Class 19: Course Wrap-up

1. Course Main Concepts and Simulation

Debriefing
2. Sloan Evaluation Forms

3. Final Feedback Survey

after class

2002 - Jrmie Gallien

Intro to Ops At-a-Glance

Day

Date

Contents

Readings

Mon

Assignments

Sim

29-Mar

Course Introduction

Course Syllabus

Wed

31-Mar

Case: Burger King + McDonald's

Types of processes

Fri

2-Apr

Lecture: Capacity

Wait-in-line blues

1 Ex. Buildup, 1 Ex. Queueing

Mon

5-Apr

Case: National Cranberry

Wed

7-Apr

Case: Webvan

Fri

9-Apr

Lecture: Inventory

Automate or Die

1 Ex. EOQ, 1 Ex. Newsboy

Mon

12-Apr

Case: Barilla

Managing Supply-Chain Inventory

Wed

14-Apr

Case: Sport Obermeyer

Rocket Science Retailing

Case Write-up

Fri

16-Apr

Lecture: Production Control

Growth in MRP, Control of JIT

1 Ex. Kanban, 1 Ex. Commonality

10

Wed

21-Apr

Case: Hewlett-Packard

11

Fri

23-Apr

Book: The Goal

The Goal

Book Review

12

Mon

26-Apr

Lecture: Quality

Hank Kolb case

1 Ex. SPC, 1 Ex. 6 Sigma

13

Wed

28-Apr

Case: Toyota

14

Fri

30-Apr

Lecture: Process Design

15

Mon

3-May

Case: Global Financial Corporation

16

Wed

5-May

Lecture: Supply Chain Design

17

Fri

7-May

Lecture: Product Design

18

Mon

10-May

Case: Sega Dreamcast

19

Wed

12-May

Simulation & Course Wrap-up

Reengineering Work, ERP Tech. Note

Chapter 8 Clockspeed

Simulation Write-up

2002 - Jrmie Gallien

What is Operations Management?

TIME
OM = Strategy Execution!

QUALITY

FLEXIBILITY

COST

2002 - Jrmie Gallien

Benchmark Companies

Toyota
FedEx (Webvan)
Dell

Lean Manufacturing

Hub & Spoke

Direct-to-Consumer
ATO technology
Walmart (Barilla) Vendor-Managed
Inventory
Sport Obermeyer Quick Response
Zara
Assortment Optimization

2002 - Jrmie Gallien

Operations Management

History

1920s: Ford & Taylor

Moving Production line and standardized work

1930s: Shewhart
Statistical Control of Quality
1960s: Ohno
Lean Production System
1980s: Goldratt
Theory of Constraints
1990s: Hammer
Reengineering & Process Focus
2000s: 15.760 Alumni
Storytelling
2002 - Jrmie Gallien

A Translation Challenge
Corporate Structure
Top Management
speaks the language of
MONEY
Operations
Management
Mid-Mgt., Associates, Workers
speak the language of
THINGS
OM merges physical and financial analyses,
and requires great care to people issues!
2002 - Jrmie Gallien

Operations Management
Architecture
Product

Supply-Chain

Integral Vs. Modular:

Integral Vs. Modular:

Functions
Interface
Interchangeability

Geography
Organization
Culture
Communication

Customization

Process

HR

Project

Functional
Managers

Job Shop

General
Manager

Batch Flow

Line Flow

Continuous

Volume

Project
Managers
2002 - Jrmie Gallien

Operations Management Activities

Set of responsibilities:
1.

DESIGN

Product, Process, Supply-Chain, HR

2. PLANNING

Demand (forecast), Supply (Capacity)

3.

CONTROL

Inventory, Production Control, Suppliers

Pricing, LT Quote, Quality, HR

4.

