Introduction to Operations and Information Management

For Friday Friday recitations in KOBL 320 or KOBL 380 Section 101: 9:00 – 9:50 AM in KOBL 380 – Noah Section 102: 10:00 – 10:50 AM in KOBL 380 – Whitney Section 103: 11:00 – 11:50 AM in KOBL 380 – Whitney Section 104: 12:00 – 12:50 PM in KOBL 320 – Jason Section 105: 12:00 – 12:50 PM in KOBL 320 – Addison Section 106: 1:00 – 1:50 PM in KOBL 320 – Vimi Section 107: 1:00 – 1:50 PM in KOBL 320 – Chris Section 108: 2:00 – 2:50 PM in KOBL 320 – Nhan Section 109: 2:00 – 2:50 PM in KOBL 320 – Chris Section 110: 3:00 – 3:50 PM in KOBL 320 – Addison Bring your laptops or thumb drives to the remaining recitations so you can continue working with your data

Interim Project Deliverable Due in Recitation on Friday For Friday Interim Project Deliverable Due in Recitation on Friday

Interim Project Submission Worth 10% of Semester Grade External Document Requirements Introduction Overview of Data Used in Your Analysis Equipment Selection

Interim Project Submission Internal Document Requirements All Process Maps Evaluation Criteria On CULearn – Recitation #3 Leverage your RLs

For Next Week Read four articles under the Additional Required Readings/Operations Management folder on CULearn Quiz 8 next Wednesday will cover these readings

Total Students = 255 Completed Quizzes = 243 Mean = 7.2 Quiz 7 Statistics Total Students = 255 Completed Quizzes = 243 Mean = 7.2

Quiz 7

What KPI indicates that world steel makers ramped up their production too quickly in response to government stimulus programs?   Layoffs and furloughs Falling stock price Falling hot-rolled steel prices Increased auto production from the Cash-for-Clunkers program None of these Answer: Falling hot-rolled steel prices

What was the major change in the way Boeing develops and builds airplanes that has led to continued delays in the 787 program?   Batch vs. process manufacturing Less customization Using less expensive non-union labor Outsourcing most of the manufacturing None of these Answer: Outsourcing most of the manufacturing

What are examples of functional silos that get in the way of effective supply chain management?   Hardware/Software/Services Sales/Manufacturing/Inventory Management Carrying Costs/Capital Costs/Variable Costs Federal Government/State Government/Local Government All of these Answer: Sales/Manufacturing/Inventory Management

According to the required reading, who are potentially the weak links in a company’s supply chain?   Customers Distributors Chief Executives Overseas suppliers None of these Answer: Chief executives

When executed well, supply chain management can deliver which of the following benefits?   Reduced working capital Faster inventory turns Lower fixed costs Greater return on assets All of these Answer: All of these

Where would an RFID implementation be most effective? Tracking on-line financial statements Tracking lost airline luggage Tracking building energy usage Tracking ships on the open ocean Answer: Tracking lost airline luggage

Which of the following pairings would likely have conflicting goals regarding supply chain management? Sales and inventory management Manufacturing and inventory management Retailer and consumer New product development and purchasing All of these Answer: All of these

In addition the 787, Boeing is having difficulty delivering on the latest version of which of the following planes? 737 747 757 767 777 Answer: 747

What appliance manufacturer, profiled in the required readings, implemented new strategies to get the right product to the right place at the right time while keeping inventory low? General Electric Viking LG Bosch None of these Answer: None of these

Why are relationships so important in effective supply chain management? They break down functional silos They strengthen communication barriers They increase the ability to manage transitions A and C only All of these Answer: A and C only

Supply Chain Part I

From Boeing’s 787…

To Topper the Trick Terrier… Voice Recognition Requirements: (San Francisco) Voice Recognition Programming: (Taiwan) Plastic Eyes: (Shenzhen, China) Plastic Body: (Malaysia) Microfiber for Coat: (Korea) Speaker for voice: (Dongguan, China) Transistors: (Shenzhen, China) Motors for legs: (Shaoguan, China) IC chips: (Taiwan) Plastic legs: (Taiwan) Wiring: (Dongguan, China) Packaging: (Hong Kong)

Supply Chain Management Makes Business Work! Wal-Mart, Dell, Seven-Eleven Japan, Amazon, Toyota, IBM, Apple… Or Stumble… Hershey’s Halloween Nightmare: New order management and shipping systems don’t start right, as Hershey can’t fulfill critical Halloween orders; $150 million in revenue lost as stock drops 30% Cisco’s Inventory Disaster: Lack of demand and inventory visibility as market slows leads to $2.2 billion inventory write-off and stock price cut in half Nike’s Planning System Perplexity: New planning system causes inventory and order woes, blamed for $100 revenue miss as stock loses 20%

What is a Supply Chain? A supply chain consists of all stages involved, directly or indirectly, in fulfilling customer requests The entire process from point of origin (raw materials) to point of consumption (final products bought by customers) A network (interdependent system) of facilities including materials supply from suppliers transformation of materials to (inventories of) semi-finished and finished products distribution of finished products to customers

Stages of a Detergent Supply Chain SYST 4050 Slides Timber Company Paper Manufacturer Tenneco Packaging P&G or Other Manufacturer Wal-Mart or Third Party DC Wal-Mart Store Customer Supply chain involves everybody, from the customer all the way to the last supplier Chemical Manufacturer Plastic Producer Chapter 1

Example: Wal-Mart SYST 4050 Slides Chapter 1 Procter & Gamble or third-party distribution centers Procter & Gamble Customers Request: Buying detergent, clothes, TV, …... Wal-Mart Stores Da-Fa Clothing - China SONY Factory (Malaysia) Fabric Producer Electronics Components Producer Plastic Producer Zipper Producer Plastic Producer Chemical Producer Thread Producer Chapter 1

Example: HP SYST 4050 Slides Chapter 1 FAT = Final assembly & test USA DCs Suppliers IC Mfg Retailer Consumer Europe DCs Suppliers PC Board FAT Retailer Consumer Asian DCs Suppliers Subassembly Retailer Consumer Suppliers FAT = Final assembly & test IC Mfg = Integrated circuit manufacturing PC Board = Printed circuit board Chapter 1

Example: Dell SYST 4050 Slides Monitors by SONY (Mexico) Keyboards by Acer (Taiwan) Dell Assembly Plant Customers order computers on Dell’s website CPU by Intel (USA) Other components Dell is significantly revamping its entire supply chain strategy and, in large measure, abandoning its make-to-order model [April, 2008] Chapter 1

Material/Product Flow A Typical Supply Chain Information Flow Supplier Manufacturer Distributor Retailer Customer Material/Product Flow Value-Added Services Funds Flow

Now, What is a Supply Chain SYST 4050 Slides Flow of products and services from Suppliers Raw materials manufacturers Intermediate products manufacturers End product manufacturers Distributors and wholesalers Retailers Customer Connected through transportation, information, and exchanges of funds Supplier Manufacturer Distributor Retailer Customer Chapter 1

Every facility that impacts costs need to be considered Key Observations Every facility that impacts costs need to be considered Suppliers’ suppliers Customers’ customers Efficiency and cost-effectiveness throughout the system is required System level approach