MGMT 601-SECTIONS 01, 02 OPERATIONAL ANALYSIS Spring 2010 Instructor: Dr. Lifang Wu Campus Phone: (513) 745-3928 Office: Schott 404 Fax: (513) 745-4383 Office Hours: 4:00pm-6:00pm TW 10:00am-12:00pm F Email: WUL@xavier.edu Class Time: Tue, Wed 6:00pm-8:30pm Class Location: ALT 323 MISSION OF THE WILLIAMS COLLEGE OF BUSINESS We educate students of business, enabling them to improve organizations and society, consistent with the Jesuit tradition. PURPOSE OF THE COURSE The purpose of this introductory course is to provide MBA students with a thorough introduction to the concepts and skills needed to understand the role of operations in the success of an organization, to lead efforts and make appropriate decisions in the operations functions of their organizations, and to analyze and improve various business processes. This course specifically highlights and aims at improving your analytical working skills. INTRODUCTION TO OPERATIONS MANAGEMENT Operations Management refers to the systematic design, direction, and control of processes that transform inputs into services and products for external, as well as internal customers. The course is one of the few MBA core courses required by AACSB. We will introduce various concepts and decision-making models related to issues such as operations strategy, process improvement, quality control, inventory, and supply chain management. These topics are widely considered .core. in Operations Management courses. COURSE MATERIALS Textbook: Operations Management: Processes and Supply Chains, 9th edition, by Lee J. Krajewski, Larry P Ritzman and Manoj K. Malhotra, Prentice Hall, 2009 (ISBN: 0136065767) Case packet: The packet includes the following Harvard Business School Cases: (1) Webvan (HBS# 9-602-037); (2) Manzana Insurance Fruitvale Branch (HBS# 9-692-015), (3) Six Sigma Quality at Flyrock Tires (HBS# KEL 028), (4) Necanko, Inc. (HBS# 904D20). This packet is available for purchase from www.hbsp.harvard.edu. You can search for individual cases or the entire course packet (Please look for Xavier, MGMT 601 Spring 2010 class and my name after login). Other Materials: 1. All lecture slides, which are solely developed by the instructor for this course, will be provided on our course website blackboard.xu.edu. Additional cases, practice problems will be posted on this website as well. I developed a macro in PowerPoint for better managing the PPT slides, however, this feature is useless to you. When opening up the slides, please choose .disable macros. to avoid any security risks. 2. We will also supplement the course with latest articles from newspapers and journals as the course progresses. COURSE REQUIREMENTS Attendance: All students are normally expected to attend each class. Please bring your copy of course documents (normally including PPT slides, examples, practice problems, cases) and a scientific calculator to every class. If you have an urgent need to miss one class, you are still responsible for the materials covered and expected to complete required work. In this case please contact me in advance if possible. Attendance will be taken on a regular basis and will be counted as part of your participation performance. (Special note on laptop: Please do not bring your laptop to class unless specified) Participation: To foster a productive learning environment, it is important that everyone comes to class prepared and willing to contribute to discussion (Check the pre-class assignments for each session contained in this syllabus before coming to class). I will expect you to raise/answer questions and/or make organized and concise comments in every class. Your participation score will be based on factors such as in-class involvement, group discussions, after-class communications, etc. Teamwork: As studies show that group collaboration can significantly improve learning efficiency, an important element of this class is teamwork. To maximize learning, everyone is strongly encouraged to work in a study group of no more than 3 students. During some class sessions, you will be asked to analyze some short cases in groups/do practice problems. Every team member is expected to make contributions on an equal basis. Peer evaluation will be conducted at the end of the semester. Homework: There will be two homework assignments in this semester which mainly include workout problems to help you understand the analytics and prepare for the exams. It is essentially important for everyone to do all these problems on an individual basis in order to fully understand the methodology and perform well in exams. As a result, please be advised that you