Class 19: Course Wrap-up
1. Course Main Concepts and Simulation
Debriefing
2. Sloan Evaluation Forms
3. Final Feedback Survey
after class
2002 - Jérémie Gallien
Intro to Ops At-a-Glance
#
Day
Date
Contents
Readings
1
Mon
2
Assignments
Sim
29-Mar
Course Introduction
Course Syllabus
Wed
31-Mar
Case: Burger King + McDonald's
Types of processes
3
Fri
2-Apr
Lecture: Capacity
Wait-in-line blues
1 Ex. Buildup, 1 Ex. Queueing
4
Mon
5-Apr
Case: National Cranberry
5
Wed
7-Apr
Case: Webvan
6
Fri
9-Apr
Lecture: Inventory
Automate or Die
1 Ex. EOQ, 1 Ex. Newsboy
7
Mon
12-Apr
Case: Barilla
Managing Supply-Chain Inventory
8
Wed
14-Apr
Case: Sport Obermeyer
Rocket Science Retailing
Case Write-up
9
Fri
16-Apr
Lecture: Production Control
Growth in MRP, Control of JIT
1 Ex. Kanban, 1 Ex. Commonality
10
Wed
21-Apr
Case: Hewlett-Packard
11
Fri
23-Apr
Book: The Goal
The Goal
Book Review
12
Mon
26-Apr
Lecture: Quality
Hank Kolb case
1 Ex. SPC, 1 Ex. 6 Sigma
13
Wed
28-Apr
Case: Toyota
14
Fri
30-Apr
Lecture: Process Design
15
Mon
3-May
Case: Global Financial Corporation
16
Wed
5-May
Lecture: Supply Chain Design
17
Fri
7-May
Lecture: Product Design
18
Mon
10-May
Case: Sega Dreamcast
19
Wed
12-May
Simulation & Course Wrap-up
Reengineering Work, ERP Tech. Note
Chapter 8 Clockspeed
Simulation Write-up
2002 - Jérémie Gallien
What is Operations Management?
TIME
OM = Strategy Execution!
QUALITY
FLEXIBILITY
COST
2002 - Jérémie Gallien
Benchmark Companies
• Toyota
• FedEx (Webvan)
• Dell
Lean Manufacturing
Hub & Spoke
Direct-to-Consumer
ATO technology
• Walmart (Barilla) Vendor-Managed
Inventory
• Sport Obermeyer Quick Response
• Zara
Assortment Optimization
2002 - Jérémie Gallien
Operations Management History
• 1920’s: Ford & Taylor
Moving Production line and standardized work
• 1930’s: Shewhart
Statistical Control of Quality
• 1960’s: Ohno
Lean Production System
• 1980’s: Goldratt
Theory of Constraints
• 1990’s: Hammer
Reengineering & Process Focus
• 2000’s: 15.760 Alumni
Storytelling
2002 - Jérémie Gallien
A Translation Challenge
Corporate Structure
Top Management
speaks the language of
MONEY
Operations
Management
Mid-Mgt., Associates, Workers
speak the language of
THINGS
OM merges physical and financial analyses,
and requires great care to people issues!
2002 - Jérémie Gallien
Operations Management
Architecture
Product
Supply-Chain
Integral Vs. Modular:
Integral Vs. Modular:
• Functions
• Interface
• Interchangeability
• Geography
• Organization
• Culture
• Communication
Customization
Process
HR
Project
Functional
Managers
Job Shop
General
Manager
Batch Flow
Line Flow
Continuous
Volume
Project
Managers
2002 - Jérémie Gallien
Operations Management Activities
Set of responsibilities:
1.
DESIGN
Product, Process, Supply-Chain, HR
2. PLANNING
Demand (forecast), Supply (Capacity)
3.
CONTROL
Inventory, Production Control, Suppliers
Pricing, LT Quote, Quality, HR
4.
IMPROVEMENT Time, Cost, Flexibility, Quality
2002 - Jérémie Gallien
Operations Management Tools
Product
Design &
Devlpt.
