Assignment 1
Sidebar:
| 5 Main Elements* | Mediators | Other Crucial Items |
|
Cost Quality Delivery Flexibility Service |
Organization & Processes Uncertainty Technology
|
Strategic Alignment Operational Vision Infrastructure Integration |
Note: I prefer the term "robust" over "flexibility" and I will probably tinker with the items in future revisions. This is an draft intended for use by the Operations Management class. Robust means the ability to maintain performance levels under different conditions. Flexibility means being able to respond to change. The definitions are almost the same, but not quite. It's impractical to discuss it here although I'm always willing to hear your thoughts on this matter.
What is Strategic Operations Management?
It's an operations infrastructure that has been built and focused on best serving the corporate strategy. It's the wrapper around everything else. Operations has formerly been the realm of engineers and applied business mathematicians. Rather than looking at the big picture, these folks have often suboptimized. Why has this only recently become a topic? (By the way, what operational outcome measures do people use to get a picture of the entire system?)
The emergence of certain key technologies have put operations front and center as a crucial part of strategy. The Dell reading will underscore this. It also underscores the increased emphasis on business strategy for operations directors and managers. The COO of middling and large corporations usually have an MBA; on occasion, the COO doesn't even have her basic roots in operations.
The Five Main Elements & Strategy
You can describe the operations strategy of any case or project by these five main elements. An operations infrastructure can aim for any combination of these 5 elements: cost, quality, delivery, flexibility, and service. The pareto principle applies here. There are trade-offs: you can't maximize one without taking from the others. I won't make a huge grid with these 5 elements, but certain cells represent competitive death. For example, you can't have operations geared to premium service combined with low cost.
Worse, sometimes folks get one element confused with the other. It's especially easy to do in service industries or job shops. Quality, for example, is difficult to define: it's very idiosyncratic. With almost every guest, I am going to ask them to define quality. I'm fascinated by the answers. The reading rehab case underscores the difficulty with clearly defining and delineating the five elements.
Is the operations strategy aligned with the overall business strategy? Does it propel the business towards fulfilling its critical success factors? You can sometimes turn this on its head: is the overall business strategy aligned with inherent operational limits?
Everything I need to know about Manufacturing, I learned in Joe's Garage
Homework Questions (Hand in any two questions, but know answers to all four)
1. Ralph and Joe have different concepts on how the shelf building operation should be laid out? Ralph introduces us to the cellular concept. What is that and how does it differ from Ralph’s approach? How does the cellular approach relate to Kaizen?
2. Joe states that “Planning and Control are the lifeblood of manufacturing”. Do you agree with this? How does Joe define planning and control? Ralph brings up a third concept related to planning and control, what is it? (process). Why is Process so important? Can you have a good plan and maintain control without a good process in place? Why or why not?
3. With respect to p. 54-55, what points are the authors trying to make? Can you achieve that ideal state without the types of things going on in the earlier pages of the book? Why not? Choose 3 concepts and tell me how they're necessary to achieving this end state.
4. Joe sees himself as an operations guru that takes advantage of technology. Ralph was a proponent of keeping the operation simple. He had an alternative to the computer tracking? He called it Kanban. What is this and how does it differ from Junior’s computer tracking program? What's wrong with using a computer? Does this make sense?
Discussion Questions (discussion questions are not to be handed in)
1. Now that you've completed some readings, is it reasonable to expect anyone to be a master in every aspect of operations? What does your answer mean for anyone working in operations management? What then is operations management? What is reasonably expected out of a competent operations manager?
2. Your boss is giving you the chance of a lifetime. You are being offered a promotion to be the operations manager for a large production plant...for the graveyard shift. You're motivated (and desperate) enough to take the job. It can be a definite career enhancing (or ending) move. You're also given the freedom to assemble your own operations management team. What types of people do you want on your team? You cannot use an escape hatch and recruit an experienced operations manager.
II. Introduction to The Toyota Production System
Is it a philosophy or is it merely a tool?
Required Reading
There's no escaping it. We have to read about Lean and Toyota Philosophy whenever we talk about JIT. It's funny. At one time, many thought that no one could really implement the Toyota Production System in an auto factory in the United States. Toyota helps maintain a factory in Fremont, California (joint with General Motors) and Lexington, Kentucky.
