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- C580/T577 Operations Management Syllabus Course Outline Instructor: Roger W. Schmenner Office: BS 3024C (Indianapolis) e-mail: rschmenn@iupui.edu Phone: (317) 274-2481 Course Overview: This course addresses the management of operations in manufacturing and service firms. Diverse activities, such as determining the size and type of production process, purchasing the appropriate raw materials, planning and scheduling the flow of materials and the nature and content of inventories, assuring product quality, and deciding on the production hardware and how it gets used, comprise this function of the company. Managing operations well requires both strategic and tactical skills. During the term, we will consider such topics as: process analysis, workforce issues, materials management, quality and productivity, technology, and strategic planning, together with relevant analytical techniques. This course will provide a survey of these issues. The course makes considerable use of business cases. Each week will be spent in online discussion of the cases assigned. For each case, you will be asked to review actual company situations and apply your technical and managerial skills to recommending courses of action. Most cases will be from manufacturing companies, but some will be service-oriented. A number of cases will involve international companies or issues. With any case, the important question to prepare for is what you would do in the situation, and why, with the relevant numbers and analysis worked out as best you can. (See the section below on the case method.) There are also two textbooks assigned that are specifically designed to complement the cases. Much of the reading in them will aid your analysis of cases and/or provide background understanding to a topic that may not be covered completely by the cases. It is advisable to do the reading prior to preparing the cases. Various Excel templates for selected cases will be available on Oncourse for downloading. Please check exactly which cases the files refer to so that you can be prepared. The required readings are three in number: Cases: Case packet put together by Tichenor s Texts: (1) Roger W. Schmenner, Plant and Service Tours in Operations Management (Prentice-Hall, 5th edition), and (2) a special custom textbook from Prentice-Hall. This custom textbook combines chapters from Schmenner (Production/Operations Management, 5th edition) and Russell and Taylor (Operations Management, 2nd edition). Assignments and Exams Problem Set There will be a problem set distributed about midway through the course (April 21) for completion by May 6. The problem set is an exercise to reinforce some of the "arithmetic of production" that is useful in analyzing production problems. There will be no mid-term exam as such. Collaboration is permitted on the problem set. Teams of students may turn in a single, joint problem set. Paper There will be a paper required, due on May 25. It is to be a maximum of 8 pages long -typed, double-spaced -- counting all text and exhibits. (Papers longer than 8 pages, those singlespaced, or those handed in late will be returned to the student unread, with the grade of F.) The paper is to be a small case or situation from real life, together with a discussion that works through a solution of your own devising to the problem posed. Problems or issues from your own work (e.g., service operations or overhead functions) can be excellent situations, although they need not be chosen. In the first part of the paper you should specify the situation, while in the second part of the paper you should work out what you personally see as its solution. Any type of operations management problem can be chosen, from line balance to job design to new equipment justification to quality problems to whatever. There is to be no collaboration on this assignment. Case Write-up At any time during the course you may write up one of the assigned cases (not any of the exercises, however). The write-up is not to exceed 3 pages in length. Each write-up should address the same question: What should the manager at the center of the case do, and why? You are not to collaborate with anybody else in the preparation or write-up of the case. Student Evaluation The emphasis on cases in the class means that your case preparation and participation in the class discussion is an important part of the learning experience. Therefore, class participation is weighted fairly heavily in the final grade determination. The weights of each aspect of student evaluation are shown below: Class Participation Problem Set Case Write-up Paper 40% 20% 20% 20% Please note that much of your evaluation comes late in the semester. This can be anxietyprovoking, but, given the nature of the course, I see no alternative. The class mean grade is likely to be between 3.4 and 3.5. The Case Method of Instruction Most of the cases for this course are field-based, detailing actual company situations. The names and numbers may be disguised, but the stories behind the cases and the character of the analyses are not. Most cases have a protagonist with whom you should feel free to identify, and solving this person s managerial problems is generally at the heart of the case