Operations Frontier
- Efficiency/quality trade off
- Strategic decision
- Positioning and competitiveness
- Shift frontier, various form of innovation
- Disrupt current business processes
- Tactic Decision
- Continuous improvement to reach/stay on existing frontier
Processes and Process Mapping
- Flow shop; job shop
- Product-process (PP) matrix
- Pay attention to processes (don’t underestimate the details)
BCG Matrix
- Wild cat
- Small market share + high (expected) growth
- Star
- High market share + high growth
- Cash cow
- High market share + low (expected) growth
- Dog
- Low market share + low growth
Capacity Analysis
- Bottleneck analysis
Project Management
- Critical path management
- Crash/cost management (not included)
- Project control
Processes with Variabilities
- Unpredictable variability can lead to loss of throughput
- Inventory buffers, or increased capacity to deal with variability
- OM Triangle
AFTER MIDTERM
Forecasting
- Importance of recording, collecting, and using data
- Forecasting reduce variability
- Forecasting results feed into inventory management models
1. Qualitative analysis
a. Survey method (not included)
2. Time-series analysis
a. Moving averages (included)
b. Exponential moving average (not included)
3. Causal relationships
a. Predicting impact of Panama port (not included)
Inventory Management
- Key challenge: matching supply with uncertain demand
- Analytical approaches vs. trial and error approach
Analytical models
1. EOQ (continuous review) model
a. Order new inventory when reaches reorder point
b. (+) Reactive -> Low safety stock
c. (-) Expensive to manage (continuous review)
d. ROP = Mean demand + Safety Stock
2. Periodic review model
a. Order inventory at fixed interval (e.g. every saturday)
b. No need for monitoring inventory
3. Newsvendor model
Risk pooling
- Centralized Warehouse
- Component commodity
- Lead time-inventory tradeoff
- Postponement
- Dual sourcing: 2 different sources of supply, or 2 different transportation
modes
Supply Chain Management
- Bullwhip effect
- Two basic functions of SC
- Physical efficiency vs. Market responsive
- Push-pull
Case Studies
1. Southwest airlines
a. Airport turnaround process
b. Linked to operations frontier
2. Volvo Experiment
a. Linked to PP matrix
b. Job shop is not successful
3. Continental lite
a. Straddling strategy, one process to support two positions
b. NOT SUCCESSFUL
4. YVR Airport Security Screening
a. Long-run capacity vs. long-run demand
b. Inventory build diagram, average inventory
5. OffPeak Program at Ports of LA and Long Beach
a. Match supply with demand using pricing
b. Demand management
c. People pay higher fees during peak time, profits go to workers
working overtime
6. Kristen’s Cookie COmpany
a. Assessment of a business proposal (from the OM/process perspective)
7. Shouldice Hospital
a. Apply the concepts of capacity rate, throughput rate, and resource
utilization
b. Identify bottleneck
8. Container imports Asia to the US
a. Off-shoring
b. Near-shoring
c. Push-pull
d. Rolling forecasting
- FEB 10
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