BUS 560: Design & control of the Operations function

Professor: Office: Phone: Office Hours: e-mail: About this Course This course introduces students to one of the major functional areas of business-Operations Management. Operations Management (OPMAN) is devoted to how an organization efficiently converts resources into products and services. These resources include an organization's facilities, workforce, equipment, information, and materials. OPMAN decision-making occurs at all levels of the organization-- strategic or long-term and tactical or short-term. Given the competitive nature of today's domestic and international business environment, the efficient management of a firm's resources is critical to business success and survival. BUS 560 will provide you with an overview of the issues that make OPMAN critical to both manufacturing and service firms. Also, we will investigate the relationship of OPMAN to other business functionsfinance, marketing, human resources, accounting, etc. Given brief duration of the course, it will be necessary to move rapidly, so please fasten your seat belts! The course will use two perspectives to explore operations. The first is the process view a set of activities and resources that transform inputs into outputs. We will explore how to design, analyze, and control business processes within a firm. The second half of this course will use the supply chain as the overarching model to explore the latest operations-related initiatives. The supply chain is simply a network of firms that source, make, and deliver the product or service to the customer. Both the process and the supply chain view are important and critical to the firms performance. In a recent survey by the US News & World Report and Working Women magazines, careers in managing business processes, supply chain and logistics were listed as the fastest growing and highest paid career option for business graduates. Furthermore, many related decisions are now made by corporate Boards so as a budding manager, the ideas and concepts you learn in this course will serve you better as you move into the uppermost echelons of your firm. Ram Ganeshan 3005 Miller 221-1825 by appointment Ram.Ganeshan@mason.wm.edu

Specific topics include process design and analysis, product and service quality, lean operations, fast fashion, planning distribution and supply, and strategic design of both manufacturing and service networks. Typical Career Paths Consulting (IBM, Accenture, McKinsey and many others have very large global practices in operations and supply chain), Investment Analyst, Manager of logistics/distribution, product design evangelist, supply chain or operations manager. Materials and Pedagogy To fully appreciate the complexity of business operations and the difficulty in managing them, I will use multiple modes of instruction: (1) Cases (2) Business Simulations, and (3) Readings and in-class discussions. All your cases, readings, and the Global Supply Chain Simulation are available from Harvard: https://cb.hbsp.harvard.edu/cbmp/access/18651477

Cases and participation Cases are the primary mode via which essential ideas are communicated in this course. The syllabus has talking points for every case. These are nonexhaustive set of questions that will frame our discussion. Preparing a case requires that you take a position on the case and are prepared to defend your position with the requisite analysis. . Your class participation will be primarily be evaluated on: being a good listener evidence of careful preparation of cases and readings clarity and conciseness of your comments in class strong and convincing quantitative and qualitative analysis to support your comments and your position.

Business Simulations During the course of the semester, I have planned two business simulations. This is an integral part of the learning experience -- you will be managing supply chains. Your decisions will impact profits, and the primary intent is to explore how

operational performance can be improved in different scenarios. These simulations either introduce or reinforce ideas that will help manage complex supply chains. Specific details on the simulations will come later in the module. Readings and in-class Discussion I have also included multiple readings that will help you with a case situation or will explore new ideas. From time to time I will also upload readings to your Blackboard site. As with cases, you are expected to prepare these readings and be ready to discuss them in class. Evaluation Components 1. Since the primary objective of this course is to help to develop your supply chain and operational skills, you will be graded on how well you analyze a case or simulation and the efficacy of your operational recommendations. Since your participation and preparation for each session is key in providing a rich and rewarding classroom experience, class participation is a major component of your evaluation. 2. You will formally submit two case write-ups as a group. Case 1: National Cranberry OR Benihana of Tokyo OR Toyota OR Southwest Case 2: Timbuk2/Apple OR Sport Obermeyer OR Herman Miller OR Fiji The case analysis is due on the day the case is scheduled to be discussed. A write-up is limited to 6 pages max (double-spaced, 12-point) including any exhibits or appendices. The analysis can follow the talking points for the case, i.e., answer the questions within the 6-page limit. 3. The third component of the evaluation is based on how well you make your decisions in the Global Supply Chain Simulation (this is part of your course pack on the Harvard site) planned for the module. You will manage a cell phone company and make product, sourcing, and supply chain decisions over the course of four years. This will be an in-class simulation, and you will submit a Group analysis (the analysis/report will be done as you work on the simulation). 4. Finally, there will be two exams, a mid-term on 3/25 and a Final on 5/2. The mid-term will be based on cases/readings covered until 3/19. The final will cover all the cases/readings covered in this course.

