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15.760B | Spring 2004 | Graduate

# Introduction to Operations Management

The required course material includes:

- The 15.760 H2 course packet (includes cases listed below).
- Goldratt, Eliyahu M., and Jeff Cox. The Goal: A Process of Ongoing Improvement. 2nd revised ed. North River Press Publishing Corporation, 1992. ISBN: 0-88427-061-0.

In addition, Prof. Gallien recommends the following textbook as an additional (optional) reference:

- Anupindi, Ravi, Sunil Chopra, Sudhakar D. Deshmukh, Jan A. Van Mieghem, and Eitan Zeimel. Managing Business Process Flows. 1st ed. Prentice Hall PTR, 1999. ISBN: 0-13-907775-8.

Students use the questions shown below to prepare for the upcoming class discussions.

LEC # | TOPICS | TYPES | READINGS | QUESTIONS
--- | --- | --- | --- | ---
1 | Course Introduction | Lecture | Course syllabus |
2 | Burger King and McDonald’s | Case | Garvin, David A. “Types of Processes.” Boston, MA: Harvard Business School, 1981. Note No. 9-682-008. Sasser Jr., W. Earl, and David C. Rikert. “Burger King Corporation.” Boston, MA: Harvard Business School, 1998. Case No. 9-681-045. Sasser Jr., W. Earl, and David C. Rikert. “McDonald’s Corporation.” Boston, MA: Harvard Business School, 1998. Case No. 9-681-044. Students with last names A-L work on the Burger King corporation case and skim the McDonald’s corporation case; Students M-Z work on the McDonald’s corporation case and skim the Burger King corporation case. | 1. Draw a process flow diagram for hamburger production in your case. (What are the major process steps and where are the locations of inventories?) 2. For the case you read, analyze the peak hourly capacity vs. peak hourly demand for burger patties. Can they produce enough burgers? 3. In your case, what seems noteworthy about the process technologies in use? 4. How does the management of operations relate to the company’s method of competing in the marketplace?
3 | Capacity | Lecture | Katz, Karen L., Blaire M. Larson, and Richard C. Larson. “Prescription for the Waiting-in-Line Blues: Entertain, Enlighten, and Engage.” Sloan Management Review 32, no. 2 (winter 1991): 44-53. |
4 | National Cranberry | Case | Miller, Jeffrey G., and R. Paul Olsen. “National Cranberry Cooperative.” Boston, MA: Harvard Business School, 1983. Case No. 9-675-014. | 1. What are the problems facing receiving plant No. 1 (RPI)? 2. What industry trends are likely to affect cranberry processing and how? 3. What are the sources of the variability that NCC is subjected to? 4. Develop a process flow diagram, showing the capacities of the various stages in barrels per hour. 5. Suppose that a peak harvest-season day involves 18,000 barrels of berries, 70% of them wet harvested, arriving over a twelve-hour period from 7 am to 7 pm. Would trucks have to wait to unload? When during the day would trucks be waiting? How much truck waiting time would you expect? 6. How would the various actions contemplated by Hugo Schaeffer affect peak day performance? Suppose the cost of renting cranberry trucks with drivers is $10.00 per hour. What would you recommend? Why?
5 | Webvan | Case | Deighton, John, and Kayla Bakshi. “Webvan: Groceries on the Internet.” Boston, MA: Harvard Business School, 2003. Case No. 9-500-052. | 1. What are the key competitive features of the service offered by Webvan against a traditional supermarket? 2. Describe Webvan’s logistic and delivery system. What are the operational complexities Webvan needs to overcome? 3. Evaluate and compare the net operating margin of a Webvan Distribution Center against that of an equivalent number of traditional supermarkets. What are the parameters that most sensitively affect Webvan’s margin? 4. In retrospect, what would you have done differently?
6 | Inventory | Lecture | Perman, Stacy. “Automate or Die.” Business 2.0, July 2001. Article available at the Business 2.0 magazine Web site. |
7 | Barilla | Case | Lee, Hau L., and Corey Billington. “Managing Supply Chain Inventory: Pitfalls and Opportunities.” Sloan Management Review 33, no. 3 (spring 1992): 65-73. Hammond, Janice H. “Barilla SpA (A).” Boston, MA: Harvard Business School, 1994. Case No. 9-694-046. | 1. Which specific “pitfalls” and “opportunities” (as described in the assigned reading) are most relevant to Barilla’s supply chain? 2. Diagnose the underlying causes of the difficulties that the JITD program was created to solve. What are the benefits and drawbacks of this program? 3. What conflicts or barriers internal to Barilla does the JITD program create? What causes these conflicts? As Giorgio Maggiali, how would you deal with these? 4. As one of Barilla’s customers, what would your response to JITD be? Why? In the environment in which Barilla operated in 1990, do you believe JITD (or a similar kind of program) would be feasible? Effective? If so, which customers would you target next? How would you convince them that the JITD program was worth trying? If not, what alternatives would you suggest to combat some of the difficulties that Barilla’s operating system faces? There will be special office hours today to answer questions on the Sport Obermeyer Case write-up.
