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Abstract/Syllabus:
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15.760B Introduction to Operations Management, Spring 2004. (Massachusetts Institute of Technology: MIT OpenCourseWare), http://ocw.mit.edu (Accessed 10 Jul, 2010). License: Creative Commons BY-NC-SA
Manufacturing operations, such as this plant in Tennessee, can be the basis for careful analysis and continued improvement. (Photograph courtesy of U.S. Department of Energy.)
Course Highlights
Class participation plays a major role in this course, with students working on exercises in addition to the interactive case discussions. Students use the concepts they learned in class to manage a virtual factory in a one-week online simulation.
» Participate in the online discussion group for this course.
Course Description
This half-term course introduces students to problems and analysis related to the design, planning, control, and improvement of manufacturing and service operations. Class sessions involve explaining concepts, working examples, and discussing cases. A wide range of topics are covered, including: process analysis, quality management, supply chain design, procurement, and product development. Toward the end of the course, students work in teams to manage a virtual factory in a web-based simulation exercise.
Syllabus
Course Objective
Our objective in this course is to introduce concepts and techniques related to the design, planning, control, and improvement of both manufacturing and service operations.
In particular, some of the topics covered include: process description, flow diagrams, capacity analysis, capacity ROI, cycle time analysis, inventory management, delayed postponement, production control, work coordination, risk pooling, quality management, process design and reengineering, product development, project management, procurement, make vs. buy and supply chain design.
The course relies on a combination of case discussions, lectures, readings, and assignments. To pursue the course objective most effectively, students will have to:
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Prepare the assigned cases, readings, exercises, and discuss them in class;
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Prepare a written analysis of one case;
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Prepare a one page review of the book The Goal by Eliyahu Goldratt; and
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Manage a virtual plant in a simulation exercise and prepare a written report on this experience.
Academic Integrity
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 Sloan or at another school. In addition, they should work alone when preparing graded individual assignments, and when preparing graded team assignments, discussions should be strictly limited to the members of your team. When preparing any graded assignment, students may not consult or use material not already included in the course packet or posted on the course webpage, unless this has been explicitly authorized by the instructor.
The academic integrity policy of this course will be enforced, and any violators would expose themselves to the most serious consequences (a couple of years ago several students were not awarded a degree in June because of what they had done in 15.760). In addition, students will be held personally responsible for confronting and reporting any violations that would come to your attention. Finally, if at any point during the course the implications of this academic integrity policy on your particular situation are not completely clear, immediately contact the instructor.
Note that this policy implies in particular that students should:
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Never, ever ask for/obtain/use hints or material relative to an assignment from any student or alumni who has already taken the class;
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Never, ever perform a search on the internet to find information relative to a graded assignment without the explicit authorization of the instructor.
Grading and Assignments
The grading of 15.760 will be based on the following weighting scheme:
Class Participation (Individual) |
30% |
Case Write-up (Team) |
30% |
Book Review (Individual) |
10% |
Simulation (Team) |
30% (20% Report, 10% Simulation Performance) |
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Class Participation
Class participation will be determined on the basis of a student's comments in each class session, including discussions of the non-graded assignments and readings. We are highly biased towards comment quality as opposed to comment quantity.
In a typical session, one or more students will be asked to begin each discussion by addressing specific questions. If you have thoroughly prepared the case or reading, you should have no difficulty in handling such a lead-off request. After a few minutes of initial analysis and recommendations, the discussion will be opened to the rest of the class. As a group, we will try to build a complete analysis of the situation and address the problems and issues it presents.
Most managers spend very little time reading and even less time writing reports. This is especially true for managers in operations-intensive settings. For this reason, the classroom should be considered a laboratory in which you can test your ability to present your analyses and recommendations clearly, to convince your peers of the correctness of your approach to complex problems, and to illustrate your ability to achieve the desired results through the implementation of that approach.
Some of the criteria that we will use to judge effective class participation include:
- Is the participant a good listener?
- Is the participant concise and articulate?
- Are the points made relevant to the current discussion? Are they linked to the comments of others?
- Do the comments show clear evidence of appropriate and insightful analysis of the case?
- Is there a willingness to participate?
Case Write-Up and The Goal Book Review
For more information about these assignments, please see the assignments page.
Simulation Exercise
For more information about this exercise, please see the projects page.
Miscellaneous
- We ask that students put out a name card in every class.
- Please refrain from using laptops in the classroom.
- There are only 19 class sessions in this course. We consider this the minimum required to cover the essentials of operations management. Other demands may require you to miss a class, but you should not have more than one such absence. It is difficult to receive a passing grade in 15.760 without regular attendance.
- Please be prepared for every class. Students should let the instructor know before class if an emergency has made it impossible for you to prepare adequately. In these situations we still encourage you to attend. We would rather you attend unprepared than not at all.
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Calendar
1 |
Course Introduction |
Lecture |
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2 |
Burger King and McDonald's |
Case |
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3 |
Capacity |
Lecture |
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4 |
National Cranberry |
Case |
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5 |
Webvan |
Case |
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6 |
Inventory |
Lecture |
Exercises: EOQ, Newsboy |
7 |
Barilla |
Case |
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8 |
Sport Obermeyer |
Case |
Case write-up |
9 |
Production Control |
Lecture |
Exercises: Kanban Cards, Pooling |
10 |
Hewlett-Packard |
Case |
|
11 |
The Goal |
Book |
Book review due |
12 |
Quality |
Lecture |
Exercises: SPC reading, Six Sigma |
13 |
Toyota |
Case |
|
14 |
Process Design |
Lecture |
Simulation exercise begins at 6:00 p.m. |
15 |
Global Financial Corp. |
Case |
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16 |
Supply Chain Design |
Lecture |
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17 |
Product Design |
Lecture |
Simulation exercise ends at 6:00 p.m. |
18 |
Sega Dreamcast |
Case |
Simulation write-up due day after lecture 18 |
19 |
Simulation and Course Wrap-up |
Lecture |
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Further Reading:
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Readings
The required course material includes:
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The 15.760 H2 course packet (includes cases listed below).
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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:
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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.
1 |
Course Introduction |
Lecture |
Course syllabus |
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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. |
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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. |
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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.
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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. |
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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. |
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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. |
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17 |
Product Design |
Lecture |
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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.
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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 |
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Discussion Group
Educators, students, and self-learners interested in "Course 15.760B: Introduction to Operations Management" are invited to interact with others utilizing these materials in their teaching and learning through the Discussion Group for this course.
This service, offered by MIT OCW and hosted by the Open Sustainable Learning Opportunities Research Group in the Department of Instructional Technology at Utah State University, offers individuals around the world the opportunity to connect with each other, collaborate, form study groups, and receive support for their use of MIT OCW materials in formal and informal educational settings.
OLS is a research project that is focused on building "social software" that enables informal learning communities to form around existing open educational content. The fundamental premise of OLS is that full educational opportunity requires a user to have the social access to other people who can answer questions and provide support. Since the sponsors of free and open Web-based materials cannot typically provide this access, the social support must come from other users. Therefore, OLS:
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Operates independently of MIT OCW
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Requires users to register and login to participate
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Is not a degree-granting or certificate-granting program
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Does not provide formal access to MIT or Utah State University faculty
Connect to the Discussion Group for Course 15.760B: Introduction to Operations Management now.
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