Operations Consulting - Everything You Need to Know

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Operations Consulting

Most people haven't the slightest clue what operations (we'll be abbreviating this as ops) consulting is. When people hear the word "operations," their mind immediately thinks bad job, bad compensation, and bad career versatility. Operations consulting might not be on par with management consulting, but it's certainly no schmuck job.

Operations consultants are all about execution. Typically, a company has a defined problem to which you find a solution. It's similar to the function of management consultants. The biggest difference is that, in operations consulting, you help them execute that solution.

Here are some examples of projects ops consultants might work on from @F. Ro Jo.

- How are insurance surrenders processed? What gates must be cleared before payment can be calculated? How are payments processed?
- How do we check a walk-in patient into the hospital most efficiently? How do we ensure that the doctor has the right file with the relevant information?
- How do raw materials become the finished product? Where can the process be more efficient? How can a new form of technology be incorporated in the process?
- How does the client book trades? How can the data be centralized?
- What sort of KPIs should be used for each department?

As you can see, you're not the guy doing the back office work. You're advising on how they should best do it.

As you've probably deduced, projects for ops consulting can vary quite a bit.

Operations Consulting vs. Management Consulting - Compensation, Exit Opportunities, and Lifestyle

Operations consulting isn't half as prestigious as management consulting, and a large part of that is because of its significantly lower salary. Management consultants typically make around $100K out of undergrad all-in. For operations, the compensation is highly variable depending on the firm. On average, ops consultants make anywhere from $55K - $80K. The higher end of that is made by consultants from more prestigious firms.

The exit opportunities are another factor that makes ops a less desirable craft. Management consulting feeds into top business schools, premier finance roles, and management positions at F500 companies. For ops consulting, exit opps are somewhat similar but far worse at the same time. You'll have to separate yourself in some unique way to put yourself on the same level as a management consultant for business school. Additionally, ops consulting doesn't feed into finance as much as management consulting.

The lifestyle for ops consultants is comparable to that of all consultants, including management consultants. Travel every week, Monday-Thursday work, and typically return home Friday. Consultants can expect to put in anywhere from 50-70 hours a week, depending on the project.

Where Are the Best Ops Consulting Groups? How Good Are They?

Management consulting is more prestigious than operations, but some operations groups come close. Let's define prestige as the weight the job title carries on your resume. The more prestigious, the better the exit opps - business school, F500 companies, top finance roles, etc. Here's @BobbyDigital with one operations group in particular that compares in prestige to management consulting at MBB (top consulting groups: McKinsey, Bain, and Boston Consulting Group).

I can tell you that S&O is likely Deloitte's highest regarded group. In my opinion, it falls shy of MBB's reputation but is head and shoulders above the rest. Don't let the word "operations" scare you due to the people on WSO who constantly talk poorly about it. They are likely just reciting a common misconception to sound informed.

So, there are a few operations groups in the industry that offer very solid compensation, exit opps, and prestige. However, there are some groups that offer virtually the same compensation, exit opps, and prestige as management consulting positions. Those groups are the operations groups of MBB. Here's @Andres on MBB operations groups, their prestige, and why they're so appealing.

1. This is exactly the same role as a generalist BA, except you are expected to be focusing on Operations engagements in most of your time.
2. Internal and external prestige \ business school placement is roughly the same.
That said, it all comes down to whether you are interested in Operations or not. (I know many MBB consultants who are and many who are not):
a) If you are, this is really a no-brainer
b) If you are not, then you probably are looking at this as an opportunity to switch to something else once inside McKinsey, and I can offer two considerations on this:
- It is probably doable, and way easier than breaking into the firm.

Besides the incredible exit opps MBB operations groups offer, they provide one distinct advantage other operations groups don't: the ability to transfer into MBB management consulting with comparative ease. That isn't to say it's easy, but it's certainly far easier than transferring from any other operations group or any consulting group for that matter. If your end goal is to get into management consulting with MBB, then going into one of their operations groups is a great plan B.

Bulge Bracket Operations vs. Operations Consulting

Because ops consulting is hardly a well-known job as it is, many mistakenly believe bulge bracket operations is the same as ops consulting. This couldn't be further from the truth, as there are some very important differences to understand between the two. Here's @CrossFit on what each of these jobs looks like.

First, make sure you know the difference between BB "operations" and "operations consulting"; they are two completely different jobs.

An operations position at a bank would entail things like reconciling trade accounts. You're basically the third man down the line from the trader, with trade support being the middle man.

Operations management involves product development, production, and distribution. You manage things like purchasing, inventory control, logistics, etc. So a consultant would advise on these areas.

In short, the skill set from BB ops wouldn't be particularly transferable to operations consulting. But if consulting is something you want to do, just make a concerted effort to learn about the focus areas and wait for business school.

