SUPPLY CHAIN AND OPERATIONS MANAGEMENT
Summer 2002
Prof. William C. Giauque (Juke)
CLASS MATERIALS:
Case packet
Book:
Operations Management for MBAs (2nd Edition), Jack R. Meredith and Scott M. Shafer, John
Wiley & Sons, 2002.
COURSE OBJECTIVES
We review the following topics in this course:
1.
Corporate strategy requires us to think about what it is we do as an organization.
What are we good at and how can we succeed in a competitive world? In particular,
how can and does our supply chain and operations strategy contribute to good
corporate strategy?
2.
Quality is a critical part of any product or service, and has become vital over the past
few decades. Quality is not only essential in gaining and keeping customers, but has
been shown to be a major factor in the cost of doing business.
3.
Produce and process design is a fascinating and critical skill for most organizations.
Designing successful new products is the lifeblood of many companies, while good
process design can usually decrease costs and increase responsiveness and quality,
generally for very little investment.
4.
The structure of transformation operations. Every viable organization transforms
inputs (raw materials, data, unaudited accounts …) into outputs (products,
information, audited accounts …) through the application of resources. We discuss
the many ways of organizing and controlling transformation operations. Automobiles
are generally produced on assembly lines while heart surgery is customized to the
individual patient. These two systems obviously differ enormously in atmosphere,
efficiency, productivity, and costs, but what factors make an assembly line
appropriate for making cars but not delivering medical care? Is there some medical
care that can, in fact, be best delivered by an assembly-line approach? How does one
decide which is the most appropriate production method for a given need (assembly
lines and customized production are only two possibilities)?
5.
Supply chain management, specifically purchasing, logistics, and inventories, and
generally system dynamics and interfaces, have seen enormous changes over the past
decade. Purchasing, or more broadly, strategic supplier management, has evolved in
many forward-looking firms from arms-length, competitive bidding to cooperative
strategic partnerships which define distinctive competencies for the supply chain as a
whole, rather than for the individual concerns. Likewise, excellence in logistics has
been one of the major factors in the growth of Wal-Mart, Federal Express, and other
firms. Inventory management has been revolutionized by such innovations as just-intime management and lean manufacturing.
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6.
Production control deals with approaches to coordinating and managing all of the
pieces needed to produce a complete product or service. There are four major
approaches we cover in this class: independent inventory control, theory of
constraints, enterprise resource planning, and lean thinking. Lean thinking is simply
the art of designing processes, including management and control processes, so
transformations occur with as little waste as possible. While this idea sounds simple
(even simplistic) on the surface, applying lean thinking has revolutionized operations
in the past few decades.
My objective is not to simply present ideas and definitions, but to help you develop the
critical and analytical skills to intelligently use these concepts. Throughout your career you will
encounter the principles we review in this class, but you will also encounter situations and
concepts which no class will prepare you for. How well you then think through the problem,
calling upon your observational, analytical, and communication skills, being open-minded when
needed and decisive when necessary, will be the true test of how well this course and this
program serve you.
GRADING:
Quizzes
30% total
We will have six short in-class quizzes, one at the beginning of each class, except for the
first and the last classes. The quizzes will take 20 minutes each and will be closed book
unless announced otherwise at the beginning of class. You will be able to drop your
lowest quiz grade, making each of your five highest quizzes worth 5% of your grade. No
make-ups will be allowed, so if you have to miss a class, that quiz will be the one you
drop. Quizzes might be either on today’s preparation or on previous topics.
Class preparation and participation (individual and group)
20%
This grade is based on your participation, both voluntary and when called upon, in class.
Sometimes you will be able to call upon your group for support, and sometimes you will
be asked for your individual analysis.
Final examination
50%
The final examination will be open book.
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Class 1:
29 June
Review of syllabus
Overview of the field of supply chain and operations management
Why is this an important field?
How does it integrate with other fields?
What interesting developments and advances should we be aware of?
Overview of corporate strategy
Corporate strategy
What is operations / supply chain strategy?
How does operations / supply chain strategy affect corporate strategy?
Benihana of Tokyo: video
Introduction to supply chain issues
The beer game
Discuss results
How can the system be improved?
Class 2:
6 July
Quiz 1
Text: Read Chapters 1 and 2 lightly. Go through this material quickly to get a general
idea of the material.
Read Chapter 3 carefully, and prepare exercises 3, 6, 7 and 9 on pages 96-97.
Case: Prepare Longxi Machinery Works – Quality Improvement (A)
1. How important is high quality to Longxi?
2. How costly is it when we catch a quality problem in the factory? How
costly is it to find that same quality problem in the field?
3. What do you think of Mr. Shi’s efforts? What improvement would
you suggest?
Class 3:
13 July
Quiz 2
Text: Read Chapter 4 carefully
View and discuss “The Deep Dive” video
Case: Prepare Living on Internet Time: Product Development at Netscape, Microsoft,
Yahoo!, and NetDynamics
1. What are the similarities and differences among the four approaches to
product development? What causes those differences?
2. What are the major steps each development project must go through?
What is the purpose of each step?
3. What is the best way to organize a project team? If there is no single
best way, what are the alternatives, and how do you choose the best
alternative for each situation?
Class 4:
20 July
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Quiz 3
Text: Read Chapter 5 carefully. Prepare exercises 3, 4 and 5 on pages 177-178.
We will also discuss a field called Theory of Constraints
Case: Prepare Donner Company
1. Which operations are common to most orders?
2. What order sizes would you schedule for the CNC drill? for the CNC
router?
3. Assuming normal process flows, how many minutes/board are needed
to process an order of 8 boards? 40 boards? 120 boards? 800 boards?
4. Do you feel that the entire bidding – planning – control –
manufacturing process at Donner is working effectively?
5. What recommendations would you make to Mr. Plummer?
Class 5:
27 July
Quiz 4
Text: Read Chapter 7 lightly. Get a general idea of this material.
Read Chapter 8 carefully.
Case: Prepare Sport Obermeyer, Ltd.
1. Using the sample data given in Exhibit 10, make a recommendation
for how many units of each style Wally Obermeyer should order
during the initial phases of production. Assume that all ten styles in
the sample problems are made in Hong Kong, and that Obermeyer’s
initial production commitment must be at least 10,0000 units. I
suggest that you ignore price differences among styles in your initial
analysis.
2. What operational changes would you recommend to Wally to improve
performance?
3. How should Obermeyer management think (both short-term and longterm) about sources in Hong Kong versus China?
Class 6:
3 August
Quiz 5
Text: Read Chapters 9 and 10 carefully. Prepare exercises 2, 4 and 6 on page 306, and
exercise 4 on page 331.
Case: Prepare Tombow Pencil Co., Ltd.
1. If “inventory is not only sizable, it’s growing,” as Mr. Ogawa states,
why is there an increasing problem with stock outs?
2. Should Tombow continue contracting out all the Object EO
manufacture, or should some or all of the manufacturing be moved inhouse? Why?
3. What should the marketing manager do to restore credibility with
customers?
4. What should Mr. Ogawa do, and why?
Class 7:
10 August
Quiz 6
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Text: Read Chapter 11 carefully.
Case: Prepare Toyota Motor Manufacturing, U.S.A., Inc.
1. As Doug Friesen, what would you do to address the seat problem?
Where would you focus your attention and solution efforts?
2. What options exist? What would you recommend? Why?
3. Where, if at all, does the current routine for handling defective seats
deviate from the principles of the Toyota Production System?
4. What is the real problem facing Doug Friesen?
Class 8:
17 August
FINAL EXAM. Open book and notes.
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