Operations and general management
An operator owns a profit and loss (P&L) and leads the people who deliver it. This lesson covers P&L ownership, people and a weekly rhythm. Its worked example closes a warehouse profit gap.
Key takeaways
- A general manager or operations leader does not hand over a recommendation and leave.
- Write the maths of the goal.
- Use what you know about the business.
Key idea
A general manager or operations leader does not hand over a recommendation and leave. They own the numbers every week. The numbers only move when the people doing the work do something differently. Good analysis is the start. Running the plan, week after week, is the job.
What follows describes common patterns, not any one employer's process, unless a source is named. Steps differ by company, country and level and change from year to year. Read the job advert and the employer's own careers page for the exact steps.
These roles include plant and warehouse managers, area and country managers, and heads of a business unit. They also include graduate leadership programmes that move new hires through several operations jobs. Interviews often use problems from running a site or a team, such as a cost overrun, falling service or a safety issue. Expect questions with numbers about capacity and cost. Expect many questions about leading people through change. Graduate programmes often use assessment centres: a day of tests, interviews and group exercises. This is a general pattern that varies by company.
The five moves, as an operator
- 1Pin the question. Which number must move, by how much, by when, and what must not get worse (safety, service, quality)?
- 2Write the maths of the goal. Start with the unit P&L: revenue minus variable cost minus fixed cost. Below that, cost per unit is hours per unit x cost per hour. Output is capacity x how fully it is used.
- 3Use what you know about the business. Where is the bottleneck, the one step that limits the whole flow? Which costs move with volume, and which do not?
- 4Find the facts that decide it. Look at daily and weekly numbers by shift and by step. Spend time where the work is done. Ask the people doing the work what slows them down.
- 5Say so what. The fix, who owns it, the weekly measure that shows it is working, and the date you expect the number to move.
What is different from a consulting case
- P&L ownership. You are judged on the result, not the idea. Prefer a fix you can deliver this quarter over a bigger one you cannot.
- People. Shifts, morale, skills and hiring decide whether a plan works. Talk to shift leaders before you announce anything.
- Cadence. Running a unit is a weekly rhythm: the same few measures, reviewed at the same time, with actions and owners. Leading measures, such as orders per labour hour, move first and warn you early. Lagging measures, such as monthly profit, only confirm it later.
- Trade offs between service, cost and safety are daily. Name the one you are protecting.
Worked case
A warehouse misses its weekly profit target
The prompt
Fictional and illustrative. You run a warehouse near Kuala Lumpur, Malaysia, that handles 40,000 online orders a week for retailers. It is paid MYR 12 per order. Labour costs MYR 6 per order, up from MYR 5 three months ago because of overtime since a packing station became a bottleneck. Other variable costs are MYR 2 per order and fixed costs are MYR 140,000 a week. The target is a profit of MYR 60,000 a week. Where is the gap, and what do you do?
The structure
- Weekly profit = orders x (price minus variable cost per order) minus fixed cost
- Revenue: orders x price per order
- Variable cost per order
- Labour, including overtime
- Other variable costs
- Fixed cost
Working it through
1. Revenue
40,000 orders at MYR 12 each.
Weekly revenue (MYR):40,000 × 12 = 480,0002. Variable cost
Labour of MYR 6 plus other costs of MYR 2, on every order.
Weekly variable cost (MYR):40,000 × (6 + 2) = 320,0003. Profit today
Revenue minus variable cost minus the MYR 140,000 fixed cost.
Weekly profit (MYR):480,000 - 320,000 - 140,000 = 20,0004. The gap
The target minus profit today.
Gap to target (MYR a week):60,000 - 20,000 = 40,0005. Value of fixing the overtime
Bring labour back from MYR 6 to MYR 5 per order across all orders.
Weekly saving from labour at MYR 5 (MYR):40,000 × (6 - 5) = 40,000
The recommendation
Profit is MYR 20,000 a week against a MYR 60,000 target. The whole MYR 40,000 gap comes from overtime, caused by the packing bottleneck. Bringing labour back to MYR 5 per order closes the gap exactly. I would fix the packing station first, because it removes the need for overtime without cutting staff. For example, I would add a second packing line at peak hours or move two pickers to packing. The weekly measure is orders packed per labour hour, reviewed every Monday with the shift leaders. I would also set a date for labour cost per order to reach MYR 5. I would protect delivery times while doing it, because a cheaper week that misses retailers' deadlines loses the contract.
Risks: Volume growth could create a new bottleneck elsewhere; Staff who relied on overtime pay may object.
Next steps: Time each step for one week to confirm packing is the bottleneck; Agree the plan with shift leaders before changing shift schedules.
Using this in the interview
- Ask: what is the target, what changed recently, and what must not get worse?
- Calculate: the unit P&L, the gap, and how much each fix is worth.
- Say: the fix that closes the gap, who owns it, the weekly measure, and how you will bring the team with you.
Labour cost per order rose because of overtime at one step. What is the best first move?
Which is a leading measure for this warehouse?
Sources for this lesson (1)
- Recognized public explanations of case-interview concepts and terms
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Keep going: lesson 6 of 8
It builds on what you just read, in The same acumen in other roles.
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