1 SCHEDULE AND ASSIGNMENTS WEEK ONE – Saturday, July 7, 2018 Morning Session (9 am – Noon) Topic A: INTRODUCTION TO OPERATIONS & TECHNOLOGY MANAGEMENT Fundamentals of Process Analysis and Design: Tasks – Sequences – Flows and The ‘4V’ Model of Operations LECTURE: Concepts and Skills of Operations Management and Managers. VIDEO TAPES: Advances in Operations Management and Michael Porter on Competitive Strategy (Time Permitting) NOTE: 1.Organize 3 case analysis/presentation and Simulation Teams (I - III). 2. Fill out and hand in the student information sheet at end of Syllabus. READ: • SBJ; Chs. 1 (Read 2 times; p. 23-29) and 2 and 3 and 16 (2X p.506-511) • WE; Introduction and Chs. 1, 2, 3, [VERY IMPORTANT] • “What is Strategy” by Michael Porter (HBR, Nov-Dec, 1996) [VERY IMPORTANT] • “The Five Competitive Forces That Shape Strategy” by Michael Porter (HBR Jan 2008) • CORE READING: OPERATIONS STRATEGY • Process Fundamentals • Core Reading: Process Analysis VIEW: http//www.youtube.com/embed/8_lfxPl5ObM?rel=0 DO: Case Analysis Coach Exercise CASE PREPARATION FOR CLASS DISCUSSION: Anderson Associates (To be distributed by email) Can Anderson meet the customer’s needs? How? Can he make a profit? What is the production process/sequence? Cost? MAP THE PROCESS!! What is the MOST IMPORTANT Question Mr. Anderson must answer? What should Mr. Anderson do? [HINT: What is the difference between a ‘list’ of ‘tasks’ and a ‘process’ or a ‘plan’? What is the ‘problem’ that Mr. Anderson has to ‘solve’?] Topic B: Process Planning: Mapping and Analysis • • • • Batch vs. continuous flow vs. Hybrid Processes Batch size and set up time/cost – the “EOQ” Cycle-time, Mfg lead-time and effective capacity/asset utilization/productivity Identify the Bottleneck location/task 2 READ: • ‘An Informal Note on Knowledge Management’ by Roger Bohn (Very Important Paper! You will find his ‘Model’ useful in most cases in the course) • SCJ; Chs. 4 (very important) and 5 (Especially useful for ID Students). • Note on Work Simplification (a key skill in all situations) • How to Get a Competitive Edge • CORE READING: MANAGING INVENTORY NOTE: Most ‘Readings’ are either in the Text or the HBS Course Pack or will be sent to you via email. Cases and Articles in the HBS Course Pack are NOT in Course Session order – you may have to hunt around for the ones you need for each class. All HBR articles are available on-line from the Galvin Library. NOTE: The HBR Articles are also available FREE and On-Line from the Galvin Library. Students can access the Harvard Business Review from 1922 to 2018 from anywhere. If they're off campus, they'll be prompted to log in with their IIT account name and password, and if they're on campus they will just get access automatically. They can follow this link, or search for the Harvard Business Review on this page. SIMULATIONS: A. Do the OPERATIONS MANAGEMENT SIMULATION: PROCESS ANALYTICS (in the HBS Online ‘package’). You may work on this individually or in ‘ad hoc’ small groups; or as a Team. This is an especially useful assignment if you feel uncertain about your understanding of basic concepts such as process planning/mapping, cycle time, bottlenecks, capacity at the task vs. system level, lead time, impact of batch size, etc. Individual Hand In#1A: Summarize, and justify/illustrate the important ‘Lessons Learned’ (Ideas and concepts worth remembering) from the Process Analytics Simulation. LIMIT: 2 pages plus Exhibits (maximum). B. Project Management Simulation: Scope, Resources, Schedule V2 ASSIGNMENT: Work as Individuals to do the ‘Project Management’ Simulation. Individual Written Hand-In #1B: Lessons Learned from the Project Management Simulation. Limit: 2 Pages+ Exhibits (maximum). CASE PREPARATION FOR CLASS DISCUSSION: Kristin’s Cookie Company (A) 3 Is this a ‘good’ business idea? Why? How many cookies can she make (Capacity)? How much money can she make (Profitability)? Analyze the production process and suggest and justify (in financial terms) appropriate changes. What are the marketing issues in this case? Map the process. Where is the ‘bottleneck’? Should she buy a 2nd oven? Why? Calculate: Cycle Time, Mfg. Lead Time and Capacity for the one oven and 2nd oven options. How might the process change with a second oven? Should there be a reallocation of tasks between Kristin and her roommate? Why? Map the changes in the process. What would be the ‘ideal’ physical ‘layout’ of K’s kitchen? How might the physical layout affect the implementation of the process? What is the difference between ‘process plan’ and ‘layout and how are they related? AGAIN: WHAT ‘PROBLEM(S)’ DOES SHE NEED TO ‘SOLVE’ AND WHAT DECISIONS WILL SHE NEED TO MAKE? What should Kristin do? How much profit can she make in an Academic Year? Should she work the summer term? Afternoon Session (2 -5pm), 7/7/2018 Topic A: Process Analysis and Improvement • Impacts of Variety, Customization, Automation and Digital Technology on Task Design and Process Flows READ: • Note on Graphical Method of Linear Programming (Most important for Sherman Motor Car Case Team) • “How You Should Organize Manufacturing” by Hayes and Schmener, (HBR. JanFeb, 1978 • Core Reading: Designing, Managing and Improving Operations • Note on The Economic Order Quantity OPTIONAL FOR GREATER DEPTH: • Capacity Analysis Sample Problems In – Class Case Preparation and Team Assignments/Presentations • STONEHAVEN, INC. – TEAM I Analyze the operating system, suggest improvements and design (re-engineer?) a new/improved operation. Justify your changes by showing and quantifying the improvements in efficiency and effectiveness that your system will deliver. Why are these changes important? What are the strategic implications? How do they relate to marketing tactics and the demands of the customer/market? What business problem do you need to fix? What are the cycle times, batch sizes and manufacturing lead times for the existing system and after your improvements? Labor content? Efficiency? Productivity? Ability to support the strategy of the business? Economics and costs? (HINT: Is Stonehaven a ‘job shop’ or a ‘production line’? Why? Is it a ‘continuous flow’ or a ‘batch’ process? Or, a ‘hybrid’ of both? Why? MAP THE PROCESS) 4 Oral Presentation: 20 Min MAX B. SHERMAN MOTOR COMPANY – TEAM II What recommendations would you make to the President of SMC? Work out the economics of expanding production by outsourcing engines. Show the new production levels/mix and present the pro-forma profit and loss statement for the new – ‘optimized’ production levels. How much can SMC afford to pay for additional engines? How would you analyze the opportunity to invest in additional engine capacity? Additional body capacity? Additional assembly capacity? How do you determine the ‘value’ of ‘releasing’ a ‘constraint’? (See the Note on Graphical Method of Linear Programming) ORAL PRESETATION: Limit 20 Minutes A. EXECUTIVE SHIRT COMPANY, INC. – TEAM III Map the Process, analyze the ‘operating system’ and the physical ‘layout’; and make suggestions for improvements. Should ESC go into the custom shirt business? Why? How should they organize their custom business production and their regular product line production? Why? Should they adopt Mike’s Plan or Ike’s plan or do you have a better idea? Pay attention to cycle time, manufacturing lead time, batch size, capacity, labor utilization, quality, flow & bottlenecks, costs, timeliness, inventory and profitability. Map each process alternative. Develop a good presentation graphic to highlight the key points