Design
Planning
Control
Improvement
Process
Supply
Chain
Product Architecture
Development Process
Reengineering
Market Positioning
Process Architecture
Reengineering
SC Architecture
Strategic Sourcing
CPM
DSM
Capacity Analysis
ERP, CPM
Quick Response
Capacity
CPM
CPM
Critical Chain
Inventory
TOC, CPM, ERP
Production Control
TQM
Inventory Theory
VMI (JITD)
Production Control
TQM
TQM
TPS
TOC (The Goal)
TQM, TPS &
Lean Manufacturing
TPS,
Lean Manufacturing
2002 - Jérémie Gallien
Factory Simulation Skills
Product
Design &
Devlpt.
Design
Planning
Control
Improvement
Process
Supply
Chain
Process Architecture
Process Flow Diagram
Forecasting
Capacity Analysis
Cycle Time Analysis
Inventory Control
Team Organization
TOC (The Goal)
TPS
2002 - Jérémie Gallien
4,000,000
3,500,000
3,000,000
2,500,000
2,000,000
1,500,000
1,000,000
500,000
0
0
5
10
15
20
25
Max # of Machines
2002 - Jérémie Gallien
Capacity Analysis
Processing Time (hours):
Step
1
2
3
4
Station
1
2
3
2
Set-up time (per lot)
0
0
1.5
0
Operation time (per unit)
0.062777
0.02
0.001666
0.021388
+
FORECAST
Capacity Utilization
ρ=λ/Nxµ
2002 - Jérémie Gallien
… and Queueing Theory
Average
Waiting
Time
W
0
1
2 ( S +1)
C +C
1 ρ
W=
×
λ 1− ρ
2
2
A
Capacity
Utilization
ρ=λ/Mxµ
2
S
2002 - Jérémie Gallien
An Example for Insight
1 job arrives
every minute
on average
Server takes 45
sec. to process
each job
Queue
initially
empty
λ=1
µ = 1.33
Queue
Length
5
4
3
2
1
0
1
2
3
4
5
6
7
8
9
10 11 12
Time
(min)
2002 - Jérémie Gallien
Cycle Time Analysis
Station 1
Station 2
Station 3
Station 2
60 kits/lot
total cycle time
30 kits/lot
total cycle time
2002 - Jérémie Gallien
Customer and Process Timeline
stage
1
LT1
stage
2
stage
4
stage
3
LT2
0
LT3
LT4
Target customer
delivery LT
customer
t
PULL
stage
1
stage
2
stage
3
stage
4
customer
PUSH
2002 - Jérémie Gallien
Delayed Differentiation
demand
Customization Step
Upstream
Steps
demand
demand
LT1
0
LT2
t
Target customer
delivery LT
2002 - Jérémie Gallien
Delayed Differentiation
Customization Step
Upstream
Steps
demand
demand
demand
LT1
0
LT2
t
Target customer
delivery LT
2002 - Jérémie Gallien
Inventory Theory…
Order Quantity Q
EDDLT
EDDLT
EDDLT
DDLT1
Reorder Level
Order Quantity Q
= Lead Time
= Expected Demand During Lead Time
= (Actual) Demand During Lead Time
DDLT2
LT
EDDLT
DDLT
Inventory
Safety Stock
LT 1
Order 1
placed
LT 2
Time
Order 1
received
2002 - Jérémie Gallien
Slide courtesy of Prof. Thomas Roemer, MIT.
… and Inventory Practice
•
EOQ Model
•
ROP/ROQ
•
Newsboy Model
•
Continuous Review/Periodic Review
2002 - Jérémie Gallien
$4,000,000
$3,500,000
$3,000,000
$2,500,000
$2,000,000
$1,500,000
$1,000,000
$500,000
$0
4/30
5/1
5/2
5/3
5/4
Date
5/5
5/6
5/7
5/8
2002 - Jérémie Gallien
Simulation Performance Drivers
• Proactive Vs. Reactive Strategy: this is what
models allow!!!
• Extent of quantitative analysis does have an
impact BUT describing qualitatively the
correct trade-offs brings you a long way…
• Understanding financial impact of
operational data (lead time, utilization,
queues, etc…) had a huge impact!
2002 - Jérémie Gallien
Final Words
Do Keep in Touch and…
GOOD LUCK!!!
2002 - Jérémie Gallien