and our analysis of it. A typical case includes data, some of which is crucial and some of which is extraneous, just as the protagonist faces. The key issue for us is always: What should the protagonist do, and why? Cases can provide us with a number of advantages. Much good management lies in the identification of the real problem in a business situation. Cases can help hone skills at problem identification. Cases can also provide an attractive means by which certain technical skills can be learned. More importantly, cases especially over time can lead us to wisdom that is, appreciation for a situation and its background and importance, clear assessment of the alternatives, far-sightedness with the implications, and decisiveness. There is no one best way to read and prepare a case, but here are some suggestions: 1. Read the case quickly to find out what s going on, who the protagonist is, and what the dilemma may be. 2. Then, with an idea of what the case is about, re-read more carefully and identify what in the case is on point and what is fluff. 3. Try to craft some analysis to attack the problem, making whatever assumptions you think you need to make. Don t bog down because the data isn t staring you in the face go for the method of analysis, at least. 4. Review the analysis and quickly test the assumptions versus the text, exhibits, and footnotes. 5. Come up with a plan of action that you would like to champion in class. The quality of our discussions in large part depends on you and your preparation of the case. We all benefit when as many people as possible put their minds to the task of preparing and sharing their views on the case. If I am judging you on your participation, what are the things I keep in mind: Are you in command of case fact? Do you understand the problem clearly? Have you explored the alternatives? Is your analysis persuasive (thoughtful, integrated, making use of data given)? How complete is the plan of action? Air time is not nearly as important as analysis, numbers, and recommendations that are meaningful. Expect to be frustrated with these cases, especially early in the course. Only worry, however, when you can t follow what has happened during our discussions and work it out for yourself afterward. Conduct of the Course Case Discussions: The case discussions will come in bunches. Ordinarily, we will discuss the cases over a period of 2 weeks, with 3 or 4 cases under discussion simultaneously. Please spend the first few days of the first week reading the textbooks and the cases. Refrain from posting any comments about the cases until the Friday of the first week. We can then spend the and weekend the next week discussing the cases and consolidating our learning. Question Board: As you read and as you work the cases, you may become confused and thus wish to seek clarification about a particular point. Rather than interrupt the case discussion itself to seek clarification, please post your question or confusion on the Question Board. Anyone can answer the questions posed there, and I, naturally, will be accessing the question board myself to provide whatever guidance I can. Case Bunch #1. March 15 March 25 Balance Process Types, Flows, and Reading: Introduction and Tours A, B, C, D, E and F in the Plant Tours book, and the chapter in the custom textbook entitled Flows, Bottlenecks, and Balance . Cases: Given the start date to this quarter, let s begin discussing these cases on Sunday, March 19. National Cranberry Cooperative 1. What kinds of problems are being experienced? Diagram the process flow. Click here to view Process Flow. 2. Where is the bottleneck? What should be done about it? How can you prove it? What solution is most cost effective? Click here to view Berry build-up graph. Benihana of Tokyo 1. How is Benihana different from other restaurants? How does it make its money? 2. What kind of process is this? 3. How big should the bar be? Sunshine Builders 1. What kind of process is this? 2. What is the chief problem at Sunshine, and how can it be resolved? Crystalox 1. How does this company compete? What is going on there now? 2. How much capacity does this operation have? 3. Where does it make its money? Case Bunch #2: March 26 April 8 Quality Queuing, Line Balance, and Reading: Review the last part of Chapter 1 of the custom text on Flows, Bottlenecks, and Balance . Chapters 2 & 3 of the custom text. Exercise: Factory Simulation: The Impact of Variation Problem to solve: IU Baskets Robert Knight, The General manager of IU Baskets, Inc., was contemplating how he and his young, and increasingly restless, group of workers could manufacture baskets more efficiently and in greater quantity. He had tried yelling and intimidation, but that wasn t working. Limits on floor space at Assembly Line Hall and certain other regulations forced Knight to operate with only 5 workers on the floor at a time. Although IU Baskets fabricated baskets (and buckets) during much of any day, the sales department was particularly keen on the creation of baskets during specific 40-minute intervals, when demand was unusually strong. Knight wanted to know how many baskets his work team could make during this time. (Certain break periods extended the standard work period to a longer "clock time", but Knight