8 | Sport Obermeyer | Case | Fisher, Marshall L., Ananth Raman, and Anna McClelland. “Rocket Science Retailing is Almost Here - Are You Ready?” Harvard Business Review (July 2000). Reprint No. R00404. Hammond, Janice H., and Ananth Raman. “Sport Obermeyer Ltd.” Boston, MA: Harvard Business School, 1996. Case No. 9-695-022. Graded case write-up due at the beginning of class. | 1. Using the sample data given in Exhibit 10, make a recommendation for how many units of each style Wally should make during the initial phase of production. Assume that all of the ten styles in the sample problem are made in Hong Kong, and that Wally’s initial production commitment must be at least 10,000 units. 2. What operational changes would you recommend to Wally to improve performance? 3. How should Wally think (both short-term and long-term) about sourcing in Hong Kong vs. China?
9 | Production Control | Lecture | Miller, Jeffrey G., and Linda G. Sprague. “Behind the Growth in Materials Requirement Planning.” Harvard Business Review (Sept 1975). Reprint No. 75510. Karmarkar, Uday. “Getting Control of Just-in-Time.” Harvard Business Review (Sept 1989). Reprint No. 89505. |
10 | Hewlett-Packard | Case | Kopczak, Laura Rock, and Hau Lee. “Hewlett-Packard Co.: DeskJet Printer Supply Chain (A).” Stanford, CA: Stanford University, 2001. Case No. GS3A. | 1. What has caused the so-called Inventory/Service “Crisis”? 2. What are the important “drivers” of safety stock? 3. Recommend quantitative target inventory levels for the six European options, assuming a weekly periodic review replenishment. 4. Assuming a 20% gross margin for each printer, sea transportation costs of $1 per printer and air transportation costs of $10 per printer (air shipment lead-time is three days), evaluate the various alternatives available to Brent Cartier to address the inventory and service problem.
11 | The Goal | Book | Goldratt, Eliyahu M., and Jeff Cox. The Goal: A Process of Ongoing Improvement. 2nd revised ed. North River Press Publishing Corporation, 1992. ISBN: 0-88427-061-0. |
12 | Quality | Lecture | Leonard, Frank S. “Hank Kolb, Director, Quality Assurance.” Boston, MA: Harvard Business School, 1993. Case No. 9-681-083. | 1. What are the causes of the quality problems on the Greasex line? 2. What should Hank Kolb do?
13 | Toyota | Case | Mishina, Kazuhiro. “Toyota Motor Manufacturing, U.S.A., Inc.” Boston, MA: Harvard Business School, 1993. Case No. 9-693-019. | 1. What are the principles and components of the Toyota Production System? 2. As Doug Friesen, what would you do to address the seat problem? Where would you focus your attention and solution efforts? What options exist? What would you recommend? Why? 3. Where, if at all, does the current routine for handling defective seats deviate from the principles of the Toyota Production System? 4. What are the underlying causes of the problems facing Doug Friesen?
14 | Process Design | Lecture | Hammer, Michael. “Reengineering Work: Don’t Automate, Obliterate.” Harvard Business Review (July 1990). Reprint No. 90406. Cotteleer, Mark, Robert D. Austin, and Cedric X. Escalle. “Enterprise Resource Planning, Technology Note.” Boston, MA: Harvard Business School, 2003. Reprint No. 9-699-020. |
15 | Global Financial Corp. | Case | Holloway, Charles A., and Charles P. Bonini. “Global Financial Corp.” Stanford, CA: Stanford University, 1997. Case No. OIT20. | 1. For the existing process at Global Financial Corp., compute the capacity utilization of each process step, and comment on your results. 2. Propose an alternative design for the overall loan application process using process design principles, and use both queuing theory and case data to build a predictive model of average total cycle time (“throughput time”) for the loan applications of each type (standard and new) under your proposal. What is the reduction in cycle time obtained? You can make the following assumptions: a) 6.3 effective man x hours per day, five business days per week, 13 weeks per quarter. b) All inter-arrival times between two consecutive loans of the same type have a coefficient of variation equal to 0.85, and the average arrival rates of the various types of loan can be obtained from the second to last row of the table in Exhibit 1. 3. List the implementation difficulties that are likely to arise with your proposal, and formulate a plan to address them.
16 | Supply Chain Design | Lecture | “Cloning in Three Dimensions,” Chapter 8 in Fine, Charles H. Clockspeed: Winning Industry Control in the Age of Temporary Advantage . Perseus Publishing, 1999. ISBN: 0-7382-0153-7. |
17 | Product Design | Lecture |  |
18 | Sega Dreamcast | Case | Thomke, Stefan, and Andrew Robertson. “Project Dreamcast: Serious Play at Sega Enterprises Ltd. (A).” Boston, MA: Harvard Business School, 1999. Case No. 9-600-028. | 1. Evaluate Sega’s product development process before Dreamcast (Saturn), and for Dreamcast. 2. Should Sega launch its Dreamcast product as scheduled, or postpone? 3. Provide a detailed description (members, architecture, incentives, key business relationships) of Sega’s supply chain. 4. Which future value-chain evolution(s) do you foresee in Sega’s industry? What strategy would you recommend for Sega as a result?
19 | Simulation and Course Wrap-up | Lecture |  |

## Course Info

##### Instructor

- Prof. Jérémie Gallien

##### Departments

- Sloan School of Management

##### As Taught In

Spring 2004

##### Level

Graduate

##### Topics

- Business
  - Operations Management
  - Project Management
  - Supply Chain Management

##### Learning Resource Types

notes Lecture Notes

Browse Resources

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