
The lean idea was started by Toyota in the war-torn Japan in the 1950s, almost by necessity. It turns to be very effective and helped Toyota grow and even dominate the world auto market towards the end of the 20th century. It also fundamental influenced the industrial world. Now almost all the large corporations are…
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An successful entrepreneur is a technician, manager and entrepreneur in one
A lot of people start their own businesses because they like doing a particular thing (baking, cooking, designing, selling), but very often they realize there are so many things beyond doing that one thing – like book keeping, sales and marketing, customer service – that they are quick overwhelmed. That is also the reason a…
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How do sustainable supply chains improve the continuity of supply and protect the environment?
Photo: Woods in Sherborn, MA, Summer 2023. Recently I was asked by my School’s PR people to reflect on a few questions regarding the relationship between business practices and sustainability. They asked some excellent questions, which prompted me to write something down. Below is the first part. The question is: How do sustainable supply chains…
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How large is the supply chain economy? The answer may surprise you
Recently I have been working on a book about the “supplychainification” of economies around the world – If you have never heard about the word “supplychainification”, no worry. I have not either. My collaborators and I invented it, and I will explain it in a separate article. In here, I answer a even simpler (but…
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So Ford Wants to Do Away with its Dealers…
According to the Detroit Free Press, Jim Farley, the current Ford CEO, said that he wants to sell its EVs online rather than through its dealerships. Apparently, he was upset at the markups added by many of its dealers on its ever-so-popular electric F-150 Lightning that offended many customers. For example, one of the dealers…
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A Fascinating Recount of the US Semiconductor History
I recently read a book titled “The Microchip Revolution: A Brief History” authored by Luc Oliver Bauer & E. Marshall Wilder. It has lots of interesting technical details as well as personal anecdotes. A wonderful read. I flipped to the chapter on Intel once I got my hands on the book, because it was the…
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A Small Innovation, A Big Saving for the Environment
Just a couple of days, I received my new iPhone shipped from Apple. What I was impressed with was not the phone – the phone was good by all means but it was the clever packaging that I was impressed with. You see, in order to create proper cushion for the items shipped in a…
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Zillow’s Failure in Housing Flipping is a Classic Example of Ignoring Bottlenecks and Variabilities
By now, we have all heard the story of Zillow losing more than $550 million doing house-flipping. Its CEO blamed it on its forecasting model that produced house-buying prices there were too high, saying that “We’ve determined the unpredictability in forecasting home prices far exceeds what we anticipated and continuing to scale Zillow Offers would…
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How to Revive the Semiconductor Manufacturing Industry in the US
Before we talk about the “How”, we need to first understand why we need to revive the semiconductor manufacturing in the US. First of all, it is the foundation of a modern digitized society. If we accept that our society is heading to a digital one where almost all things will depend on information technology,…
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Port of LA: Storage Space is the culprit?
Recently I read about the saga at the Port of LA. According to Ryan Petersen, the chief executive of logistics company Flexport, the real bottleneck at the Port of LA was actually storage space. The article reported: “In a full 3 hour loop through the port complex, passing every single terminal, we saw less than…
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Why Additive Manufacturing (or 3D Printing)?
[Header image credit: Wikipedia] I have been interested in 3D printing (the technical name should be “Additive Manufacturing”) for the last 10 years, but why can it be a real alternative to the traditional manufacturing, at least to some industries? Just from a pure physics perspective, AM can make products that other methods cannot. For…
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Why Supply Chain Delays are Multi-faceted: A Mathematical Explanations (Without the Heavy Math)
Paul Krugman recently penned an excellent article explaining why we see the supply chain snarls in New York Times. It mentioned a number of factors: The US consumers are buying a lot more stuff than before, as a partial substitutions to experiences because of the COVID; The processing capacities at docks and hubs have not…
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A great article on this thing called “supply chain shortage”
By now, people should have already heard many times the term “supply chain shortage” in various settings: semiconductor chips, ports, airfreights, toilet papers. But what does this term really mean? Which is why I found this article on the Atlantic very helpful: Americans Have No Idea What the Supply Chain Really Is Several highlights and…
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Simulation: Is demand equal to sales? (Part II, and why is there a Loch Ness Monster?)
In an earlier post, we discussed the difference between demand and sales using a simulation exercise. Now the question is: How can we visualize the difference? To start off, we all know the shape of the normal curve (in the example we discussed the mean is 600, and its standard deviation is 100): However, if…
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Elon Musk Gets Manufacturing
Why is large-scale manufacturing hard? This is one thing that many people do not quite grasp. And indeed it can be hard to explain, because there are a number of governing operations principles that are often in play at the same time. But when I read about what Elon Musk recently said about manufacturing, I…
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Carbon Foot printing: Devil is in its details…
I have been reading up on the carbon foot printing work lately. A lot of interesting findings. Overall, my impression is that the modern e-commerce is not significantly improving our carbon footprint. And with customers’ adaptive behavior (e.g., ordering more, not giving up store trips), it is likely that we can end up with a…
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The Dawn of the Modern Power Grid Started Right Here in Massachusetts (and It was Clean Energy!)
Electrification is indeed the single great achievement of our society. And yet, I was delighted to find out the modern power grid actually started in Massachusetts, a state I live currently. In the late 1800s, technologies started to converge to build an electrified society. In 1882, Edison’s direct current (DC) system was built in Manhattan.…
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Why is Chick-Fil-A Picking up Market Share (and Why is McDonalds Testing Robot Fryers and Voice-Activated Drive-Through)?
WSJ recently ran an interesting article (and video) on how and why McDonalads is testing using robots to cook and voice-recognition software to take orders at drive-through. The why is simple. To quote the article: “Both technologies are meant to shorten customer wait times that executives acknowledge have grown in recent years. McDonald’s also has…