only had 40 minutes of labor time per worker actually to make baskets.) Materials for more than 1 basket could be on the floor at the same time and, thus, more than 1 basket could be "in process" at a time. Baskets could be manufactured in any number of ways. However, Knight was particularly partial to a dominant flow (termed a "possession"), which some had dubbed the Motion Off-Fence Basket. Here are the steps involved in this dominant flow or possession: Operation 1. Bring materials from back court 2. Setup 3. Pass around 4. Into Paint 5. Kick out 6. Give and go 7. Pick 8. Roll 9. Screen 10. Create fake 11. Backdoor 12. Drive 13. Stuff 14. Box out Seconds Needed per Worker 5 3 7 4 2 6 3 3 2 4 8 5 2 2 Some of these steps could be rearranged, but others had to be done in a specific order. In particular, steps 1, 2, and 3 had to be done in that order, and at the start of the process. Similarly, steps 12, 13, and 14 had to conclude the process, and in that specific order. Step 8 (roll) had to follow step 7 (pick), and step 5 had to follow step 4, although not necessarily immediately for either set of these steps. However, steps 4, 5, 7, and 8 could be moved elsewhere in the process. Several of the steps required 2 of the workforce to work together (i.e., at the same time) to accomplish them; specifically, steps 4, 6, 7, and 9. Given these constraints on the manufacture of baskets, how many could Robert Knight's work team expect to make during a 40-minute interval, and how would he have to organize the Motion Off-Fence Basket to do so? (Assume that work-in-process inventory existed on the floor so that all workers could get to work right away.) Knight was eager to keep the amount of idle time for his 5 workers to an absolute minimum; as he put it, "You can't make baskets when you're standing around." How much idle time could Knight expect? Click here to download the Gantt chart (Microsoft Excel, 14KB) Cases: Jones Box and Label: The Recall 1. What should Larry Shortt do about the recall? Detroit Tool Industries (A) 1. Evaluate the introduction of SPC at the Cheboygan plant to date. 2. How would you address the issues raised by the foreman, workers, and union? 3. What steps must be taken to ensure that you pass the upcoming audit? Case Bunch #3: April 9- April 22 Management Production Planning & Materials Reading: Chapters 4, 5, 6, and 7 of the custom text. Cases: Duvall Industrial Click here to download file for this case. (Microsoft Excel, 16KB) Use a spreadsheet to work on this case. The adventurous may want to use Excel Solver. Spirit Bottling Click here to download this case. (Microsoft Word, 58KB) 1. Is cutting back on inventory a good idea? How do you know? 2. What is the current production planning system? How would you change it? Stewart Instruments 1. What are the potential causes for Stewart's inability to ship product? 2. Which explanations are most persuasive, and what would you do to remedy things? 3. How would you deal with workforce demoralization? Wotan See the questions posed at the end of the case. The problem set will be posted and available on April 21. Case Bunch #4: Supply Chains April 23 May 6 Just-in-Time Manufacturing and Reading: Chapter 8 of the custom text. Cases: Sunwind (A) 1. Is now the time for JIT at Sunwind? 2. What would you do to bring JIT to the plant? Omega: Autumn 1988 1. What do you suppose Ernst Z ngerle's vision for the future is? Barilla SpA (A) 1. Why do the order patterns for both the distributors and for Barilla look as they do? 2. What are the benefits and drawbacks of the JITD program? 3. What are the potential arguments against such a program, and how could they be overcome? The midterm problem set is due on or before May 6. Case Bunch #5: May 7 May 20 Planning Capacity, Managing Technology Reading: Chapters 9 & 10 of the custom text. Cases: Applichem (A) Click here to download file for this case. (Microsoft Excel, 23KB) 1. How can we compare the various plants across the world? 2. What happens if transport costs are included? What tools could be used for this analysis? 3. What should Applichem do? BMW: The 7-Series Project 1. What should be done to improve launch quality? 2. What changes should BMW make to the way it develops new models? Hewlett-Packard: Singapore (A) 1. What resources and capabilities does a company need to develop new products? 2. Why did the Alex project fail? 3. Should H-P Singapore enter the Japanese market with the DeskJet 500J printer? Case Bunch #6: May 21 June 3 Strategy Vertical Integration. Manufacturing Reading: Chapters 11 & 12 of the custom text. Cases: EMP - Asbury Park (A) 1. What are the assumptions in the analysis? 2. Do you like the comparison used? 3. What, if anything, is missing from the analysis? Searle Medical Instruments Group (A) 1. What problems exist at Searle? 2. How would you attack these problems, both strategically and tactically? DuPont: The Gemini Proposal 1. Why haven't IS costs been contained? 2. What are the pros and cons of the Gemini proposal? 3. What should Mike Allan do? Alpine Tobacco 1. How does Alpine Tobacco compete? 2. What are the economics of the various proposals? 3. What are the levers to be pulled for greater profitability? What do you recommend?

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