Part 1. The Strategic Role of Operations
Class 1a. Introduction to Operations
Objective: Characterize operations management and its connections with the corporate strategy with the
purpose of gaining competitive advantages.
Readings: MBPF: Chapters 1 & 2.
“What is strategy?
Start reading “The Goal” (there will be a homework assignment on class 7). Consider the following questions
for discussion.
1.
2.
3.
In a business context, what is your understanding of operations?
What are the competitive priorities faced by a typical company (services or manufacturing)?
What is the role played by operations to achieve them?
Class 1b. Strategy and the Process Spectrum
Objective: Introduce the concept of focus and the connection between strategy and processes. Introduce the
variety of available processes for the organizations.
Readings: Shouldice Hospital Limited. Consider the following questions for discussion.
1.
2.
Model the Shouldice Hospital as a processing operation with products, attributes, and resources.
What are the competitive priorities of the Shouldice Hospital? What type of market did they
choose to focus? How does its operational strategy support the corporate strategy?
Prepare: Michigan Manufacturing Corporation: The Pontiac Plant - prepare a short presentation answering
the italicised questions:
1.
2.
3.
Why is it that the overhead costs (Exhibit 2) vary so much from plant to plant in the Michigan
Manufacturing system?
Why is it that the Heavy Equipment Division managers sub-invested in the Pontiac plant?
What should Noelle do with the Pontiac plant? Justify your recommendation.
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Part II. The Process View of Operations
Class 2a. Process measures and Little´s Law
Objective: Discuss process types, their characteristics, and the product/process matrix. Introduce the process
basic measures: throughput, inventory, flow time, and the connections between them.
Readings: Time - The Next Source of Competitive Advantage.
MBPF: Chapter 3.
Prepare: CRU Computer Rentals. Consider the first eight questions of the case (submit a concise report on
them - no oral presentation).
Class 2b. Process Flow Analysis
Objective: Discuss process flowcharts and the fundamental performance measures, such as cycle time,
capacity, utilization, and inventory. Dis cuss the several factors which affect cycle time and
capacity.
Readings: The Goal (at least until page 161).
MBPF: Chapters 4 & 5.
Prepare: Kristen’s Cookie Company. Consider the questions on the case (submit a concise report - no oral
presentation).
CRU Computer Rentals. Prepare presentation of question 9 on the case.
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Class 3a. Manufacturing Application
Objective : Re-enforce the concepts discussed in Class 2b and show how they can be used in capacity
investment decisions.
Prepare: National Cranberry. Consider the following questions for discussion (Prepare a short presentation
addressing the italicised question):
1.
Draw a chart with the process flow for the current Receiving Plant #1 process. What is the capacity
for each operation in the process?
2.
What is the maximum achievable long run flow rate for the Receiving Plant #1 process? Which factors
affect such rate?
3.
Currently, what is (are) the main reason(s) for the waiting time of the trucks and excess overtime?
4.
On average, how much time do the trucks wait on a busy day? Assume that at 7:00 AM the
processing of berries starts and assume berries arrive at steady rate of 1500bbls/hr.
5.
What benefits would you expect to have if processing were to change from 11:00 AM to 7:00 AM
during the peak period? Should this be done for the whole season?
6.
NCC is considering the purchase of two new dryers and the conversion of up to 10 dry berry
holding bins so that they can hold water harvested or dry berries. What are your
recommendations? Assume drivers are paid $5.00 an hour.
You may want to download and use the Excel workbook NCC.xls to analyse this case, which is available at
http://www.isr.ist.utl.pt/~cfb/gomd/.
Part III. Lean Operations
Class 3b. House Building Game
Objective: Show, through a simulation game, how different operational structures lead to different
performances (cost, quality, time).
Material: Scissors, stapler, tape, ruler, clock with seconds marker.
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Class 4a. Lean Operations Paradigm: waste elimination
Objective: Through the house building game, introduce the paradigm of lean operations, focusing on waste
reduction to achieve rational production systems.
Readings: “Is VW’s New Plant Lean or just Mean?” (FYI)
“Toyota Factories in Japan Grind to a Halt” (FYI)
Prepare: “Impact of Buffer Size on Throughput”. Simulate different scenarios using the Excel workbook
machsim.xls. Prepare to discuss your conclusions on the relationship between buffer space and
flow rate in the presence of variations.
The Excel workbook machsim.xls
http://www.isr.ist.utl.pt/~cfb/gomd /.
with the text describing its utilization can be found at
Class 4b. Lean Operations for product variety
Objective: Study the main components of the Toyota Production System and critically evaluate its costs and
benefits. Discuss its applicability to an environment with product variety. Compare Kanban with
MRP as two approaches to control flow.
Readings: “A Big Mac Strategy at Porterhouse Prices” (FYI)
Prepare: Case “Toyota Motor Manufacturing (USA)”, considering the following questions for discussion.
Prepare a short presentation to address the italicised question.
1.
What are your recommendations to Doug Friesen regarding the seat problem?
2.
What is your position regarding halting the production line? What is the cost of halting 1 minute?
30 minutes? 60 minutes? Do you think the line should stop when the workstation detects a
defective seat?
3.
Where, if at all, the present process of defective seat management deviates from the principles of the
Toyota Production System?
4.
What is the real problem faced by Doug Friesen?