you want to make. What is /could be the strategy of ESC. Inc.? (Hint: Is ESC a ‘job shop’ or a ‘production line’? Why? Is it a ‘batch’ or a ‘continuous’ flow process? Or a hybrid? (Why?) ORAL PRESETATION: Limit 20 Minutes WEEK TWO: 7/14/2018 Morning Session (9 am – Noon) Topic : PROCESS DESIGN: FACILITIES and TECHNOLOGY CHOICE • FLEXIBILITY and CAPACITY; • Make to Order vs. Make to Stock READ: • SBJ; Chs. 6 (Focus on Capacity Planning –Skim the Supplement on forecasting.) and 7 (Helpful for the McD and BK cases and most others in the course. Consider the distinction between the ‘Process Design’/Task Sequence’ and the Physical ‘Layout’ of the tasks – The ‘work’ will always follow the ‘Process’; that is the sequence of tasks required to produce the product or service, no matter where the people and equipment for performing each task are physically located. to the Jones • WE; Chs. 4, 5, 6, and 7 • Note on Throughput vs. Cycle Time (Don’t confuse ‘Cycle Time’ – How often a task is performed per unit of time [Frequency]; which defines the capacity of the task[And in a multi-task process – the slowest task will define the capacity of the 5 process as a whole]: with ‘Throughput Time’ which defines how long it takes to complete a specific unit of product/service; which determines the schedule for completion/delivery. When and How might these two ‘Metrics’ be related? • Supplemental notes on McD • ‘Operations-Based Strategy’ by Robert H. Hayes and David M. Upton (CMR Vol. 40, No. 4, Summer 1998) • Note on Service Mapping • ‘Service Blueprinting’ by Mary Jo Bittner • CASE PREPARATION and FIELD TRIP ASSIGNMENTS #2 PART A: Analyze the McDonald CORP. and BURGER KING CORP. CASES – Map the process sequence and the physical ‘Layout’, identify the ‘Bottleneck’ and analyze the design, operational, and cost, differences between the McDonald and Burger King Outlets in Hillybourne; as described in the cases. How do these differences relate to each company’s method of competing in the marketplace? How well positioned are the operating systems for changes in product design or market demand? What implications do the different operating systems and technologies have for the management of these operations and their future strategies? Pay specific attention to the “man-machine” interfaces, the production rates, the Human Resource Policies and capacity vs. demand. What is the role/location of Inventory at each? How does the inventory location affect the producer – customer relationship? What is the difference between a ‘Make to Stock’ and a ‘Make to Order’ system? How does this choice affect the customer? What impact does it have on profitability? Calculate the costs and profits as a function of variation in demand level over the course (by the hour) of a typical day. What happens? Why? What are the implications for the business strategy? (Hint: Map the processes at each. Work the numbers-capacity, WIP, cycle time, cost and profits). How do costs and profits vary at each with the hourly variation in demand? Discuss the implications of grill vs. broiler technology and ‘make-to-stock’ Vs ‘maketo-order’ operations strategy decisions. How does the location of inventories affect the productivity and flexibility of each process? PART B: THE McDonald’s FIELD TRIP: In 2001, and again a few years later, McD’s made major changes in their operations process and layout. Recently, they announced another set of changes in both process and Menu and in their ‘Business Model’. Use the McD Supplemental ‘Handouts’ plus search the Internet for upto-date information to understand and analyze the series of ‘NEW” process designs. Visit one or more McD’s and identify and analyze the process in use. Interview the manager if you can and observe the operation. Map the process and the ‘layout’. Take photos or a video if allowed, or make a sketch. How does it differ from the “old” system described in the case? (Batch vs. Continuous Flow; Job Shop vs. Production Line; Make-to-Order vs. Make-to-Stock; Fixed vs. Variable Costs, Human resource Management; Technology & Process Design; Etc.?) Is it better? How? Why? 6 Diagram (map) the process and the layout. Use Google to find more recent articles/videos about the changes at McDonalds since 2001. How have these more recent process and product innovations changed the 4 V’s and the capability for service speed, customization, new product introduction and profitability? Evaluate the economics of the system? What are the competitive advantages of the new system vs. the old system? Was the change a good idea? Why? What happens next? Why has McD’s undergone so many process and product and ‘Business Model’ changes since 1980 and 2,000? PART C: FIELD TRIP TO A DIFFERENT RESTAURANT: Choose a rival to McD’s or an entirely different kind of Restaurant and do the same analysis as above for the McD visit. Each Team must choose a different venue to visit. TEAM CLASS PRESENTATIONS: (NOTE: No Written Paper Required.) Note: Please feel free to use the Internet to find information about more recent events and Executive Actions at McD and use this information in your presentation. Discuss the results of your analysis of the ‘old’ McD and BK Cases; then describe, analyze and discuss the ‘Operating System’ at the ‘NEW’ McDonalds and at the ‘Other’ Restaurant. How is the current ‘Process System’ at McD’s different from the ‘Original’ system described in the cases written about the Hillybourne McD’s and BK in 1980? Is it better than the ‘old’ system? HOW? WHY? (Process Map, Layout, Facilities, $ V’s, Flows and Stocks of materials and People, Product Design, Role of the Customer, Cycle time and Capacity, Lead time, etc.) (HINT: There is a lot of information on McD on the Internet.) How is the ‘Other’ Restaurant you visited similar or different as compared to McD’s (and if you wish, BK)? What did you learn from this ‘Other’ venue visit? What does your comparison of the old and new systems and McD vs. its rivals or other facilities teach us about Process Design and Operations Strategy; as they relate to Business Success and the concept of ‘Sustained Competitive Advantage’? (Pay particular attention to the location and role of ‘Inventory’.) How might McDonalds further improve its current (2016) ‘operating system’? What impacts would you expect your suggested improvements to have on McD’s PROFITABILITY? Based on your analyses of the Old vs. New McD and what you learned from the BK case and your visit to the ‘Other’ restaurant: Make one or more recommendations for change/action to the CEO of McDonalds. Justify your recommendation with analyses and evidence and suggest how this change will improve McD’s ‘Competitive Advantage’ and profitability. LIMIT: 30 Minutes (Maximum). Practice and Edit your Presentation HAND-IN: a COPY OF YOUR PPT SLIDES. OPTIONAL INDIVIDUAL EXTRA CREDIT PAPER #1: What did you, personally, learn from this assignment, including the case analyses, the field trips and your experiences working in your Team? (Limit: 3 Pages – double spaced- plus Exhibits) Afternoon Session (2 – 5 pm) 7/14/2018 7 Topic A: PROCESS IMPROVEMENT • JOB and TASK DESIGN • TIME STANDARDS • PRODUCTIVITY IMPROVEMENT, • Vertical Integration and ‘Make or Buy’ Decisions READ: • SBJ; Ch 9 (+ Supplement) and 10 and 4-7 (review) • BLURRING THE BOUNDARIES by Goldhar and Berg • “Fix the Process, Not the Problem” by Sirkin and Stalk (HBR, July-Aug 1990) • Comments on Standard Times and Division of Labor [Very Important] • WE, Ch. 8 • ‘Lessons in the Service Sector’ by James L. Heskett (HBR March 1987) • Coordination – An Overview CASE PREPARATION and TEAM Class ASSIGNMENTS A. Team I: AMERICAN CONNECTOR CORP How should ACC respond to the potential entry of DJC into the U.S. market? Simulate DJC’s costs in the U.S. Analyze ACC’s and DJC’s cost structure and performance. WORK THE NUMBERS! What should ACC’s future Strategy and Operations be?