Class Participation Case critique (2 @ 15% each) Global Supply Chain Simulation (Group in-class assignment) Midterm Final

15% 30% 5% 25% 25%

William & Mary Honor Code Some of the cases that you will analyze may have been used in prior semesters either as part of this course, or unbeknown to this instructor, in other courses. Solutions or teaching notes may either have been handed out or posted on Blackboard (or any such medium). Accessing these solutions and teaching notes in preparation for the class in which they are used in our course is a violation of the William and Mary Honor Code. Also, referring to work done by students for this course in prior years, or any material distributed in prior years (case notes, exams, or teaching shorts) is also a violation of the honor code. Finally many of the cases are operations management classics so any solutions other than your own effort i.e., solutions on the Internet, etc are also violations of the Honor Code. You are encouraged to prepare in your study groups the assigned material for each day.

Instructor Biography Ram Ganeshan is a Professor at the Mason School of Business, The College of William and Mary, Williamsburg, VA. He received a Doctorate in Operations and Logistics Management from Penn State; a Masters degree in Operations Research from the University of North Carolina at Chapel Hill; and an undergraduate degree in Industrial Management from the Birla Institute of Technology & Science in India. Rams research and consulting interests are in the areas of supply chain management, digital technologies, and logistics strategy, primarily in the chemical, hi-tech, and retail industries. He is a regular contributor to academic and trade journals and is the editor of the seminal book: Quantitative Models for Supply Chain In 2001, the Production & Operations Management Society

(POMS) awarded him the prestigious Wickham Skinner Award for his groundbreaking research on how supply chains can be efficiently managed. In addition to his academic appointment, Ram is also active in several corporate advisory Boards; helping these companies embrace the latest developments in supply chain management and digital strategies. At the College of William & Mary, Ram teaches courses in Supply Chain Management and Digital Strategies to students at all levels undergraduates to executives. In 2006, he was awarded the Alumni Fellowship Award, reserved only for the finest teachers at the University. Prior to his appointment at the College of William & Mary, Ram was part of the faculty at the University of Cincinnati Business School where he taught logistics and supply chain. He has also held fellowships and visiting positions at Nijenrode University (Holland) and the Indian School of Business (India).

Tentative Schedule
Following is a general outline of the Operations Planning Course. I have also included detailed session plans (pre-midterm plans appended to this document) for you to follow: Class Date Cases/Readings

Introduction & Strategy OP 1 OP 2 2/25 2/26 Introduction Patagonia Interview with Michael Dell Dell in 2009

Process fundamentals, Design, & Analysis OP 3 OP 4 OP 5 2/27 3/1 3/11 Kristens Cookie (A) National Cranberry Cooperative Benihana of Tokyo

Process Control OP 6 OP 7 3/12 3/14 Introduction to 6-Sixma & Lean Six sigma at Flyrock Tires

Lean Operations OP 8 OP 9 3/15 3/18 Toyota Motor Manufacturing Inc. Southwest Airlines Mumbais models of service excellence

Exam Prep & Review OP 10 OP 11/12 OP 13 3/19 3/25 4/5 Review session Midterm Exam Midterm review Tutorial on The Newsvendor problem

Channel Alignment OP 14/15 OP 16 OP 17 OP 18 4/8 4/9 4/10 4/11 Beer Game Beer Game Debrief Barilla SpA (A) Timbuk2 The Apple Supply Chain

Fast Fashion OP 19 OP 20 OP 21 4/15 4/16 4/18 Sport Obermeyer Ltd. Making Supply meet demand in an uncertain world Zara Rapid-fire fulfillment Zappos

Environmentally Sustainable Supply Chains OP 22 4/22 Herman Miller: Cradle-to-Cradle The Biosphere Rules ITC: Sustainable luxury Fiji Water

OP 23 OP 24

4/23 4/24

Global Supply Chain Management OP 25-27 OP 28 OP 29/30 4/25 4/29 5/2 Global Supply Chain Simulation Wrap the Course up Review Session Final

Detailed Schedule (1st half) OP 1 Course Introduction

Materials: None Required Assignment: None I will use this session to introduce the course. This class will also serve as an introduction to business processes.

OP 2
Materials:

Operations strategy

1. Patagonia (HBS Case: 9-711-020) 2. The Power of Virtual Integration: An Interview with Michael Dell, Harvard Business Review, March-April 1998 (HBS article: #98208) 3. Dell in 2009 (Ivey Case: 908M93) Assignment: Groups 1-11 will prepare the talking points for Patagonia and skim the two Dell cases. Groups 12 onwards will prepare the Dell talking points in detail and skim the Patagonia case. Note: When I say skim I expect you to read the case but do not expect you to have prepared the talking points in detail. Talking points for Patagonia 1. How does Patagonia compete in the marketplace? 2. How important is Patagonias environmental position to its strategy? Why? Does the new Product Life Cycle Initiative support its environmental position? What does it do to profits? 3. How does Patagonias operations support its strategy?

