"It's difficult to control everything," says our guest professor for this week, Santiago Gallino. "What is not difficult is to plan for everything." Today we venture into the sphere of business that masters the planning, and backup planning: operations management. It's more than just predicting a bottleneck and imagining a solution, because there's always a bottleneck to clear. It's about modeling, and weighing the costs of messing up vs. missing out. For instance, take a newspaper vendor who has to decide how many newspapers to sell tomorrow morning. Do they buy fewer, knowing that they'll sell out–and then miss out on potential revenue from papers not sold? Or do they order more than they expect to sell, just in case–and eat the cost of a few unsold papers? This type of trade-off applies to all kinds of businesses, and Gallino talks us through how to choose. The only certainty in this life is uncertainty. But we are certain you will come out of this episode feeling better prepared for your future business. And fortunately, there are no bottlenecks in podcasting. The series is hosted by Robert Smith and produced by Max Freedman. Our project manager is Julia Carney. This episode was edited by Alex Goldmark and engineered by James Willetts. The show is fact-checked by Sierra Juarez. Help support Planet Money and get bonus episodes by subscribing to Planet Money+ in Apple Podcasts or at plus.npr.org/planetmoney. Learn more about sponsor message choices: podcastchoices.com/adchoices NPR Privacy Policy
This is Planet MONEY from NPR.
Welcome back, everyone, to Planet Money Summer School MbA edition.
The only business school where free is not a dirty word.
I'm Robert Smith.
Today we are leaving the classroom for a field trip.
We'll travel halfway around the world to a romantic farm and then to the least romantic place we can think of, our local supermarket checkout line.
Because today we are talking about operations management.
The people who work in operations are the unsung heroes of any business.
They are the optimizers of a business, the waste police.
They keep the factory line moving quickly, the supply chain unbroken, and the lines at Disneyland so twisting and confusing that you don't even know how long you've been waiting.
Today on the show, we will show you the tools that the operations gurus use to keep the world spinning smoothly.
In fact, our professor this week arrived with his clipboard and stopwatch in hand.
He teaches operations at the Wharton School at the University of Pennsylvania.
Santiago Galnino.
Thanks for teaching the class today.
Oh, my pleasure.
Thank you very much for having me.
So one of the things I love about operations is how concrete it is.
So, for instance, I just bought a cup of coffee from Starbucks.
But in terms of operations, just getting a cup of coffee in my hand is incredible when you think about it.