(HINT: Consider costs due to “strategy” vs. costs due to “operations”). TEAM PRESENTATION AND HAND-IN: Your Analysis and Action recommendations. How should ACC respond to the JCC ‘Threat’ and how urgently should they do it? Why? Oral Limit: 20 minutes – 8 slides (max) B. Team II: FABRITEK CORPORATION- 1992 Analyze the production process (es) at Fabritek. (Carefully analyze exhibit 2). Why is Arthur Moreno unhappy? Why is the Pilgrim order in trouble? What is the cause of the “sudden” increase in poor quality work? What can/should be done to get the order out? To make Moreno “happy”? Are there any ethical issues involved? What are they and why? a. What should Frank Deere do? b. What should Stewart Baker do? c. What are the underlying causes of “symptom” we see at Fabritek? d. Is this a ‘problem’ that should be brought to the attention of the General Manager of Fabritek? Why? TEAM PRESENTATION AND HAND-IN: Your Analysis and recommendations to Frank Deere and Stewart Baker for improving productivity. Oral Limit: 20 minutes – 8 slides (max) 8 C. Team III: Bergerac Systems: The Challenge of Backward Integration What are the Business and Operational Challenges facing Bergerac? Should they integrate backwards into the manufacture of injection-molded parts? If so, how? Analyze the economics of ‘make or buy’ and ‘in-house’ capability development vs. acquisition. What other advice would you offer Ian Wycoff about his manufacturing operations? About his Business? TEAM PRESENTATION AND HAND-IN: See above questions. Oral Limit: 20 minutes – 8 slides) max) Topic B: (Time Permitting) LECTURE AND DISCUSSION: • The STS Model and Worksheet • Introduction to SocialTechnicalSystems Analysis CASE: Dashman Company (To be sent by email) Explain the behaviors observed at Dashman Company. What are they doing? Why (Root Causes) are the people behaving as they are? (Use the STS Model and concepts in the Goldhar/Finan Note. See under ‘READ’ for Week Three below)) WEEK THREE: 7/21/2018 Morning Session (9 am – Noon) Topic A: HUMAN BEHAVIOR, ORGANIZATION DESIGN and CORPORATE CULTURE in OPERATIONS MANAGEMENT READ: • Notes on Organization Theory and Design for Operations Management (Goldhar and Finan) and/or Revised STS Note by Lauritsen • George Homans, ‘Exchange Theory’ article (to be emailed) • Note on Organization Structure (HBS) • What is an Organization’s Culture? (HBS Note) • ‘Organigraphs: Drawing How Companies Really Work’ by Henry Mintzberg and Ludo Van der Heyden (HBR Sept. 1999) • Note on Power, Dependence and Effective Management • The Economics of Organizational Architecture [VERY IMPORTANT] • TAPES: The nature of Work CASE PREPARATION FOR CLASS DISCUSSION A. THE SLADE PLATING DEPARTMENT 9 If you were Ralph Porter; would you ‘blow the lid off’ the ‘punch out system’? Why or Why Not? Use the STS model and worksheet to ‘map’ and analyze the behavior of the individuals and small groups of workers in the Plating Room. What is happening? Why do they behave as they do? What are the ‘observed’ types and ‘patterns’ of behaviors? What are the underlying ‘causes’ of these behaviors? What are the formal and informal ‘rules’ (‘norms’) that the individuals and small groups follow? Why do some individuals ‘join’ groups while others don’t? What do they get out of group membership? What do they give? What is the impact of the production process, technology and layout on the behaviors of individuals and groups? What are the ‘6R’s (Rules/Roles/Relationships/Responsibilities/Resources/Rewards ) at Slade? Are there ‘formal’ vs. ‘informal’ ‘R’s’ at Slade? How do they differ? What is the ‘culture’ of the Slade Company as a whole? Of the Plating Room? Of the Sarto Group? Are they different? If so, WHY? What are the ‘personalities’ of the individuals? How do personality and culture interact? Is the behavior pattern of the ‘Sarto Group’ good or bad for the firm? Why? What are the ‘results’ of their behaviors? What is their impact on the profitability of the Slade Company? How does the ‘Sarto Group’ impact the behavior of other individuals and groups? (How) should Ralph Porter try to change it? What might be the results of such an effort? Be predictive!! Recommend a course of action to R.P. Finally, consider the ethical issues. What are they? Would you want to work in the Sarto Group? The Slade Company? As a Manager? As an Owner? Why/Not? Have you had any personal experiences similar to the organization and behavior of the Slade Plating Room? What, if any, changes would you make in the organization structure and/or the operating system of the Slade Plating Department? The Slade Company? B. Understanding Communications in One-on-One Relationships Be prepared to ‘Role-Play’ in Class! TopicB: ‘FRONT LINE’ MANAGEMENT CHALLENGES (The Interface of Operations, Organization Structure and Leadership) READ: • What it Really Means to Manage: Exercising Power and Influence • ‘Managing Your Boss’ by Gabarro and Kotter (HBR Jan. 2005) • Note on Organizational Effectiveness • Building Effectiveness in One-on-One Relationships • ‘Six Basics for General Managers’ by Andrall Pearson (HBR July-Aug. 1989) [VERY 10 IMPORTANT] CASE PREPARATION FOR CLASS DISCUSSION C. NUCLEAR TUBE ASSEMBLY ROOM (A) And PROCESS ENGINEERING PROPOSAL Is Ralph Langly a ‘good’ manager? Why? What does he actually do? Is the NTA room an effective organization? What are the behaviors and structural variables that help produce such high productivity and satisfaction? Why do the NTA Room workers behave as they do? What are the ‘norms’ of the room? Why? What do they get out of it? What needs are being met? How? What is the impact of the process design, layout and product design of the NTA room workers’ behaviors? How different are the formal and informal organizational structures? What accounts for the improvements in productivity? Is the improvement ‘sustainable’? What needs to be done next? What about Harold Singer? What is his role? What are his motivations? Why? Is his behavior ‘functional’ (positive) or ‘dysfunctional’ (negative)? Why? Any advice for him? Read and evaluate the PROCESS ENGINEERING PROPOSAL. What impact will it have on the NTA workplace? Productivity? Satisfaction and Morale? Why? What should Neil Goodrich do? Why? What should Ralph Langly do? Why? (HINT: reconsider the issue of what are the rewards of working in the NTA room?) How will the Socio-Technical-System of the NTA room change? Will this be positive or negative for the workers, for the firm, for Ralph Langley? Is there a ‘conflict’ between the needs of the workers and the needs of the firm?’ If so, can this conflict be solved? How? INDIVIDUAL HAND IN#2: Discuss the above questions on the NTA room and the Process Engineering Proposal. Is the process change necessary for the firm? If so, how should it be introduced and implemented? What should happen to the current workers and to Ralph Langley? Can Ralph manage the ‘new’ system? What should be the roles of Ralph Langley, Herb Singer, Neil Goodrich and the current NTA room workers if the change is deemed needed? Finally; would things have been different in the NTA room if ‘Ralph’ had been ‘Rachael’? In what ways? How might the implementation of the PEP proceed differently? (Hint: do the STS Worksheet and analyze the ‘5 R’s’ for before and after the PEP. How do they change/differ?) LIMIT: 3 PAGES + EXHIBITS Afternoon Session (2 pm – 5 pm) 7/21/2018 Topic: OPERATIONAL EFFECTIVENESS AND ORGANIZATION 11 STRUCTURE READ: • ‘Flaw of Averages’ (VIP!) • The Psychology of Waiting Lines • Identity Issues in Teams • A Note on Team Process • WE; Ch. 8 (review) and Ch. 9 • ‘What is an Organization’s Culture? (HBS Note) OPTIONAL FOR GREATER DEPTH: • Framework for Analyzing Work Groups CASE PREPARATION and TEAM ASSIGNMENTS #4: A. TEAM I: THE ARMY CREW TEAM What is the difference in this case between the ‘Team’ and the ‘Boat’? Are they ‘job shops’ or ‘production lines’? Why? How is it possible for a team or a boat to ‘less than the sum of its parts’? Analyze the situation in terms of the S-T-S and ‘5 R’s’models. Explain what is happening on the Varsity and the JV teams and in their competition with each other vs. other schools? What can/should the Coach do? How does being a Coach differ from being a Manager (and vice versa)? How is their behavior and results affected by the culture of the United States Military Academy? How does the Army Crew Team differ from the Slade Plating Room and the NTA Room? What are the similarities? TEAM ASSIGNMENT: ORAL PRESENTATION - 30 Minutes maximum. Written Team Paper: 5 Pages + Exhibits and Slides (max). B. TEAM II: MOUNT EVEREST – 1996 Why did this tragedy occur? What is the ‘root cause(s) of this disaster? Why did the participants behave as they did? Are tragedies like this just inevitable on Mount Everest and similar environments – or could some of the lessons of Operations and Supply Chain Management be helpful (Be specific)? What is your evaluation of Scott Fischer and Rob Hall as leaders? Were they ‘Managers’? Should they have been? What are the lessons for Operations Managers? Can you compare Mount Everest in 1996 to a business situation? (Try to use both Operating systems concepts and S-T-S theory to develop your analysis and recommendations.) What changes would you make to the Operating System and the Organizational Structure to increase the ‘profitability’ of the ‘Climbing Mt. Everest Business’? Can it be scaled up? TEAM ASSIGNMENT: ORAL PRESENTATION - 30 Minutes maximum. Written Team Paper: 5 Pages + Exhibits and Slides (max). 12 C. TEAM III: ZIPCAR: INFLUENCING CUSTOMER BEHAVIOR What ‘business’ is ZIPCAR in? What are the critical operational factors for success? How can ZIPCAR organize it operating system to deliver the critical factors? What does it mean for operational effectiveness when the customer is part of both the operating system and eh socio-technical-system? How can/should ZIPCAR ‘manage’ the behavior of its customers? What changes in operations strategy/process design and organization structure would you recommend to ZIPCAR? TEAM ASSIGNMENT: ORAL PRESENTATION - 30 Minutes maximum. Written Team Paper: 5 Pages + Exhibits and Slides (max). OPEN CLASS DISCUSSION: THE REDGROVE AXIAL WORKSHOP Use the STS Framework AND THE ‘Maslow Hirearchy of Needs’ to analyze the situation at Redgrove. What is going on? Why? What are the ‘Root Causes’ of the observed behaviors? How ‘Big’ a ‘Problem’ is this? Why? Does it affect the ‘effectiveness’ of the Axial Workshop Team? Does that matter? How does the Workshop ‘Operate’? What is its ‘Culture’? Would you want to work in this organization? Why/Why not? What might happen if the current behavior is ‘forbidden’ or ‘punished?’ What would YOU do if you were Marc Fontaine? Why? Have ever personally experienced a similar situation? What can we learn from our experience? What should Marc Fontaine do? Remember, He also has personal goals and objectives! How well are the needs/goals/objectives the Firm, the Workers and Fontaine ‘aligned? What is the impact of the alignment of the needs of all the ‘Players’ on the effectiveness/profitability of the organization? WEEK FOUR (7/28/2018) Morning Session (9 am – Noon) Topic A: Review of ‘Industrial Engineering Basics’ in Operations Management (Process Design – Inventory – Productivity) READ: • SBJ Ch. 11 (Important for the next several classes/cases.) OPTIONAL FOR GREATER DEPTH: • CORE READING: Managing Queues • ‘Fast Cycle Capability for Competitive Power’ (HBR) • ‘Fix the Process, Not the Problem’ (HBR) (again!) • ‘Just in time Production Controlled by Kanban’ (HBR) 13 Simulations and Exercises: Do the: Operations Management Exercise – Inventory Basics Be prepared to report on ‘Lessons Learned’ in Class. CASE PREPARATION and TEAM ASSIGNMENTS A. TEAM I: OPHTHALMIC CONSULTANTS of BOSTON and DR. BRADFORD J. SHINGLETON What should OCB do? WHY? What does BJS do that works so well? How can he and OCB get others to join in? Should all the MD’s emulate BJS? Why/Not? What is (should be) the strategy of OCB? How does the operations system support/implement the strategy? (Work the Numbers!) ORAL ONLY: 20 minutes max. Turn in Copy of Slides B. TEAM II: CHAIRCRAFT CORPORATION, 1988 What are the major problems in controlling frame parts manufacture? Why? What overall changes in the production process and its control would you suggest? Why? What should Mr. Johnson do next? Why? What business are they in? How do the market trends in the business affect the design of the operating system? (Consider make-to-stock vs. make-to-order and contrast to the McD/BK cases.) (Hint: Review the Notes on Production Inventories and on EOQ) Pay particular attention to the location, amounts and role of Inventory in this process. ORAL ONLY: 20 minutes max. Turn in Copy of Slides C. TEAM III: CRP Products What recommendations for changes should Bruce Ballantyne make to Jamie Bailey? Why? ORAL ONLY: 20 minutes max. Turn in Copy of Slides D. JONES MANUFACTURING COMPANY (Non HBS Case – Open Class Discussion) Design a production process and physical layout/organization of resources that will allow JMC to meet the demand for Part No 5324-B2. (Is the new order a ‘strategy’ change for JMC?) Show/map the process and physical layout. What are the total costs in your system? (Fixed vs. Variable) What is the impact of total volume/time horizon on your operating System design and cost structure? Map the old and new processes. Are they a job shop or a production line? Why? Is it a ‘batch’ process or ‘continuous flow’? Why? Should Jones have accepted the order for Part No. 5324-B2? Why? Did they have choice? (Hint: How does the volume/variety of the new order affect the choice of process and layout? Why?) 14 Individual Written Assignment #3: Summarize your analysis. Describe, and justify, your solution to the ‘problem’ at Jones. Limit: 3 – double spaced – pages + exhibits. (HINT: Back to ‘Basics’!) Afternoon Session (2 – 5 pm) 7/28/2018 Topic B: PROCESS DESIGN: CAPACITY/DEMAND BALANCE BUSINESS STRATEGY – CREATING THE ‘FIT’ READ • W/E; Chs. 11 • ‘Why Some Factories are More Productive Than Others’ (HBR) • “Lessons from the Service Sector” by Heskett (HBR) [Very Important] Simulations and Exercises: a. Do the Operations Management Exercise: Balancing Process Capacity b. Do the Operations Management Exercise: Push vs. Pull Production c. Do the Operations Management Exercise: System Utilization in Service Management Be prepared to discuss ‘Lessons Learned’ from all 3 ‘Exercises’ in Class. CASE PREPARATION for CLASS DISCUSSION A. B. DONNER COMPANY - Analyze and “map” the Process: materials and information flows, bottleneck, cycle and lead times, etc. and determine the underlying ‘problems’ (as compared to observed ‘symptoms’) facing Donner and suggest specific actions to Mr. Plummer. (Hints: Pay special attention to the distributions of events, orders, and materials, etc. as shown in the exhibits.) Is Donner a job shop or a production line? (Or something else?) Is it a ‘Factory’ or a ‘Service’ operation? Why? What is the impact of batch/order size on capacity/bottlenecks? What business is Donner in? What do they have to do well for success in that business? Why? How does this affect the design of the operating system? NOTE: Stay with technology available at the time of the case. ENGINEERING INSPECTION and INSURANCE COMPANY- What are the most critical underlying “problems” faced by EIIC at the time of the case? How serious are they? What should Ernest Cole do? Why? In what sequence? Compare and contrast EIIC with Donner Corp. Same questions apply. Is EIIC a job shop or a production line? Batch or continuous flow? Factory or Service operation? Hint: Analyze and Map the process. Calculate the cycle time/capacity, identify the bottleneck, and calculate the lead-time. How should they measure productivity? Where is the bottleneck? 