# Operations Management Running Summary **Course**: 15.778 Introduction to Operations Management **Instructor**: Prof. Vivek Farias **Term**: Summer 2025 --- ## 🎯 Core Framework: The Two Bubbles ### Product (Customer Perspective) - **What problem do you solve?** (Added Value) - **Why come to you?** (Strategic Value Positioning) ### Capabilities (Enterprise Resources) - Financial resources - Management structure - Technology (R&D, IT) - HR resources - Sales & Marketing channels - Supply chain - Distribution ### Value Dimensions (TQFP) - **Time**: Speed of service/delivery - **Quality**: Consistency, freshness, standardization - **Flexibility**: Customization options - **Price**: Affordability and value proposition --- ## 📊 Session Progress Tracker | Session | Topic | Core Concept | Product-Capability Link | Key Insight | Questions | |---------|-------|--------------|------------------------|-------------|-----------| | ✅ 1 | 🍔 Fast Food | Process Trade-offs | MTS vs MTO affects time-flexibility balance | 7 seconds = 3% market share | Why low utilization (40-79%) but slow service? | | ⏳ 2 | ✈️ Airline Deicing | Capacity & Variability | | | | | ⏳ 3 | 🚗 Uber | Dynamic Capacity | | | | | ⏳ 4 | 🏥 Healthcare | Process & Queuing | | | | | ⏳ 5 | 📚 Inventory Theory | Control Fundamentals | | | | | ⏳ 6 | 👗 Zara | Responsiveness | | | | | ⏳ 7 | 🌐 Multi-location | Inventory Pooling | | | | | ⏳ 8 | 📰 Yedioth | Newsvendor Model | | | | | ⏳ 9-10 | 📦 Amazon | Network Design | | | | | ⏳ 11 | 📱 Nokia | Supply Risk | | | | | ⏳ 12 | ✈️ Airlines | Revenue Management | | | | | ⏳ 13 | 🏭 Littlefield | Simulation | | | | | ⏳ 14 | ⚙️ GenAI | Operations Applications | | | | | ⏳ 15 | 📈 Integration | Course Synthesis | | | | | ⏳ 16 | 📝 Final | Exam Prep | | | | --- ## 📝 Session Notes ### Session 1: Fast Food Operations (McDonald's vs. Burger King) **Date**: July 21, 2025 **Case**: McDonald's Corp. & Burger King Corp. #### 🎯 Product Definition - **Problem Solved**: Quick, affordable meals for time-constrained customers - **Value Proposition**: - McDonald's: Speed + consistency + low price - Burger King: Customization ("Have it your way") + quality - **Customer Alternative**: Other fast food chains, sit-down restaurants, home cooking #### 💪 Capabilities Analysis - **Key Resources**: - McDonald's: Standardized equipment, line flow process, pre-made inventory - Burger King: Flexible assembly stations, steam tables, customization capability - **Constraints**: - McDonald's: No customization possible without disrupting flow - Burger King: Slower service time (4 min vs 2 min) - **Competitive Advantage**: - McDonald's: Speed and efficiency at scale - Burger King: Product flexibility #### 🔄 Product-Capability Dynamic - **Current State**: Trade-off between speed and flexibility - **1-Year Vision**: Optimize within chosen model - **4-Year Vision**: Technology might enable mass customization - **Resource Investment Needed**: Process redesign vs. technology adoption #### 📊 Value Dimensions Performance - **Time**: - McDonald's: ⭐⭐⭐⭐⭐ (1.5-2 minutes) - Burger King: ⭐⭐⭐☆☆ (4 minutes) - **Quality**: Both ⭐⭐☆☆☆ (standardized fast food quality) - **Flexibility**: - McDonald's: ⭐☆☆☆☆ (no customization) - Burger King: ⭐⭐⭐☆☆ (limited customization) - **Price**: Both ⭐⭐⭐⭐☆ (competitive pricing) #### 🔑 Key Insights 1. **Time matters more than expected**: 7 seconds improvement = 3% market share gain 2. **Process design drives product capability**: MTS enables speed but kills flexibility 3. **The utilization puzzle**: Both chains show low utilization (40-79%) yet BK has slow service #### ❓ Open Questions 1. Why does low utilization coexist with slow service at Burger King? 2. How might technology change the speed-flexibility trade-off? 3. What hidden constraints exist beyond simple capacity? #### 🔗 Key Concepts Introduced - **Make-to-Stock (MTS)**: McDonald's approach - premade products - **Hybrid Make-to-Order**: Burger King's partial customization - **Process Capacity**: Bottleneck analysis (assembly station) - **Utilization**: Demand/Capacity ratio --- ## 🎓 Recurring Themes ### Theme 1: Process Design Trade-offs - Sessions: 1 - Key Pattern: You can't have everything - process design forces choices ### Theme 2: Capacity Management - Sessions: 1 (introduced) - Key Pattern: Capacity ≠ Speed (the utilization puzzle) --- ## 📈 Evolution of Understanding ### Week 1: Process Fundamentals - Session 1: Process design creates strategic trade-offs. The product you can deliver is constrained by your process choices. Time competition is fierce - seconds matter in market share. --- ## 🚀 Simplified Daily Process ### During Class (30 seconds) 1. Rate TQFP (1-5 stars) 2. Note what they WANT vs HAVE 3. One environmental constraint ### After Class (2 minutes) 1. Fill one card using template 2. Capture trade-off in one sentence ### Weekly (5 minutes) 1. Compare cards for patterns ### How Capabilities Enable TQFP - **Tech/IT** → Speed & Consistency - **Supply Chain** → Price & Quality - **HR** → Flexibility & Quality - **Distribution** → Speed & Reach - **Finance** → Enables all investments - **Management** → Coordination efficiency