need to submit your own copy of homework (can be printed or hand written, make sure I can read). Case Reports: There will be four case reports due (Each requires about 3 pages in length) in this semester. Only three best will be selected toward your final grade. I believe that the process of composing the paper is a valuable part of your learning process. Teamwork is also encouraged, therefore, I encourage you to develop and submit case report in groups (one submission per group). Please note that 20% off per week penalty will be applied to any late submitted case reports. Exams: There will be two exams in this semester. The exams would cover concepts and analytical techniques presented in lectures. Students are responsible for all materials covered in classes (including any session they did not attend). Each student will be allowed to bring in one 8.5 by 11 inch (single-sided) note sheet containing whatever he or she chooses for reference during the exam. Make-up exam will require documentation of illness or other unavoidable emergency, in which case please contact me as early as possible. GRADING SYSTEM Grade Percentages Grading Scale (tentative) 1. Participation 10% A – = 89 – 92% A=92–100% 2. Homework 10% B (including + /–) = 79 – 89% 3. Case Reports 20% C (including + /–) = 70 – 79% 4. Midterm 30% D = 60 – 69% 5. Final Exam 30% F = below 60% This grading scale is tentative and will be adjusted according to the overall class performance. COURSE CALENDAR Class Topics Related Chapters 1 Syllabus Introduction to Operations 2 Operations Strategy Ch 1 3 Process Analysis--Capacity HBS Note, Ch 4, Ch 6, Ch 7 4 Process Analysis—Flow Time Teaching Note, Ch 4, Sup C 5 Process Strategy Ch 3, Ch 8 6 Project Management Ch 2 7 Decision Making Sup A & E Midterm Review 8 Midterm Exam 9 Quality Management Ch 5 10 Process Quality Control Note, Ch 5 11 Inventory Management Ch 9, Ch 12 12 Inventory and Risk Pooling Ch 12 13 Matching Supply with Demand Sup D 14 Forecasting Ch 13 Resource Planning Ch 15 15 Supply Chain Management Ch 10, Ch 11 Final Review 16 Final Exam (6:00pm-8:30pm) RECOMMENDED BOOKS AND JOURNALS (1) Goldratt, E. M., and J. Cox. The Goal: A Process of Ongoing Improvement. 2nd Revised Ed. North River Press, 1992. (2) JR Meredith and SM Shaffer. 2007. Operations Management for MBAs (3rd Edition). John Wiley. (3) R. Anupindi, S. Chopra, SD Deshmukh, JAV Mieghem and E Zemel. 2006. Managing Business Process Flows (2nd Edition), Pearson Prentice Hall. (4) The journals you have free access through Xavier University library: Harvard Business Review, Supply Chain Management Review, and Interface. POLICY Our general policy for this class is that when preparing cases and assignments students should not benefit from anyone who has already participated in a faculty-lead discussion of the same material, at Xavier or at another school. WRITTEN ASSIGNMENTS FOR MGMT 601 In preparing the written analyses, please adhere to the following guidelines: 1 Work in groups of no-more-than three students for the case reports. 2 We prefer group to individual work on written assignments as we have found that groups develop significantly better solutions, and that you learn from one another in group interactions. Please note that you are expected to contribute to the group work on an equal basis. This will be verified by peer evaluation which will be conducted at the end of the semester. As a result, .inactive. performance will lead to low individual grade. 3 Hand in one hard copy of the case write-up for each group (single space, font size #11). Case report usually includes three pages of text (and several pages of exhibits if necessary). Exhibits should contain specific types of analyses, such as financial analysis, flow charts, cost analysis, etc. They should contain any relevant supporting information that is too detailed for the body of the paper. Exhibits must not be simply an extension of the text. 4 Case reports are to be turned in at the beginning of class on the day it is discussed. Please keep a copy for your own use during class discussion if you wish. We will not distribute written solutions to the write-ups, but rather will rely on the class session associated with the case to bring out the most important issues. The case write-ups will be graded using the following criteria (These are my general expectations): . Does the paper identify the main fighting issues correctly? (Do not simply repeat the given information in the case, which adds little value to your work.) . Does the paper contain insightful analysis of the major issues? . Does the analysis incorporate the relevant