15 Is this a continuous or a batch flow shop? Are they organized as a “production line” or a “job” shop/process? Why? What is their ‘capacity’: a. For underwriting Policies? B. For performing Inspections? INDIVIDUAL WRITTEN HAND-IN #4: Prepare an ‘integrated’ analysis of the above two business situations? How are the two similar/different? How do DONNER and EIIC compete in their respective markets? What businesses are they in? Do they produce ‘goods’ or ‘services’? Are they ‘Factory’ or ‘Service ‘Operations??? Job Shops or Production Lines or? Who is their customer? What problem do they solve for the customer? How well are they doing? What are the major trends in their Industries? Analyze and discuss the key managerial, organizational, operations, and strategic problems and choices at each. How are they ‘organized’ to execute their operating system? What are the most important short-term operations actions to take? What should EIIC and DONNER management do over the long term to position their companies for further growth and success? (Hint: For each case; Map the process. Analyze the layout/organization of resources. Calculate cycle time & Lead time & capacity and productivity? Where are the bottlenecks? What are the causes of the bottlenecks?) WHAT ARE THE GENERALIZABLE LESSONS TO TAKE AWAY FROM THE ANALYSIS OF THESE TWO CASES? (HINT: pull back a take a high level General Management point of view after you have mastered the operational and organizational details.) What do we learn from the similarities/differences of their ‘problems’ and appropriate solutions? MAX LIMIT: 4 Pages + Exhibits (note: CONSIDER THIS THE EQUILAVENT OF A TAKE HOME EXAM) NOTE: You may - and should - discuss these cases with your study team; but please write the papers individually. If you choose to use an exhibit that was prepared by/with someone else or by your team; be sure to reference the same and note that the analysis is “shared” work. C. ZARA: FAST FASHION What are the distinctive features of ZARA’s operations strategy that support its business strategy? How? Work the numbers! Compare ZARA to an ‘average’ retailer with similar posted prices. (Assume that the retail price is twice the manufacturer’s selling price to the trade.) What are ZARA’s advantages and disadvantages? How are ZARA’s operational and strategic ‘choices’ linked together to support its quick-response capability and to create sustainable competitive advantage and overall long term profitability? Are there any ‘weaknesses’ in ZARA’s system – any challenges to continued growth and increasing profits? How should ZARA grow? What recommendations would you make to Inditex CEO Jose Maria Castellano? WEEK FIVE: 8/4/2018 Morning Session (9 am – Noon) Topic: Operations Planning & Control: Capacity Planning and Inventory Management 16 • Forecasting Demand/Make to Stock • JIT/Make to Order • Technology’s impact on capacity and productivity • Role of Inventory in Process Design • Factory vs. Services Operations READ • SBJ; Chs. 12(See especially p. 379-386) and 15 (very important) and 11 (review) and 6 (+ supplement on Forecasting) • Coordination – An Overview (Review ) • Core Reading: Supply Chain Management OPTIONAL FOR GREATER DEPTH • • • • Just –in –Time Controlled by Kanban Process Based Capabilities: A Principal Focus of Operations Management ‘The Triple A Supply Chain’ by Hau Lee, HBR SBJ Ch. 14 and 14 CASE PREPARATION and Team ASSIGNMENTS A. TEAM I: FoldRite Furniture: Planning to Meet a Surge in Demand What action recommendations would you make to Martin Kelsey in February 2010? Be specific and provide analytical support for your recommendations. These recommendations should also be suitable for presentation to the upper management of FoldRite. Hint: Analyze the options and create an Aggregate Plan for production and inventory to meet anticipated demand for the next 6 months. What happens after that? Consider both immediate production management and longer term strategic issues. TIME LIMIT: 20 Minutes PAGE LIMIT: 5 Pages + Exhibits B. TEAM II: The Morrison Company Identify and analyze the operations ‘problems’ (remember the distinction between ‘observed symptoms’ and ‘underlying causal problems’) occurring at the Morrison Company. Explain the differences between the production processes for the pharmaceutical product line compared with those of the retail product line. Why are they different? What action recommendations would you offer Shauna Breen to address the underlying causal issues you have identified and how will these actions/changes affect ‘results’? Be specific about any policies or organizational changes you propose. (Remember S-T-S and the ‘5 R’s”) TIME LIMIT: C. 20 minutes PAGE LIMIT: 5 Pages + Exhibits (Max) Team III: SCHARFFEN BERGER CHOCOLATE MAKER Analyze the proposal to acquire the ‘ball mill’. [NOTE: WORK THE NUMBERS!!!] What are your conclusions? As Jim Harris, would you proceed with the implementation of that change? How? Analyze the production process? What problems does it have? (Hint: where are the 17 bottlenecks and what is their cause?) For calculations purposes; assume that all the production is semi-sweet (62%) chocolate. What changes beyond the addition of the ball mill will you need to increase your capacity by 150%? Given your strategy to increase capacity; what expansion step(s) would give you the greatest concern? Why? What should Jim Harris do? How might the expansion ‘strategy’ affect the quality of the product? TIME LIMIT: 20 MINUTES Exhibits (Max) PAGE LIMIT: 5 Pages + OPEN CLASS DISCUSSION: HANK KOLB What should Hank Kolb do? Immediately? Over the longer term? What are the observed “symptoms” verses the sources/causes of quality “problems” in this production process? Differentiate and integrate technical, organizational and human behavior problems. How should he go about establishing his authority and developing other’s support for his actions? How did the situation get this bad? What are the ethical responsibilities of the various individuals? Of the firm? Can Hank use ideas of “ethics”, “fairness”, “right vs. wrong”, etc., to make his point? (HINT: Map the process) and do a “fishbone” diagram) Afternoon Session (2 – 5 pm) 8/4/2018 Topic: MANAGING OPERATIONS : Scale-Up and Quality Control READ: SBJ, Ch. 17 and 18 • The Four Things a Service Business Must Get Right’ by Francis X. Frei, HBR April, 2008 • ‘Discovering New Points of Differentiation’ by MacMillan and McGrath (HBR Jan. 1997) • ‘Breaking the Trade-Off Between Efficiency and Service’ by Francis Frei (HBR, Nov 2006) OPTIONAL FOR GREATER DEPTH: • ‘Will You Survive the Services Revolution?’ by Uday Karmarkar (HBR, June 2004) • ‘My Week at the Ritz’ by Paul Hemp (HBR, June 2002) • CORE READING: Managing Queues • • • ‘Power, Dependence and Effective Management’ by John Kotter (HBR July-August 1977) Building Effective One-on-One Relationships ‘What Effective General Managers really Do’ by John Kotter (HBR March 1999) 18 • • ‘What Leaders Really Do’ by John Kotter (HBR Feb. 2000) CORE READING: Managing Quality With Process Control Simulations and Exercises: A. Operations Management Simulation: Quality Analytics Work as Individuals to do the Quality Analytics Simulation. Individual Written Assignment: ‘Lessons Learned’ about Quality Management. LIMIT: 2 – double spaced - page + Exhibits. ‘ B. Do the Operations Management Exercise: Multiple Server Queues Be prepared to discuss ‘Lessons Learned’ in Class C. Global Supply Chain Management Simulation V2 Work in Teams (I-III) to do the Global Supply Chain Simulation. Written Hand In: Lesson Learned about Supply Chain Management. How is it similar/different compared to the single facility situations we have seen in the cases thus far? Team Hand-In: Limit: 3 Pages + Exhibits CASE PREPARATION and Team ASSIGNMENTS A. Team I: Class Presentation and Written Hand In Playa Dorada Tennis Club Analyze the demand for tennis and the options facing Doug Hall. What is his “dilemma”? His goal? Develop and justify short and long-term capacity plans for the tennis operation. How does the tennis capacity decision affect the profitability and long-term strategy of the Tennis Club? How does it affect the overall Playa Dorada Resort business? Be prepared (have an overhead) to present your analysis of the demand for tennis at Sea Pines and your recommendations for action. Be specific and support your decisions with appropriate economic analyses. What is the impact of ‘seasonality’, weather, time of day and annual growth rate on Doug’s plans and the potential profitability of PD Tennis and the PD Resort as a whole? What operations policy and business strategy decisions and marketing recommendations would you make to the CEO of Sea Pines? To John Baker? (Consider future demand growth, pricing, profitability and marketing tactics.) HINT: Consider the monthly variation in demand vs. capacity. Don’t confuse operating costs & revenues with investment costs. TIME LIMIT: B. 20 MINUTES TEAM II: Class PRESENTATION AND WRITTEN HAND - IN CORNING GLASS WORKS – THE Z GLASS PROJECT 19 What is at stake in the Z Glass Project? Why is this project important to the future of Corning Glass? How can a manager reconcile “science” with “experience”? Should Mac Tavish be fired? Would that be “fair”? Why? What should Davidson do? Hint: Think about what you learned in Organization Behavior! Hint: Review the Roger Bohn article from Session One. TIME LIMIT: 20 Minutes EXHIBITS C. TEAM III : CASE PRESENTATION AND WRITTEN HAND – IN THE RITZ- CARLTON HOTEL COMPANY What ‘Business’ is R-C in? What is the essence of the R-C experience? How does the R-C create ‘Ladies and Gentlemen’ in only 7 days? How often can it do that? What are the critical operational and strategic choices that link together to give R-C a sustainable competitive advantage? Is R-C a ‘job shop’ or a ‘production line’? Why? (Is the start-up of a new R-C a ‘Job Shop’ or a ‘Production Line’? Why?) How should James McBride respond to Brian Collins’s request that he lengthen the training period for his hotel? Why? Should he consider any changes in the hotel opening process? If yes, what should he change and how should he go about doing it? TIME LIMIT: 20 MINUTES OPEN CLASS DISCUSSION THE LINCOLN ELECTRIC COMPANY Analyze and describe Lincoln’s approach to the organization and motivation of their employees? What exactly do they do? What are the underlying ‘economics’ of their ‘system’? Why does it work? Could it work at any/every other firm? Why/Why not? What role has the approach played in the firm’s business success or the past decades? How does the production process relate to the HR policies and to the firms business strategy? (Hint: consider the economics as well as the social and cultural factors of the ‘system’.) Will the Lincoln ‘system’ continue to st work in the 21 century? What are its weaknesses? Can it withstand globalization? Employee diversity? Which of the other firms we have studied in this course might the system work at and where would it most likely be a failure? Why? What about in your firm/employer? Individual Written Assignment#: Analyze Lincoln Electric. Why does their ‘system’ work? Is it ‘sustainable’? Why? What have they done in Economic terms to the structure of the organization and to their financial and cost structures? To their production processes and technology? Limit: 3 pages + exhibits/graphics FINAL ASSIGNMENT: INDIVIDUAL WRITTEN HAND IN Write me a memo! What have you learned in this course? Compare and contrast the cases and Readings to establish the most important lessons you have learned from them. Which 20 cases and readings (text and articles and ‘notes’ were the most ‘powerful’ in your learning process? How has/will the ideas in this course change your behavior? What parts of the course were most important to you? Why? What could I do to improve the learning experience? What changes would you suggest in this course? LIMIT: NONE + EXHIBITS - Memo Due via email by 6 pm on Saturday, August 11, 2018 SUGGESTION: THINK MORE, WRITE LESS! The better burger battle Team II 07.14.2018 Jacob’s onion story 2 The results of “old” McD and BK cases BURGER KING McDONALD’S Customize burger More variety and menu choices Make to Order - create and deliver to order Produce burgers at fast pace, no customization Standardized process Make to Stock - create to stock Adapt to market demand Mass produce using historical volumes Cross-trains continuously during slow periods Most training done on the job Inventory moves from back of store, to front, to the customer. Customer is unaware of this process, not in plain sight. Make-to-Stock inventory can create overstock and loss of inventory due to waste. 3 Operational Metrics of the Hillybourne, MA Stores (June, 1980) 4 Pricing Comparison of the Hillybourne, MA Stores (June, 1980) 5 June 1980 Store Comparison Gross Sales (USD) Burger King McDonald's $56,681.00 $95,524.80 6 The competitive positions of Original and New System Conformance Quality Price Specification quality McD’s original relative market position McD’s current relative market position Variety/ customization Speed 7 McDonald’s Current Strategy (in the US) Digital experience ● McDonald’s mobile ordering and payment app is the leading quick service app in number of downloads and daily users (slightly outpacing Starbucks) (Fuller 2018) Experience of the Future ● By 2020, all McDonald’s in the United States will be equipped with digital ordering kiosks - the result of rising labor and commodity costs combined with flat pricing (Cheng 2018) 8 McDonald’s Current Strategy (in the US) Delivery ● McDonald’s partnership with UberEats has been part of recent increased revenue (and represents 9% of all restaurants on the Uber platform) and is expected to grow as service expands (Wong 2018). Fresh Beef ● For its quarter-pounder sandwich, McDonald’s switched to using fresh beef in all of its stores in 2018. This represented new configurations and training for kitchens and staff as well as a $60 M supply chain rehaul. All for shifting consumer tastes and a 20-40 second quicker cook time (Whitten 2018). 