Operations at a bank is typically considered a worse job choice than ops consulting. However, there's plenty of room for promotion in banking operations, the compensation is roughly comparable to banking (salary alone, not including bonus), and it's a much more relaxed lifestyle. Here's @trailmix8 on the specific functions of banking operations and why it's not the deadbeat job some suggest it is.

As ops analysts, we are expected to improve processes and design systems that make the workflow more efficient through collaboration with the FO and technology. Overall, there is quite a bit of out-of-the-box thinking, attention-to-detail project work, etc., that is required of our roles.

More information on banking operations and its exit opportunities below. For Management vs Strategy vs Operations, skip the below text.

If you end up in banking operations, there are three common paths in which your career plays out (@NorthEastIdiot).

1) You work in ops for a few years, learn the back end of the business, go to b-school, and make a career shift.
2) You work in a group that deals with products, has exposure to investment management, get lucky, and a front office type takes you on.
3) You work in ops for the next few decades, make a decent but not amazing living, have easier hours, and sit at the bottom of the food chain with no real opportunities to move anywhere but another ops role in another group/firm.

Management vs Strategy vs Operations

Strategy consulting helps an organization solve the issues they face. They identify the problem and create a plan for the firm to follow.

Management consulting has broadened over the past few years into a diversified role. It includes strategy, among other things, although it's reached a point where management consulting is essentially strategy consulting.

Operations consulting is a more focused art. It typically focuses on a single problem as opposed to management consulting, which often looks at the bigger picture. In addition, it helps the business set their plans in motion.

Original Thread

http://www.mckinsey.com/client_service/operations

I'm specifically looking at product development and manufacturing positions.

I haven't found too many threads about this practice except a pretty old one with outdated info, I believe. How does this practice compare to strategy consulting/BA positions coming out of undergrad? Does it carry the same weight to get into top 10 b-schools? Prestige? Exit opps? Is MCK big in this space because the office has really low headcount for this dept...

Any info is appreciated.


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Comments (23)

May 9, 2013

anyone? bump it up

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May 9, 2013

Correct me if I'm wrong but BAs don't belong to practices. You always work as a generalist if you're a consultant at McKinsey. Practices are formal bodies with partners, experts etc in them.

May 9, 2013

i believe there is a shift happening, the position im referring to is under specialist for the subject matter track, so entry level specialist. it's a fairly new position, but i think they are trying to expand in this area. so let's say all engagements i work on has to do with manufacturing in the operations function. how does this experience compare to the generalist experience for MBA apps and possibly moving to PE/VC?

May 9, 2013

I believe Operations is just a function that McKinsey does, similar to strategy, risk, etc. I believe that you would be a guy working on solely operations engagements across industries.

Either way, to my knowledge, BAs always enter as generalists, so it would be at least a few years down the line before you would choose to start specializing.

May 9, 2013

I don't see anything on that page about "entry level specialist"

edit: here it is

http://www.mckinsey.com/careers/roles/business_ana...

May 9, 2013
Ghost93:

I don't see anything on that page about "entry level specialist"

edit: here it is

http://www.mckinsey.com/careers/roles/business_ana...

ding ding ding, we have a winner. thats it exactly with a focus in one of the listed core areas.

so pretty similar exits? just trying to gauge against some other offers i have, if this was strategy BA i would jump on it, but it's not.

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May 9, 2013
xfactor:

http://www.mckinsey.com/client_service/operations
specifically looking at product development and manufacturing positions

havent found too many threads about this practice except a pretty old one with outdated info i believe. how does this practice compare to strategy consulting/BA positions coming out from undergrad? does it carry the same weight to get into top10 bschools? prestige? exit opps? is mck big in this space because the office has really low headcount for this dept...

any info is appreciated

I have several friends who are in practice roles as BAs; I believe the three practices you can join at the BA level are:

-- Operations
-- Business Technology
-- Corporate Finance

My understanding is it's a bit like a "major" in college; you spend a lot of time working in those areas but not necessarily all of your time [depends a lot on supply of work available].

Not sure about the "specialist" role - could mean what I described above but could also be a new type of position.

Exit opportunities should be similar.

May 9, 2013
PrivateEmpire:
xfactor:

http://www.mckinsey.com/client_service/operations
specifically looking at product development and manufacturing positions
havent found too many threads about this practice except a pretty old one with outdated info i believe. how does this practice compare to strategy consulting/BA positions coming out from undergrad? does it carry the same weight to get into top10 bschools? prestige? exit opps? is mck big in this space because the office has really low headcount for this dept...
any info is appreciated

I have several friends who are in practice roles as BAs; I believe the three practices you can join at the BA level are:

-- Operations
-- Business Technology
-- Corporate Finance

My understanding is it's a bit like a "major" in college; you spend a lot of time working in those areas but not necessarily all of your time [depends a lot on supply of work available].