concepts / tools properly? . Is the paper logically consistent and effectively structured to sell its recommendations? . Is the paper too long or too short? Is it easy to read? . Does the paper appear to be professional? TENTATIVE TEACHING TOPICS Class 1: Introduction to Operations In this class, we will discuss our course syllabus and introduce operations management as a business field. We will define process view, operations management key decisions, and performance measurements in both goods- and service-producing firms. Pre-class reading assignment is listed as follows: 1. Course syllabus 2. PPT slides 3. HBR Article: Reinventing your business model Class 2: Operations Strategy The goal of this class is to provide students a strategic framework to analyze the design and planning of operations function within organizations so as to improve the business competitiveness. We will describe the role of operations strategy and show how strategic operational decisions can be made based on marketing research and competitive analysis. This is followed by a case discussion on business models of grocery retailing operations. The pre-class reading assignments are listed as follows: 1. Text: Chapter 1 (the entire chapter) 2. PowerPoint slides: Operations strategy 3. Xavier Teaching Case: .ALDI Store. prepared by L. Wu 4. Optional article: A blogger's experience at ALDI 5. HBR article: What is strategy? After-class assignment (Please focus on answering the following case questions): 1. Complete a case report for Webvan case (HBS# 9-602-037). Please focus on Webvan’s competitive analysis, operations strategy and the possible reasons why it failed. Refer to this syllabus for detailed write-up requirements. Class 3: Process Analysis (1) The primary goal of this class is to introduce the basic concepts and analytical tools for improving general business processes. We focus on capacity and bottleneck analysis in this class. After class, you should understand how to analyze and improve the capacity and utilization of various multi- stage business processes. Pre-class reading assignments: 1. PowerPoint slides: Process Analysis 2. .Process Fundamentals., Harvard Business School Note (6-696-023) 3. Optional reading: Chapter 4; Chapter 6; Chapter 9 (skip technical parts) After-class assignment (Due in three weeks): 1. Process analysis homework problems 1, 2, 3 Class 4: Process Analysis (2) We will introduce flow time analysis techniques in this class. Both single unit and multiple flow units processes will be covered. Pre-class reading assignments: 1. Read PowerPoint slides for process analysis (2) 2. Optional reading: Chapter 4 and Supplement C (skip technical part) After-class assignment (Due in two weeks): 1. Process analysis problem 4 and 5 2. Case report for Manzana Insurance Case (HBS# 9-692-015) Please focus on the following items: (a) Specify key performance indicators and assess the overall performance of the business; (b) Compute the theoretical turnaround time (TAT) as the foundation of your performance evaluation, note that TAT computation in Exhibit 3 is wrong; You need to use Little’s Law for computing TAT (flow time); You are encouraged to compute the flow rate (or capacity) based on the weighted average processing times (given in Exhibit 4) and the process flow chart given in Exhibit 2; (c) Find their actual TAT and explain why the branch was underperforming (Consider operations process and marketing policy, these are the main things you need to present in the report); (d) Propose your recommendations to fix the problem(s). Class 5: Process Strategy We will consider strategic decisions in managing processes for meeting long-term competitive goals, including process structure, customer involvement, resource flexibility and capital intensity. This is followed by case discussions on a Make-to-order cookie manufacturing and retailing process. Pre-class reading assignments: 1. PowerPoint slides: Process strategy 2. Chapter 3: Process strategy 3. Harvard Business School case: Kristen’s Cookie (A) (9-686-093)(Note: This case will be discussed in class, please prepare before coming to class) 4. Optional chapter 8: Lean system Class 6: Project Management In this class we focus on the technical aspects of managing projects, covering topics such as project work breakdown structure, critical path and project crashing. We aim at establishing your basic understanding about planning, scheduling and controlling projects in a way that project resources are utilized effectively and efficiently. In the meantime, we must keep in mind that effective project management involves more