9 Portillo’s ● ● ● ● ● Local chain founded in 1963 Currently has 58 locations Some locations also house Barnelli’s Pasta Bowl, which have separate ordering processes Menu items are mostly made to order, unlike McDonalds and Burger King Unique drive thru experience - customers order and pay before even reaching service window 10 Recommendations ● ● ● ● ● ● Service Differentiation Cost Reduction Personnel Differentiation Integrated Promotional Mix Product Augmentation International Expansion 11 Fabritek Corporation Team II 07.14.2018 Fabritek’s problem Before Moreno ● On average, Febritek machinists performed at about 133% Moreno ● Produced 167% of standard but poor quality Overview ● The contract with Pilgrim required delivery 17,000 units of a critical engine for six months. 650 each friday ● After the second shipment, CEO assigned Arthur Moreno to replace the milling machines operator (who involved in a accident) ● The high scrap rate in milling department. 38 pieces were rejected 2 Process Map 1 Unpacking & visually inspect purchased casting WHY IS PILGRIM IN TROUBLE? 2 3 4 Mill cut 1: Rough--mill the bearing surface Mill cut 2: Finish--mill the bearing surface Mill cut 3: Mill the face Moreno producing high quantity but low quality product. Producing at such a high pace, others unable to keep up. 5 Mill cut 4: Mill the keyway 6 7 8 Drill eight holes Finish-grind the bearing surface Final inspection & pack Created bottleneck. Clark spending extra time fixing Moreno’s mistakes. SHIPMENT DELAYED 3 100 standard performance Analysis Evidence of Moreno’s unhappy? -$645/week previous job at 133% -$522.42/week new job at 133% Moreno needs to perform at about 164.2% of standard to get the same weekly payment. Total Cycle Time-167 performance Mill cut 1: 3.594 mins*100/ 167 = 2.152 mins/piece Mill cut 2: 2.964 mins*100/167 =1.775 mins/piece Mill cut 3: ● Produced 167% of standard but poor quality 3.301 mins*100/167 =1.977 mins/piece Can we go with 167? Total Cycle time=Machine time+External time ● ● Standard: 11.548 mins per piece On average 133%: 8.71 mins per piece 11.548-8.71=2.8383.226 (external time) Mill cut 4: 1.725 mins*100/167 =1.033 mins/piece 4 Recommendations Short-term: get one more person to help Clark fix the mistakes from Moreno so they can get caught up. Have a conversation with Moreno to slow down and focus on producing quality products instead of meeting a quota Long-term: Process schedule should include a realistic timing for the cutter to produce quality product instead of working towards a large amount that can’t be used. 5 Chaircraft Corporation, 1988 Team II - 07.28.18 Overview Chaircraft Corporation: ❖ A manufacturer of upholstered chairs, platform rockers, and recliners. ❖ It sold its products nationwide through of 10,000 dealers. ❖ It clocked annual sales of $60m during fiscal year 1988. ❖ It had 700 workers. Manufacturing Operations ❖ It was an integrated manufacturer. ❖ Chair’s 3 main components: the frame, upholstery, cover fabric ❖ 3 processes: ➢ Lumber preparation ➢ Frame parts production ➢ Assembly ❖ There are 7 assembly lines ❖ 2.5 Acres (Undried Lumber) =108,900 sq feet Problem ❖ 1 lumber load is 12’ *12’ =144 sq feet ❖ Total lumber loads = 108900/ (12’*12’) =756.25 ❖ Inventory carrying cost =25%*$0.45=$0.1125 Lumber Inventory ● unit cost price, $0.45 per foot lumber) The company keeps a high inventory of lumber. it ❖ Total cost for the lumber loads for 6 months= 756.25*20,000(board-feet)*$0.45 = $6,806,250 stocks a 6 month outdoor storage, increases ❖ Total Annual Inventory Cost = $6,806,250 *25% the inventory cost. ● per foot (the inventory holding cost is 25% per Reasons to hold the inventory: safeguards itself; transportation cost * 2 = $3,403,125 ❖ Comparing its annual sales $60 Million, the inventory cost is 5.7%. ❖ Consider to find another supplier, outsourcing the lumber storage Planning Time cycle Problem Frame Parts Order ● Planning Time cycle ● Major problems of the frame parts order (current planning cycle time) ❖ Batch shipping plan was released only on Friday. ❖ Two parts reduced the lead time/the delivery date delayed: ➢ The upholstery assembly began 2 days before Planed Shipping date. ➢ Frame assembly began 2 days before final assembly. Major problems of the frame parts order ❖ The slow and inefficient planning cycle time, which increased the possibility of a part not arriving to next assembly process at the expected time. ❖ Further, it will be difficult to finish the chair on time. ❖ Consider: instead of releasing every Friday, managers can issue the order every day. Try to increase the lead time of frame part. Process Map Business Context Remember this case? ● Production line ● Batch system ● Made-to-Order Market Trends and the Operating System ● ● ● ● Standard design capacity and defined processes for the initial preparation of chairs Multi-stage manufacturing process affected by seasonal demand Constant production of chairs to cover orders Differentiation - By means of established methods and resources for production (integrated) ○ Hire trained personnel and use machinery to create a wide variety of upholstered chairs, platform rocking chairs and quality reclining chairs ○ Be able to meet the demand in the right amount and at the right time As an integrated manufacturer, Chaircraft should have been more efficient than they were, but they were structurally not set up for success. This case is about the fundamentals of production planning and control. Johnson needs to better balance the cost of set up with the cost of carrying parts inventory. Recommendation 1 - Adjust parts ordering to EOQ ● ● ● Economic Ordering Quantity - ideal order quantity a company should produce in order maximize its production and demand rates while minimizing inventory costs Chaircraft is overspending on labor hours by not producing parts in larger quantities The largest pieces were especially costly because the frame shop supervisor tried to balance the production load between the availability of wood from the dry kiln (bottleneck) and the various machines and operators available Recommendation 1 - Adjust parts ordering to EOQ Strategy Stock frame parts to recommended EOQ in order to emulate Burger King’s made-to-assemble model Tactics ● ● ● Expand the plant for additional space in the frame assembly area for parts storage Require material handlers to report extra withdrawals and non-standard parts usage. Enforce punishment strictly if policy not followed Speak with Traffic Controller, Felix Hernandez, and ask him to reduce advanced scheduling from three weeks down to 5-7 business days Recommendation 2 - Centralize machine loading and production rate setting Strategy Increased inventory will lead to better planning of machine use and operator availability Tactics ● ● ● Continue to standardize processes and identify which parts are most efficient for the old and new machines to process Increased inventory management can make up for some of the seasonal fluctuation of demand (ensuring the departments are operating at full capacity) Run the plant at larger scale during the day to take advantage of skilled workers who demand day-time hours/shifts. Longer-term Recommendations Big-picture operations strategy ● ● Make-to-Stock for popular models (good use case of the two times in 10 years and each time they ended up selling all inventory at regular prices by year end Reduce the number of frame styles available for sale