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Part IV. Supply Chain Management
Class 5a. Inventory and scale economies
Objective: Introduce inventory and its role in the enterprises. Emphasis on scale economies as the first reason
for the existence of inventory
Readings: MBPF: Chapter 6
“Toyota Motor Shows Its Mettle After Fire Destroys Parts Plant” (FYI)
“New Economics of Economy Cars” (FYI)
“Counting profits from timely inventory trends” (FYI)
Finish reading “The Goal” (you may stop on page 246)
Class 5b. Dealing with Uncertainty and the role of centralization
Objective: Discuss the characteristics of forecasting and to demonstrate how to manage inventories in the
presence of uncertainty on demand and/or response time of suppliers. Discuss the concept of
centralization and its role on the design of supply chains.
Readings: MBPF: Chapter 7
“Shape Up, Ship Out”
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Class 6a. Postponement and Accurate Response
Objective: Discuss the concept of postponement and its application to supply chain design. Discuss
methodology to find optimal order quantities in an environment where product value decays over
time, e.g., the fashion industry.
Readings: Strange Bedfellows (FYI)
Compaq to Adopt Made-to-Order Sales Model (FYI)
McD’s race for life in the faster food lane (FYI)
Invoice? What’s an Invoice? (FYI)
Prepare: Case Benetton, considering the following questions discussion. Prepare a concise presentation
addressing the italicised question.
Summarize the important elements of Benetton's marketing, logistics, manufacturing and financial
strategies. Identify the presence or absence of interdependences among these functional
strategies.
Is being a Benetton retailer worthwhile business? Explain.
How does Benetton gain advantage over its European competition?
Part V. Capacity Management in Service Operations
Class 6b. Capacity Management and Queuing
Objective: Introduce queuing phenomena and discuss managerial actions that mitigate queuing's negative
impact on operational performance.
Readings: MBPF: Chapter 8
The Psychology of Waiting Lines
Dialling 311 to Relieve 911’s Emergency (FYI)
Prepare: Queuing Experimentation assignment using the Excel workbook entitled q_exper.xls, available in the
course's Web page.
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Classe 7a. Applications in Services
Objective: To show how queuing theory can be used as a decision support tool in economic environments
time sensitive.
Readings: Match Supply and Demand in Service Industries;
For $19.95 a Month, Unlimited Headaches for AOL (FYI).
Prepare: Case Sof-Optics (A) considering the following questions for discussion. Prepare a short presentation
addressing the italicised question.
What are the main problems identified in the Customer Services Department? What is their strategic
relevance?
What are the main performance measures for the Customer Services Department? What is the
adequate service level for this department?
Do a capacity analysis of the Customer Service Department. How many calls per hour they can and
need to answer on average per day? And under peak conditions?
Estimate the marginal loss per year resulting from customers who give up waiting or get a busy
signal between 10:00AM and 2:00PM. Assume that the customers who give up or get a busy
signal will not call again. Clearly state any other working assumptions you may use.
What are the alternative approaches you would consider to improve service on a short, medium, and
long term? Consider alternative scheduling for the CSR's for the short term, changing the demand
profile through incentives for the medium term, and capacity expansion for the long term.
You may need to use the Excel workbook entitled Queuemmck.xls, which is available in the course's Web page.
Part VI. Quality Management
Class 7b. Quality and the Voice of the Consumer
Objective: Discuss the different notions of "quality". The first step of the strategic management of quality is to
transport the "voice of the consumer" into the design and operational specifications.
Readings: MPBF: Chapter 9 - Sections 9.1 & 9.2;
Why Improving Quality Doesn’t Improve Quality.
Case Hank Kolb, Director Quality Assurance
Prepare: Start working on your report on The Goal. Summarize the aspects that you consider most important
(what is worth to retain and remember five years from now) and critically evaluate them regarding
their value and usefulness (this is an individual task). This report will be due at the final exam date.
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Class 8a. Voice of the Process and Control Charts
Objective: The second step on strategic management of quality is to determine the "voice of the process" and
compare it with the voice of the consumer. If the present process does not satisfy the consumer
needs and desires, it is necessary to act at the management level in order to improve the process.
Readings: MPBF: Chapter 9 (to the end);
Prepare: Case Excel Logistics Services (the groups which do not present the case for class 8b have to submit
a concise report - no oral presentation).
Classe 8b. Potencialidade dos Processos & Paradigmas da Melhoria Permanente
Objective: Discutir o conceito de potencialidade de um processo e diferentes formas de induzir melhoria
permanente.
Prepare: Caso Analog Devices: The Half-Life System considerando as seguintes questões para discussão.
Preparar uma curta apresentação que responda à questão em itálico.
•
•
•
•
O que é o “Half-life system” e como é que funciona? Por que é que Ray Stata está tão interessado em
medir taxas de melhoria? Quais são os aspectos positivos e negativos do “Half-life system”?
O que acha da abordagem do cartão de registo balanceado (“balanced score card”) da Analog
Devices? É realmente útil?
A 1 de Julho de 1990, termo do programa de melhoria de processos que havia começado três anos
antes, o desempenho operacional melhorou dramaticamente. A produção líquida média (“yield”)
subiu de 20% para 51%, o fluxo médio de produção baixou de 15 para 7 semanas e a taxa de defeitos
baixou de 500ppm para 50ppm. No entanto, o valor das acções da ADI baixaram de $18.75 para $6.25.
O que causou estes sinais contraditórios de desempenho? Proponha um plano de acção para
resolver este problema.
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