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Types of operational issues

Anonymous A

Hi everyone, going for MBB interviews and realised I can't seem to find many operational cases - those I've come across generally are based on the following problems / solutions but I was wondering if there were other common themes / cases you have seen? Would appreciate any info you can share on this.

- low utilisation rate leading to high cost

- fragmented procurement practices leading to high cost

- bad delivery capability leading to high customer refund requests

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Sidi replied on 05/09/2018
McKinsey Engagement Manager & BCG Consultant | Interviewer at McK & BCG for 7 years | Coached 35+ candidates secure MBB offers

Hi Anonymous,

well - in principle, "Operations" transform resources (or data inputs) into desired goods, services, or results, hence creating value to recipients (mostly: customers). Two or more connected operations constitute a process, and are generally divided into four basic categories:

(1) processing,

(2) inspection,

(3) transport

(4) storage

For each of these categories, efficiency is name of the game. This means that either the output is maximized (given certain resource inputs), or resource input needs are minimized for a desired output.

So for example for processing, operations problems can cover yield improvement problems, while for inspection, there might be the topic of automation (hence reducing input resource needs). And so on. You can draw a whole landscape of problems.

Cheers, Sidi

Vlad replied on 05/09/2018
McKinsey / Accenture / Got all BIG3 offers / More than 300 real MBB cases / Harvard Business School

Hi,

There are several types of operational cases that you may have:

1) Operational math problems. (e.g. Should we increase the speed of the elevator or just buy a second one? How should we reduce the queues? How should we increase the output of a factory?).

Structuring:

  • Usually, you have to look at the process. Even the most complicated systems have the inflows and outflows

The key concepts that you have to learn:

  • Capacity and utilization (both machine and people)
  • Cycle time, Throughput time, Little's Law
  • How the does lowest cycle time influence the production? (Lead time = cycle time of the slowest process)
  • How can we mitigate the bottlenecks with low cycle time? (Buffer, Parallel process, speeding up)

2) Cost cutting cases

Structuring:

  • What is the cost composition and what are the biggest costs
  • Benchmarking of the biggest costs to find the improvement potential
  • Process improvements to meet the benchmarks
  • Costs and benefits of the proposed initiatives

The key concepts that you have to learn:

  • Internal / external benchmarking
  • Idle time
  • Core processes (usually are optimized) and the supporting processes (usually are cut)
  • Math structures (Frequency of operations * time per operation)
  • Other useful structures (e.g. people - process - technology)

Feel free to reach me for further help with these cases.

3) Bottleneck cases (e.g. Huge write-offs in the meat store or bottleneck on the bridge)

Structuring:

You draw a value chain and go through it to find a bottleneck.

E.g. for the meat write-offs it will be:

  • Supplier issues (packaging, meat quality, warehousing)
  • Transportation (Length, fridges)
  • Store (Refrigerators in the warehouse, in-store fridges, demand for meet)

Best