Talking points for Dell in 2009/Interview with Michael Dell 1. In 1999, what was Dells core competence? Specifically, what made it better than its competitors? 2. What is virtual integration? How does Dell gain competitive advantage from virtual integration? 3. How has the strategy shifted in 2009? What implications does it have for Dells supply chain?

OP 3

Process Fundamentals & Metrics

Materials: 1. Process Fundamentals (HBS Note: 9-696-023) 2. Kristens cookie Company (HBS Case: 9-686-093) Assignment: 1. Read the background note Process Fundamentals. Specially, familiarize yourself with the following ideas: Process flow diagram, Cycle time, Capacity, Throughput, Flow time, Utilization, Work-in-Process (WIP), and Bottleneck. 2. Prepare the Kristens Cookie Company case by answering the questions at the end of the case.

OP 4
Materials:

Process Analysis: Bottleneck Management

1. National Cranberry Cooperative (HBS Case: 9-688-122) Assignment: The National Cranberry case is a classic and has become a point of reference for nearly everyone who has attended business school. A common pitfall in analyzing the case is to become mired in too much detail, so be careful to maintain the big picture while addressing the questions.

1. Draw a detailed process flow map of the current process at Receiving Plant #1. What is the capacity of each process step? 2. Currently what is (are) the major reason(s) for trucks waiting and excessive overtime? 3. On average, how long will the trucks have to wait on a busy day? Assume a 7am start of processing of berries and a continuous arrival rate of berries of 1,500bbls/hr. 4. What benefits would you expect if processing time was moved up from 11:00 a.m. to 7:00 a.m. during the peak period? Should this be done for the entire season? 5. If you were Hugh Schaeffer, what changes would you make to improve performance of the process? Estimate the magnitude of the costs and benefits of these changes. You may use the Excel workbook NCC.xls (available on Blackboard) to analyze this case, although the analysis can be done without it.

OP 5

Process Design & Analysis: Services

Materials: Benihana of Tokyo (HBS Case: 9-673-057) Assignment: Use the talking points below to prepare the Benihana of Tokyo case Talking points 1. Describe Benihana as an operating system. (Draw a process flow diagram.) 2. How does the operating system support the Benihana concept? 3. Which parameters of the operating system influence the throughput of a Benihana Restaurant? 4. How does the cost structure of a Benihana restaurant compare with that of a typical American restaurant? How does Benihana get its competitive advantage?

OP 6

Introduction to SPC & Lean

Materials: None Assignment: None I will introduce Statistical Process Control / 6-Sigma & Lean Operations in this session.

OP 7

Six Sigma at Flyrock Tires

Materials: Six Sigma at Flyrock Tires Assignment: Prepare the Six Sigma at Flyrock Tires case by answering the questions at the end of the case.

OP 8
Materials:

Lean Operations in Manufacturing

1. Toyota Motor Manufacturing (HBS Case: 9-693-019) 2. Decoding the DNA of the Toyota Production System (HBS article: 99509) Assignment: Prepare the Toyota case using the talking points below. Use the Decoding the DNA article as a backgrounder to explore the Toyota Production System. Talking Points 1. What are the key principles that TPS incorporates? Which ones did they fail to follow? 2. What is the cost of a chord pull resulting in a line stoppage of 1 minute? 30 minutes? 60 minutes? What is the value of a chord pull? 3. How should Doug Friesen address the seat problem? As Doug Friesen, where would you focus your attention and solution efforts?

OP 9

Lean Operations in Services

Materials: Rapid Rewards at Southwest Airlines (HBS Case: 9-602-065) Mumbais Models of Service Excellence (HBR article R1211K) Assignment: 1. Prepare the Southwest case using the talking points below. 2. Read the HBR article on the Dabbawalas of Mumbai. 3. Think about how the lean concept in services is different from manufacturing. Talking points for Southwest 1. What are Southwests sources of competitive advantage? For costs of different airlines see: http://operationsbuzz.com/2011/01/airlineeconomics/ 2. Should Southwest save low-numbered boarding cards for its most frequent fliers? What is the key motivation for your opinion? What are the trade-offs that Southwest must consider in making this decision? 3. Should Southwest allow its most frequent fliers that have missed their flight to take the next available flight with an empty seat or should these customers have to wait for the next available flight with empty seat within the same fare class? 4. Consider how you might determine the economic importance of frequent fliers? See : http://operationsbuzz.com/2010/05/frequent-flier-worth/

Talking points for Mumbais Models of Service Excellence 1. What process do the Dabbawalas of Mumbai use to deliver hot lunches from customer homes to offices? Is the back-hual (getting the empty containers back home) different? 2. What the citys Dabbawalas can teach service organizations about quality?

OP 10 Exam Prep
Materials: None. Assignment: None. This session will serve as a review for the mid-term. Please have your questions ready.

OP 11 & 12

Midterm