than simply setting up a CPM schedule. Management aspects of project management are certainly equally important. Pre-class reading assignments: 1. PowerPoint slides: Project Management 2. Chapter 2: Project management (pages 52-62, skip technical part) 3. Please remember the first HW assignment and Manzana case will be due today After-class assignments: 1. Project homework problem 1 Class 7: Operational Decision Making (Not required for the Midterm) We will introduce the fundamental framework for quantitative decision making in business management. We will emphasize how to formulate LP problems for real applications. Further, how to use Excel for solving LP and other decision problems will also be discussed. Pre-class reading assignment: 1. PowerPoint slides 2. Read supplement E (skip technical part) After-class homework: 1. LP homework problem 1 (HW#2 problem 1) Class 8: Midterm (Bring a calculator and your reference sheet) Class 9: Quality Management In this class, we focus on concepts and techniques for improving process quality. Specifically we introduce the six sigma metric and DMAIC methodology as the primary tool for process management and continuous improvement. Pre-class reading assignment: 1. PowerPoint slides 2. Chapter 5 (pages 173-183) After-class assignment: 1. Do quality homework problems (HW#2 problems 2, 3, 4) Class 10: Statistical Process Control In this class, we introduce the statistical process control tools—the same techniques used at IBM, GE and Motorola to achieve high quality standards. Please remember to bring in one quarter coin (for each group) required for playing the exercise A. Pre-class reading assignments: 1. PowerPoint slides 2. Chapter 5 (the rest of the quality chapter, you may skip technical part) 3. Bring in one quarter coin for playing exercise A (see page 216-217) After-class assignment: 1. Case report for case Six sigma quality at Flyrock tires (Case questions are attached at the end of the case) (case report due in two weeks) 2. Do quality homework problems (HW#2 problems 5, 6) Class 11: Inventory Management (1) In this class, we discuss the functions, types, costs and management of inventory. We then address two basic inventory issues: how much to order and when to order in the context of continuous review inventory system. Pre-class assignment: 1. PowerPoint slides 2. Read chapter 12 (pages 415-428, skip technical part if you wish) After-class assignment: 1. Do inventory homework problems (HW#2 problems 7, 8) Class 12: Inventory Management (2) We will address two basic inventory issues: how much to order and when to order in the setting of periodic review inventory system. Further we introduce the concept of risk pooling and its application in real business setting. Pre-class assignments: 1. Read PowerPoint slides 2. Read text (pages 429-433, skip technical part) After-class assignments: 1. Do inventory homework problems (HW#2 problems 9, 10) Class 13: Matching Supply with Demand We consider in this class how to make the operational decisions to meet uncertain demand. We will discuss the impact of using quick response strategy to mitigate the mismatch cost. Pre-class assignment: 1. Read PowerPoint slides 2. Optional Supplement D (skip technical part) After-class assignment (case report due in next class) 1. Do quick response problem (HW #2 problem 11 parts 1-4) 2. Prepare case report for Necanko, Inc (HBS# 904D20). Use the following case questions: a) Map the physical supply chain for count-sized mints. b) As Karen Mazzoli, what do you think is happening to cause the sales spike? c) What do you recommend and why? Class 14: Forecasting and ERP In this class we introduce the basic framework of making business forecast by describing and comparing qualitative and quantitative approaches to forecasting. We briefly explain averaging forecasting techniques and describe a number of measures of forecast accuracy. ERP is also discussed at the end of the class. Pre-class assignment: 1. Read Chapter 13 Forecasting (pages 462-472, 477-483), Chapter 15 ERP (pages 541-549) 2. Read PowerPoint slides 3. Please remember the second HW assignment is due today (including LP, quality, inventory, and quick response problems) Class 15: Supply Chain Management In this class we introduce the framework of supply chain management. We will describe main terminologies and concepts of global supply chain management. A brief final review will also be provided in this class. Pre-class assignment: 1. Read PowerPoint slides 2. Skim Chapter 10 (the whole chapter) and Chapter 11(optional) Class 16: Final Exam (Bring a calculator and your reference sheet)