Course Outline and Assignments

The Wharton School Quarter II Fall 1999 The University of Pennsylvania OPIM 631 Operations Management: Quality and Productivity Course Outline and ...
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The Wharton School

Quarter II Fall 1999

The University of Pennsylvania

OPIM 631 Operations Management: Quality and Productivity Course Outline and Assignments All of the course materials are available for purchase at The Bookstore. These include the “course pack” (a bound custom-published case book) and The Goal (a paperback book). The approximate preparation time required for each session is indicated by the number of • ’s after the class number. (Each •should correspond to about 1 hour of focused effort for an average student, however the required effort for each student may vary.) Class 1 • • Monday, November 1

Introduction Types of Processes

Web Tours: all tours can be accessed via http://www.mhhe.com/business/opsci/pom/tours.htm Go the web page noted above and take the tours specified in the "welcome email" sent to you by your instructor. (You are welcome to visit any of the other approximately 50 sites on the OM Tours web page.) Follow the instructions provided on the tours page (www.mhhe.com/business/opsci/pom/tours.htm), which generally suggest that you review the company’s product line before beginning the tour. Questions: (1) (2) (3) (4) (5)

What are the key characteristics of each process? What are the major differences between the processes? What would you expect to be the key elements of each company’s business strategy? What would you expect to be the key elements of each company’s operations strategy? What is your assessment of the fit between each company’s operation and its business strategy?

Class 2 • • • Wednesday, November 3

Process Flow Analysis Analysis of an Assembly Line

Case:

TOSHIBA: OME WORKS

Readings:

OPIM NOTE ON PROCESS ANALYSIS

[CB] [DISTRIBUTED IN CLASS]

The Toshiba case illustrates a classic assembly line operation. We use the case to reinforce several of the key concepts and terms in process flow analysis. Questions: (1) What are the key elements of Toshiba’s business strategy in notebook computers? In what way do Ome’s operations support this strategy?

OPIM 631

Course Outline and Assignments

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(2) What would be good measures for evaluating the performance of Toshiba’s Ome operations? (3) Assuming the assembly line prototype is implemented as shown in Exhibit 1, calculate the following quantities: • Process Capacity • The maximum number of computers that can be produced in a 7.5 hour shift • Direct Labor Content per notebook computer (i.e., the amount of time a worker actually works on a computer while it is on the assembly line). • Direct Labor Idle Time per notebook computer assembled (i.e., the amount of time workers are idle per computer assembled). • Inventory on the assembly line • Flow Time for a notebook computer Note that Station 9 is somewhat more complex than the others. Two facts are important: (1) software loading does not require an operator (it’s like waiting for your computer to start up) and (2) Station 9 occupies three “spaces” on the line. Because the conveyor belt moves continuously, a given computer therefore spends three times as long in Station 9 as in the other stations. The worker for Station 9 moves as needed among the three computers within Station 9 to perform the tasks requiring an operator. Upcoming Assignment: To prepare for Class 4, each learning team should receive a bag of materials today from your OPIM 631 professor for the work methods exercise. Refer to Class 4 for your team assignment which is due by 4:00pm Tuesday, November 9. Class 3 • • • • Monday, November 8 Case:

Bottleneck Analysis Analysis of a Continuous Process

NATIONAL CRANBERRY COOPERATIVE

[CB]

The National Cranberry case is a “classic” and has become a point of reference for nearly everyone who has attended business school. A common pitfall in analyzing the case is to become mired in too much detail, so be careful to maintain the big picture while addressing the questions. For the purposes of your analysis, you may assume that the Flow Time of the National Cranberry process (starting after the holding bins) is 1 hour (i.e., it takes 1 hour for a cranberry to flow through the plant). Questions: (1) What are the problems facing receiving plant No. 1 (RP1)? (2) Draw a Process Flow Diagram of the cranberry process beginning with Receiving and ending with the Bailey Mills (i.e., ignore Sorting and Shipping at the end of the process). (3) Compute the Capacity in barrels per hour of each process step. (4) Consider a peak harvest day (18,000 barrels of berries unloaded with 70% of them wet harvested). Assume that trucks arrive uniformly over a period of 12 hours. Identify the Bottleneck of the process. (5) When would processing be completed on a peak day? OPIM 631

Course Outline and Assignments

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(6) When would the last truck unload and how long would it have waited? (7) If you were Hugh Schaeffer, what changes would you make to improve performance of the process? Estimate the magnitude of the costs and benefits of these changes. Class 4 • • (with learning team) Wednesday, November 10 Case:

Process Design Work Methods

WORK METHODS DESIGN EXERCISE

[CB]

Assignment Due: By 4:00pm on Tuesday, November 9, please visit http://grace.wharton.upenn.edu/courses/opim631/workmethods.html and enter your responses to the study questions. PLEASE SEND ONLY ONE RESPONSE PER LEARNING TEAM. In this class we examine the concept of time standards in the context of a hypothetical business situation requiring start-up production of a simple electronic circuit board. On Wednesday, November 4, each learning team should have received a plastic bag containing the materials necessary for the exercise. Each team must return the bag and its contents in class today. Bill of Materials (BOM) Quantity 2 1 1 1 1 1 1 1 1

Item 1.5-Volt batteries Battery holder Wire stripper/cutter Integrated circuit (IC) chip Capacitor Light-emitting diode (LED) Breadboard Red wire (spool) Black wire (spool)

After reading the case and appendix, prepare responses to Questions 1 - 4 on page 2 of the case. We also ask you to estimate the direct labor content of a unit (“Question 0”). Class 5 • • Monday, November 15 Reading:

