1. Operations Management Part III

2. For Friday Friday recitations in KOBL 320 or KOBL S125
Section 101: 9:00 – 9:50 AM in KOBL S125 – Noah
Section 102: 10:00 – 10:50 AM in KOBL S125 – Whitney
Section 103: 11:00 – 11:50 AM in KOBL S125 – Whitney
Section 104: 12:00 – 12:50 PM in KOBL 320 – Jason
Section 105: 12:00 – 12:50 PM in KOBL S125 – Addison
Section 106: 1:00 – 1:50 PM in KOBL 320 – Vimi
Section 107: 1:00 – 1:50 PM in KOBL S125 – Chris
Section 108: 2:00 – 2:50 PM in KOBL 320 – Nhan
Section 109: 2:00 – 2:50 PM in KOBL S125 – Chris
Section 110: 3:00 – 3:50 PM in KOBL 320 – Addison

3. For Friday Reading Assignments:
For Friday, April 2nd – Review ‘Interceptor Body Armor’ paper stored in the recitation folder (also stored in additional readings folder)
For next week – finish reading ‘Interceptor Body Armor’ and read ‘End of the Line for GM’ stored in Additional Readings folder on CULearn
Quiz Wednesday, April 7th (open from 7 am to 11:30 am) over these readings

4. The Value Equation

5. Timeliness
Sources of competitive advantage
Lead time strategies
Lean operations / JIT

6. Examples of Time Competition
Overnight package delivery
Web-based information retrieval
Online shopping, banking, and ecommerce
Self-checkout at grocery
Airline check-in
Lift ticket scanners (ski resorts)
Fast food, ready-to-heat meals
Fashion industry
Your examples…

7. Some Thoughts on Time
Time -- as both a commodity and a competitive weapon -- is an emerging issue that business people can’t ignore if they expect to survive in this increasingly competitive world. We will see the demise of marginal firms who do not adopt time-based strategies. And the longer they wait, the faster they will fall. In short, where everything else is equal, time-based strategies become a key factor in widening the gap between those who adopt them and those who do not.
PLAY FedEx video
Fred Smith, Founder and CEO, FedEx
Fred Smith, Founder and CEO, Federal Express, 12/88

8. Business Week – March 2006

9. Lead Time & Time Competition
Speed often is measured as:
Quickness—measured by the mean
Reliability—measured in terms of range and shape of the lead time distribution
Lead time
Important determinate of “speed”
Lead time means several things
Important to define exactly

10. Lead Time Strategies Engineer to Order Make to Order Assemble to Order
Designed to customer specification
Make to Order
Standard design, produced only upon order
Assemble to Order
Subassemblies produced, assembled upon order
Make to Stock
Finished product made prior to order

11. Comparative Lead Times
Engineer to Order
Make to Order
Assemble to Order
Make to Stock
Internal Leadtime
Customer Leadtime

12. Just-in-Time JIT Operations Goal of Lean Systems: SIMPLIFY!
Produce only what is needed only when it is needed!
Goal of Lean Systems: SIMPLIFY!
Reduce inventories;
Reduce setup times;
Reduce information flows;
Fewer, more reliable suppliers;
Design products for manufacturability
Reduce WASTE of all types!
Russell & Taylor, Operations Management 3/e, Prentice-Hall, 2000

13. Unnecessary processes Inventory Motion and activity Defects
Sources of Waste
Overproduction
Waiting time
Transportation
Unnecessary processes
Inventory
Motion and activity
Defects
Russell & Taylor, Operations Management 3/e, Prentice-Hall, 2000

14. Reduce Inventory Produce in small lots
Eliminate space to store inventory
Don’t overproduce to increase utilization and efficiency
Better planning & forecasting
Produce to actual demand
Improve quality
SHOW AMAZON.COM VIDEO

15. Inventory Hides Problems
Poor
Quality
Unreliable
Supplier
Machine
Breakdown
Inefficient
Layout
Bad
Design
Lengthy
Setups
Russell & Taylor, Operations Management 3/e, Prentice-Hall, 2000

16. Reduce Inventory – Expose Waste
Poor
Quality
Unreliable
Supplier
Machine
Breakdown
Inefficient
Layout
Bad
Design
Lengthy
Setups
Russell & Taylor, Operations Management 3/e, Prentice-Hall, 2000

17. Lead time design opportunities Apply lean operations principles
Take Aways
Time
Powerful competitive force
Often difficult to duplicate
Lead time design opportunities
Apply lean operations principles
Reduce and eliminate waste
Focus on value-adding processes
Move from push to pull