It is my wish that you choose the questions and readings that dovetail with your needs. It's designed to make you combine theory with some of the operational practices that concerns you...but it isn't easy. There's no such thing as an easy cookbook. Encontextualization is an essential for operations management. Want to hear a fallacy? Your textbook operational theories and technical formulas can be directly applied to your work setting. They're valuable, but you have to extend theory to make it apply to each situation. You must be, in effect, an operations theorist to be an effective operations manager.
While we have some strong ideas about how certain concepts may be applied in certain settings (e.g. Toyota supplier practices to improve outsourcing in IT or software), it remains for you to create the final touches to your particular setting. This is simply hard work and imagination.
Toyota in Japan has been incredibly open for study and to our benefit, we've picked up ideas for Just-in-Time practices, continuous improvement, worker relations, and concurrent engineering. Toyota itself has successfully encontextualized some of its practices at NUMMI in Fremont, CA and TMM at Georgetown, KY. If you ask the average Toyota manager, however, about whether we've copied their practices, he'll give you a strange look. Like Americans watching Japanese rappers, the Japanese managers think we've lost something in the translation. Our work flows, our version of JIT, and continuous improvements looks....foreign. Nevertheless, much of it works precisely because we've adapted it.
In truth, students have told me that poking through the Toyota web site did more than any article or text on the Toyota system (perhaps short of Joe's Garage). I therefore present to you, Toyota in their own words.
1. NUMMI Glossary - I'm almost embarrassed to admit it, but this glossary explains it far better than I. It's better than the glossary in the case. These include "jidoka", “kanban,” “heijunka,” or production leveling, “standardized work,” “kaizen,” “poka-yoke,” visual control (andon board) and the team concept.
2. NUMMI web site - Cruise their web site. It's a fairly simple, but complete statement of their operational philosophy. You get the feeling that they intended this for their employees and suppliers more than for outsiders. It even contains a plant tour.
3. TMM web site - Same as above.
Optional Reading
1. Time and Motion Regained - Other professors laughed at Professor Paul Adler. It turns out he was right. This is the background to the NUMMI plant, formerly closed after years of intense conflict and worker apathy and then revived by Toyota. The key question to remember: Who holds the stopwatch?
Homework Problems
1. Can you provide me a definition of JIT? What's the difference between a pull system versus a push system? Can you tell me why JIT is a philosophy and not just a tool like "line balancing"? What is JIT intended to accomplish?
2. Recall the "Lucy Chocolate Production" video piece from the beginning class. How do the concepts relate to operations for the production of chocolates?
3. Why do some folks quote the goofy phrase: "Quality is free" with respect to improving operations? (hint: how can a company achieve lower costs by improving the quality of its services or production) Why do some folks like me quote the mantra: "Quality is established at the source"?
4. Compile a list of questions regarding the implementation of lean at Boeing. You should create at least 8 questions that span over finance, inventory and supply chain management, human relations, and of course, the use of Toyota concepts.
Discussion Questions (don't hand these in...for class discussion)
1. What difficulties might our companies face in trying to adopt the Toyota Production System? This is a thought question.
2. Consider this conundrum: Japanese companies employ practices that seem to defy math and conventional logic. For example, Toyota: breaks its lots far below “minimum economic order size; uses each worker, rather than professional inspectors, to inspect the previous worker’s results; allows any worker to stop the line and has automatic line stops; and encourages workers to redesign their own work rather than using industrial engineers to break the work." (almost verbatim from “The Second Toyota Paradox”, HBR, Spring 1995). Observers look at individual parts of the Toyota production system and find it "rough" and crude. Toyota, nevertheless, has higher than average efficiencies. What do you suppose is going on to create these efficiencies?
Game prep and roles to be given in class on the first day of class. On Monday October 9, we'll have a quiz on the Ichibutsu game (worth 1% of your total grade). You can use a single page of cheat sheet.
On Wednesday, October 11, we will play the Ichibutsu Game. You should jot down a few notes after the game. You should read this Game Introduction in advance of Wednesday's class. On Saturday October 14, we're visiting Boeing Renton.
Required Homework (To be handed in with Assignment 2!)
1. You will prepare a 1-2 page 'mini-journal' highlighting your reflections about relevant operations lessons. You should tie these reflections to concepts from Joe's Garage. Your team's reflections on the tour and the game should be consolidated into a single document. There are so many items that may be highlighted in the game and the Boeing tour e.g. pull versus push, kaizen, waste and overproduction, layout, quality concepts, benchmarking (spying), controlling the sources of inventory, customer relations, Pull versus Push, improving financials and getting the union on board. Don't merely report what happened; display critical thinking and personal insight.