July 20: Operational Strategy
"You have an operational strategy when you decide where you want the bottleneck to be." - Jeff Wilke, former CEO of Worldwide Consumer at Amazon
Source: Fact of the Day 1 interview with Jeff Wilke
Published: January 2021
Operational Strategy
You have an operational strategy when you decide where you want the bottleneck to be. If the bottleneck in a process or business reveals itself to you over time, you don’t really have an Amazon-quality operational strategy.
Jeff Wilke’s favorite business book focuses on Bottlenecks: The Goal by Eliyahu Goldratt.
By 2001, the Amazon Operations team had chosen the item sorter as the bottleneck for holiday shipping. In order to learn to maximize its performance during the year, when capacity utilization was often 50% or less, Jeff had the fulfillment centers (FCs) rope off portions of the sorter so that it remained the bottleneck throughout the year. At holiday peak, the teams just removed the ropes the FCs scaled seamlessly.
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