IMPROVEMENT Time, Cost, Flexibility, Quality

2002 - Jrmie Gallien

Operations Management Tools

Product
Design &
Devlpt.
Design
Planning
Control
Improvement

Process

Supply
Chain

Product Architecture
Development Process
Reengineering
Market Positioning

Process Architecture
Reengineering

SC Architecture
Strategic Sourcing

CPM
DSM

Capacity Analysis
ERP, CPM

Quick Response
Capacity
CPM

CPM
Critical Chain

Inventory
TOC, CPM, ERP
Production Control
TQM

Inventory Theory
VMI (JITD)
Production Control
TQM

TQM
TPS

TOC (The Goal)

TQM, TPS &
Lean Manufacturing

TPS,
Lean Manufacturing

2002 - Jrmie Gallien

Factory Simulation Skills

Product
Design &
Devlpt.
Design
Planning
Control
Improvement

Process

Supply
Chain

Process Architecture
Process Flow Diagram

Forecasting
Capacity Analysis
Cycle Time Analysis

Inventory Control
Team Organization

TOC (The Goal)

TPS

2002 - Jrmie Gallien

4,000,000

3,500,000

3,000,000

2,500,000

2,000,000

1,500,000

1,000,000

500,000

0
0

10

15

20

25

Max # of Machines
2002 - Jrmie Gallien

Capacity Analysis
Processing Time (hours):
Step
1
2
3
4

Station
1
2
3
2

Set-up time (per lot)

0
0
1.5
0

Operation time (per unit)

0.062777
0.02
0.001666
0.021388

FORECAST

Capacity Utilization
=/Nx
2002 - Jrmie Gallien

 and Queueing Theory

Average
Waiting
Time
W
0

2 ( S +1)

C +C
1
W=

1
2
2
A

Capacity
Utilization
=/Mx

2
S

2002 - Jrmie Gallien

An Example for Insight

1 job arrives
every minute
on average

Server takes 45
sec. to process
each job

Queue
initially
empty

=1

= 1.33

Queue
Length
5
4
3
2
1
0

10 11 12

Time
(min)
2002 - Jrmie Gallien

Cycle Time Analysis

Station 1

Station 2

Station 3

Station 2

60 kits/lot
total cycle time
30 kits/lot
total cycle time

2002 - Jrmie Gallien

Customer and Process Timeline

stage
1
LT1

stage
2

stage
4

stage
3
LT2

LT3

LT4

Target customer
delivery LT

customer

PULL
stage
1

stage
2

stage
3

stage
4

customer

PUSH
2002 - Jrmie Gallien

Delayed Differentiation
demand
Customization Step

Upstream
Steps

demand

demand

LT1

LT2

Target customer
delivery LT

2002 - Jrmie Gallien

Delayed Differentiation
Customization Step

Upstream
Steps

demand

demand

demand

LT1

LT2

Target customer
delivery LT

2002 - Jrmie Gallien

Inventory Theory

Order Quantity Q

EDDLT

EDDLT

EDDLT

DDLT1

Reorder Level

Order Quantity Q

= Lead Time
= Expected Demand During Lead Time
= (Actual) Demand During Lead Time

DDLT2

LT
EDDLT
DDLT

Inventory

Safety Stock
LT 1
Order 1
placed

LT 2

Time

Order 1
received
2002 - Jrmie Gallien

Slide courtesy of Prof. Thomas Roemer, MIT.

 and Inventory Practice

EOQ Model

ROP/ROQ

Newsboy Model

Continuous Review/Periodic Review

2002 - Jrmie Gallien

$4,000,000

$3,500,000

$3,000,000

$2,500,000

$2,000,000

$1,500,000

$1,000,000

$500,000

$0
4/30

5/1

5/2

5/3

5/4
Date

5/5

5/6

5/7

5/8

2002 - Jrmie Gallien

Simulation Performance Drivers

Proactive Vs. Reactive Strategy: this is what

models allow!!!
Extent of quantitative analysis does have an
impact BUT describing qualitatively the
correct trade-offs brings you a long way
Understanding financial impact of
operational data (lead time, utilization,
queues, etc) had a huge impact!

2002 - Jrmie Gallien

Final Words

Do Keep in Touch and

GOOD LUCK!!!

2002 - Jrmie Gallien