Not sure about the "specialist" role - could mean what I described above but could also be a new type of position.

Exit opportunities should be similar.

Do you know what the process for hiring in these practice areas at the BA level is?

May 10, 2013

Have some friends who did this, but at a post-MBA level (wasn't aware this was offered for undergrads). Same job as a generic consultant just a higher rate (~50%+) of Operations projects. You will still do an occasional Strategy or Finance or whatever project. Internally viewed as the same prestige with similar exit opps to b-school etc.

    • 1
May 11, 2013
AriZGold:

Internally viewed as the same prestige with similar exit opps to b-school etc.

Haha. No.

    • 1
May 11, 2013
consultingboi:
AriZGold:

Internally viewed as the same prestige with similar exit opps to b-school etc.

Haha. No.

elaborate? ive heard both arguments so far on exit opps

May 12, 2013
xfactor:
consultingboi:

AriZGold:
Internally viewed as the same prestige with similar exit opps to b-school etc.

Haha. No.

elaborate? ive heard both arguments so far on exit opps

I had a friend who got an undergrad offer from Mck for tech consulting (another specialization like operations) that struggled getting final round strategy BA interviews/offers from tier 2/3 firms(E&Y/Accenture) so I always got the impression there was a divide between the general BA program and the specializations. Can't comment specifically on operations BA position though and I'm still in college so take what I say with a grain of salt

Jul 17, 2013

BS. There is no difference in prestige between Ops and other areas.

You've formed your conclusion based on very confused logic, not taking into account the role of luck in the interview process. For example, when I applied to the top 10 UK schools I got turned down by # 4,5, 7,8 and 10. Got into Cambridge. By your logic we would have to conclude that Cambridge has lower entry standards.

Jul 17, 2013

Any other thoughts/information on this?

Jul 17, 2013

Repeating Ghost93, does anyone know the interview process? Is it the same as their other service lines? I would be surprised if it were.

Jul 19, 2013

Same interview process.

First year of B-school I did "generalist" application.
Second year of B-school I did "ops" application.

Process was the same.

Best Response
Jul 21, 2013

1. This is exactly the same role as a generalist BA, except you are expected to be focusing on Operations engagements in most of your time
2. Internal and external prestige \ business school placement is roughly the same

That said, it all comes down to whether you are interested in Operations or not (I know many MBB consultants who are and many who are not):
a) If you are, this is really a no brainer
b) If you are not, then you probably are looking at this as an opportunity to switch to something else once inside McKinsey, and I can offer two considerations on this:
-It is probably doable, and way easier than breaking into the Firm
-It would not be completely honest on your part towards the Firm, as you have probably been asked more than once during recruiting why Operations, and the Firm hires you expecting to fill this specific niche

Therefore, if you are not really into Ops, the most honest (not necessarily the most effective) thing to do would probably be following up with the Partner who gave you the offer and discussing your concerns.

P.S.: Some above have argued Ops BA role is less prestigious than Generalist BA using BTO as an analogy. Not so. While some slight stigma might exist for BTO (even though it's same track, same pay as other consulting roles) due to seeing BTO as sort of IT guys, Ops is different. Ops is a core area for Big 3 firms, a very valid business function, and is actually seen by some in consulting as "superior" to Strategy engagements due to Ops being more hands on, often delivering more tangible results (your end product is equipment utilization increase by 5% and 10% inventory decrease, not a fucking 100-slide deck) and being on the ground in the nitty-gritty of business. Ops engagements often have better work-life balance, but also often more travel to "exotic" locations (think a copper mine in the middle of nowhere).

To elaborate on exit ops, this really depends on your skill set. If you know really well how to de-bottleneck an oil refinery, that might not make you the most obvious candidate for an investment role in PE (unless it's a downstream oil - focused fund perhaps). It probably makes you a good candidate to work on portfolio side in such a fund, or an OilCo. A person who spent their BA stint working on strategy \ corp fin doing modelling-intensive engagements might be therefore more suitable for investment roles at PE - not due to any prestige difference, but simply because of more suitable skill set.

Anyways, people enjoying Ops are usually not the same people who enjoy PE/IB.

    • 3
Jul 20, 2013

10 bananas motherfucka

Jan 10, 2018

Operations consulting is a field of management consulting which specializes in devising operational and business strategies to solve operational, supply chain, and efficiency problems within different industries. Operations consultants use many of the concepts, techniques and thought processes explained throughout this site on operations management, supply chain management and lean manufacturing to solve the problems they are presented with. For an example of consulting frameworks and tools: Operations consulting tools.
Operations consulting just like any management consulting engagement can deliver tangible results if the management team follow a general engagement process and dedicate time to working with the consulting team in order to deliver the required results.

Jan 10, 2018

those who know, know BDO.

"The cheaper the crook, the gaudier the patter"

Jan 10, 2018
Jan 10, 2018