Variability and Process Performance Simulation

OPIM NOTE ON VARIABILITY

[DISTRIBUTED IN CLASS]

Up to now, we have not focused on the impact that variation in process times has on process performance. In this class we will demonstrate a discrete-event simulation tool which is commonly used in industry to evaluate processes subject to normal variation. Questions: (1) Complete exercises 1 - 4 at the end of the OPIM note on variability. Class 6

OPIM 631

• • • •

Managing Variability I

Course Outline and Assignments

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Wednesday, November 17 Case:

Queueing Analysis

BEAU TIES LTD. OF VERMONT

[CB]

The Beau Ties case provides a context in which we can use the queueing analysis tools learned in the course. The case also illustrates how operational excellence can enhance competitive advantage. Questions: (1) What are the arguments for and against bring the call center in house? (2) Consider an average Monday morning between 9-10am as described in Exhibit 5. How many phone operators would Beau Ties need to ensure a waiting time of below 3 minutes? How many for 2 minutes? 1 minute? Assume that the coefficient of variation of service time and inter-arrival time is 1. (3) Given Kenerson's target of an average wait of less than three minutes, develop a telephone staffing plan for December 4, 1995, assuming that the distribution of phone calls throughout the day follows the hourly distribution in Exhibit 5. (4) What do you recommend that Kenerson do with the call center? Class 7 • • • • Wednesday, November 22 Case:

Managing Variability II

MANZANA INSURANCE

[CB]

This case deals with performance assessment and improvement of a service operation in insurance, a market highly sensitive to response time. We will explore how response time differences have affected the relative performance of competitors, how operating and sequencing procedures affect response time, and what options are available to management for improving procedures and performance. Questions: (5) What are the most important measures of operating performance for the Fruitvale branch? (6) Why have profits been deteriorating over the past several quarters? (7) What is your assessment of the rules used to assign priorities and guide operations at Fruitvale? (8) What should Bill Pippen recommend? Class 8 • Wednesday, November 24

Summary of Process Management

In this class we will review key concepts and clear up points of confusion. If there is anything we have covered that is not clear to you, your job is to come to class with a well-formulated question. Class 9 • • • • • (assignment can be done anytime) Monday, November 29 Readings: OPIM 631

Bottleneck Management Production Control

THE GOAL (book) - READ ONLY THROUGH PAGE 264! Course Outline and Assignments

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THE GOAL is an international best seller (more than 1 million copies sold) and has become a common point of reference for those involved in operations management. (For example, one commonly hears the phrase “Where’s Herbie?” when addressing a capacity issue.) In this session, we will discuss the key insights of the book, and identify potential weaknesses in its message. Questions: (1) Draw a top-level process flow diagram for Alex’s factory. You may wish to first focus on the NCX-10 and then aggregate the rest of the machines into three categories of process steps: those that precede the NCX-10, those that follow the NCX-10, and those that neither precede nor follow the NCX-10. (2) How does production control work in Alex’s factory? In other words, given a set of orders to be produced, what is the scheme by which work is released to the factory, and what is the scheme by which work is prioritized at each process step? (3) What did Alex conclude is 'The Goal' for his factory? (4) What steps did he take to improve performance (as measured by this goal) in his factory? (5) What did Alex learn on the hike? Class 10 • • • • • • • • Wednesday, December 1 Case:

TAKE HOME QUIZ (INDIVIDUAL ASSIGNMENT)

STONEHAVEN, INC.

[DISTRIBUTED IN CLASS]

The Stonehaven Case is a take-home quiz that is to be done individually. This is essentially a practice exam ("practice" in the sense that the assignment does not count very much towards your final grade) to test whether or not you have mastered the basic process analysis material in this course. You should do this by yourselves. We ask that you do not consult with anyone other than your instructor about the case or the assignment. Class 11 • • • Monday, December 6

Toyota Production System Process Improvement

Case:

TOYOTA MOTOR MANUFACTURING, USA INC.

[CB]

Reading:

MBPF SECTION 10.4 TRIUMPH OF THE LEAN PRODUCTION SYSTEM (SKIM)

[CB]

We use the Toyota case in part as a “plant tour” to illustrate the Toyota Production System (TPS). We also discuss a specific problem at the Georgetown, Kentucky plant. This session serves to link the material on process analysis with the material on process improvement. Questions: (1) 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?

OPIM 631

Course Outline and Assignments

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(2) Where, if anywhere, does the current routine for handling defective seats deviate from the principles of the Toyota Production System? (3) What are the underlying causes of the problems facing Doug Friesen? Class 12 • • Wednesday, December 8

Quality in Service Operations Process Improvement

CASE:

MASSACHUSETTS GENERAL HOSPITAL: CABG SURGERY

[CB]

READING:

CONTROLLING VARIATION IN HEALTH CARE: A CONSULTATION FROM WALTER SHEWHART

[CB]

Using the MGH case, we explore the question of whether or not operations management techniques can be applied to a service-intensive operation like heart surgery. Questions: (1) (2) (3) (4)

What is MGH trying to do and does it make sense? How should MGH define and measure quality for CABG Surgery? Does reduction of cost imply reduction in quality for CABG surgery? How can MGH use tools drawn from manufacturing like Statistical Process Control and Total Quality Management? (5) What should David Torchiana do?

FINAL EXAM

OPIM 631

Monday, December 20, 1:30-3:30pm

Course Outline and Assignments

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