prioritize popular options Thank you! CORNING GLASS WORKS–THE Z GLASS PROJECT (CASE STUDY) Case Summary & Problem Statement The Corning Glass Company had many product developments between 1950 to 1970. During that time, they always were a leader in the arena of glass and ceramic products. They focused on commercial products until the 1960s when they entered the consumer market. One of Corning’s exceptional technologies in this market was “Z-Glass”. After several successful years of producing Z-Glass at the Harrisburg plant, there was suddenly a decrease in company’s yields. This is illustrated by MacTavish by diminishing the value of process documentation. Eric Davidson wants to streamline operations and improve inefficiencies by documenting the organization’s processes. MacTavish poses resistance to Davidson’s attempt by communicating that the M & E team’s presence is not needed and they are causing more harm than benefit. MacTavish further invalidates Davidson and the M & E team’s contributions by asserting that the best solution is for the team to leave the plant production department alone. To execute a strategy, there must be cohesion and synergy between interdependent departments. If such does not exist, individual agendas will surface ultimately preventing the organization from achieving its objectives. MacTavish and Davidson’s conflict supports this claim. The M & E team’s contribution arguably determines Corning’s ability to achieve their objectives. Management needs to stress the importance of process documentation and change to improve production efficiencies and yield output. MacTavish believes Harrisburg’s production problem is fundamentally a “people problem”. Correspondingly, MacTavish views the M & E program at Harrisburg as needless and he fears it can potentially hinder the progress already occurring. Consequently, it is recommended by him that Eric Davidson should stay out of it. Case Analysis Harrisburg’s internal management structure is headed by MacTavish. Above him is staff at the corporate level who focuses on overall manufacturing and production. (Figure B). MacTavish had advanced through the company in different learning roles and positions to the role of the Plant Manager position he now holds. The other leadership entity at the plant was Davidson and his M & E division. This team was stationed in the plant by top management to evaluate the decline in productivity and identify potential process improvement opportunities. Throughout the M & E team’s occupation at Harrisburg, there have been power struggles between MacTavish and Davidson. The manufacturing process of the Z-Glass Project was highly complex and sophisticated. There were many levels in the production process including melting, molding, and finishing. All the steps were performed independently of each other. Before M & E’s direction, after a part of the process was completed, there was little testing of the product to determine whether the process was performed correctly or not. When testing was able to be conducted, it was done so when products from different conveyor belts were merged together. This made it difficult to determine in which production stage defects occurred. According to MacTavish the facility’s decline in performance levels in 1977 were caused by production management’s the lack of experience. Many of the plant’s top managers had left the plant and “it has taken a few months for the new people to get up to speed.” MacTavish believes the yield drop was a one-time episode and affirms that the plant has already made significant progress improving production. Data depicting production levels in the 1970s supports MacTavish’s postulate. Overall yield between 1973 and 1977 increased steadily from 30% to 65% (Figure A). The plant did not experience a significant decline until the second quarter of 1977. At that time, the figure dropped dramatically to 40%. Although sales were considerably higher than in the previous year, $40.6m and $26.7m respectively (Table A), the plant’s profit was lower as the facility’s overall yield reached its lowest rate in the first quarter of 1978 but increased almost 20% in the following months thereafter (Figure C). Approximately, six months after Harrisburg’s productivity began to decline, the M & E team was called on by the top management. Recommendations Initial efforts to reverse the trend were unsuccessful. On two polarize sides, Davidson and MacTavish were unable to come to a compromising medium to improve yields. MacTavish felt strongly that the root cause of the yield decline was due to the departure of the plant’s seasoned experts whereas Davidson felt that the need to obtain long-term improvements by defining and documenting the processes was impacted with an inadequate data base and a process more complex than once imagined. Harrisburg resistance to process documentation is critical. Davidson’s approach is based on the premise of receivership of solutions relative to the plant’s organization. MacTavish had incorporated a supervisor backup training program to help rebuild yield levels. After a 3-month review, Davidson noted that there was an improvement in yield performance without significant input from M & E team’s involvement. Although his training was soundly based on the concepts of benefiting and documentation, it was mystifying for him to note the improvement did not incorporate this methodology. MacTavish knows the facility programs and has a keen intuitive insight of production issues; he is most likely accurate in his diagnosis of the plant’s system failures. Positional bargainers usually attack either by asserting their position, or by attacking the other side’s ideas. This is characterized by MacTavish. There should have been a more strategic alliance between both parties initially. Instead, the M & E team moved into the facility in full force within several months of yield declines and upset internal management and staff. The strategy recommended for Harrisburg is to discontinue the current M & E program and establish a different leadership structure for the Z-Glass project. The exhibit figures support MacTavish’s standpoints. He appears to have a comprehensive understanding of Harrisburg internal affairs. However, he does not value process documentation and change the M & E team advocates. The recommended strategy involves transferring the responsibility production improvement to MacTavish in exchange for his permission allowing the installation of measurement instruments in reduction. Instead of M & E’s current fulfillment supervision, MacTavish will be required to report to Davidson regularly to show improvements in production efficiency driven analytics and documentation. The decision-making process is often a group process. MacTavish must apply principles of democratic decision making. In such a case, the leader becomes more of a coach, knowing the mission, objectives, and the process, but involving those team players who must help in achieving the goal. MacTavish must cooperate with top management to achieve productivity goals in the plant. This strategy greatly reduces the resources required for the project which are, most notably the labor cost of the M & E team. Most of their work will be transferred to MacTavish; he will be more motivated if he has control over his work and own professional destiny. The cost of measuring tools and collecting data will be the same in the recommended strategy as it was in the initial program. Exhibits
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