Today''s online class had the twin goals of (a) introducing ourselves to inventory management concepts, and (b) getting you to begin thinking about case study part 3.
Your case studies provided great examples of inventory concepts applied to manufacturing, distribution/retail, and service organizations. While the core issues and inventory types are different, all businesses have inventory to manage. See Dan & Ethans's post for good discussions of inventory in manufacturing (both small and large plants). Korey and Quin provide us with windows into distribution and retail inventory management challenges, while Karson and James help us consider inventory management in service organizations. And by the way, excellent follow-up questions to Andrew & Korey's posts!
The videos below support/reinforce our reading and the application you've already made in your posts. See the 3 Types of Inventory video for a helpful review of raw material, WIP and finished goods.
The Modernizing Inventory Management video is a nice mini-case study of inventory management in a small retail business. The clip is 5-years old, so you'll notice shots of some old computers, but the principles are the same. See how many concepts from chapter 12 you can identify at Cole Hardware.
Our formulas for process and "shop" capacity in Collier (2013) chapter 10 are important ones. The proper application of these formulas can help to answer important questions about the ability of our process to meet demand.
Today's case applied two of our capacity formulas to a service environment, specifically a orthopedic surgery medical practice. In the video below I walk through the application of the formulas to the specifics of the David Christopher case. Take a few minutes to compare the discussion below to your own analysis and post.
Note: you'll definitely need to expand the view to full screen... sorry for the tiny numbers!
So now, how are these tools applied at your case study company? If they are not used, how could they be applied to improve the firm's operations management?
So kudos to those of you who resourceful and brave enough to find and post a process video! Yes, that would be Quin and Malcolm!
Quin provides us with an opportunity to discuss service process design, particularly service encounter customer contact requirement, and process design in the context of the service positioning matrix (Collier & Evans, 2013, p. 140-143).
In fact, instead of me doing this analysis for you, let's do it together on Monday morning. So for Monday, watch Quin's brief video, read his post, and think about these questions referring to Collier chapters 6 & 7...
What is the service encounter customer contact requirement for library copier services?
What degree of customer discretion, freedom and decision-making power is needed?
How repeatable should the service encounter process be?
Where does this process fit on the service positioning matrix, and what are the cost and service quality perception implications?
A special shout-out to Shaina for excellent follow-up questions, and Karson for the process flowcharting expertise demonstrated in her post!
Nice work this week on your Cause & Effect (CE) diagrams (also known as "fishbone" diagrams) and Pareto charts.
The three brave souls -- Ashlyn, Karson & Shaina -- who took to MS Word to draw their diagrams did nice work not only with the drawing tools, but brainstorming potential causes and contributors related to their identified problems. These charts are very useful in starting the root cause analysis conversation; it sets the table with all the possible causes and contributors organized in such a way that you can begin to address each in turn.
The Pareto chart provides a tool that helps prioritize the causes and contributors identified in the CE diagram. Thanks to all who used the data in question 11 to create their charts. There was unanimity on which set of errors should be addressed first (shipping delays). Andrew, James & Quin argue that both shipping delays and shipping errors should be dealt with, as these two errors combined account for 80% of the problems. This is the value of the Pareto chart. It quickly stratifies a set of problems identifying which small percentage of your total list of problems are causing most of the pain. Using this tool, then, we found that 2 of problems account for 80% of the error. As a manager, we want to focus first on addressing those two issues; that's where we get the most bang for our buck.
All of our Pareto people worked to create their own charts using Excel. Congratulations! You can never have enough Excel practice. One of the features of a Pareto chart that makes life much easier is the cumulative total curve. I've attached a link above to a Pareto chart template from the American Society for Quality (ASQ), a leading quality assurance professional society. This template is easy to use and will provide both a frequency histogram and a cumulative total curve in your chart.
Just for fun, I've also attached a link to the ASQ fishbone diagram template. Another easy-to-use template for creating CE diagrams.
Thanks for your experimentation with the factor weighting method for determining a potential Save-A-Lot store location. My general feedback is contained in the attached video.
See Ashlyn, Ethan and Quin's posts for some good discussion about the factors to be considered and their weightings. Also note my points in the video regarding the connection between factors selected, their weightings, and operations strategy/CBP).
Here's one of the articles I referred to in the video. It provides some good background on Save-A-Lot's business strategy.
Here's an excellent radio story on Save-A-Lot from the customer perspective. Its worth a listen.
Today's online case presented us with a data set comprised of external and internal data, asking us to find the relationship (if any) between these data, and then develop recommendations based on the relationship found.
Many of you identified the importance of the external data in this data set: customer satisfaction. This is a crucial external measure; if we don't have satisfied customers, we don't have a business. The key in this case was to compare the customer satisfaction data with both the new applicant processing time and the plastic production turnaround time, which most of you did. Our goal is to understand the relationship between customer satisfaction and these internal metrics. Is there a relationship? In other words, does the speed at which we process new applicants and/or produce a new credit card have an impact of customer satisfaction? And if so, how much?
Using Excel to calculate the correlation coefficient between customer satisfaction and new application processing time, you found r = -0.41. The correlation between customer satisfaction and plastic production turnaround time was -0.21. Both of these suggests a negative relationship: customer satisfaction goes down as both of these times go up. But the relative strengths of these relationships is relatively weak. You visually confirmed this in your scattergrams.
Ashlyn, Andrew, James and Korey agree that better information is needed before the business can make any decisions about how to improve customer service. Better customer satisfaction surveys could be a part of this. Ethan gets us to the heart of the matter: our correlation coefficients suggest that while new application processing time and plastic production turnaround time are somewhat related to customer satisfaction, there are other drivers of customer satisfaction not captured in these metrics. To James' point, the departments need to work more effectively together to identify other potential variables (causes) and identify relevant metrics.
Another statistic that can help us understand the strength of the relationship between variables is the coefficient of determination, or r squared. The coefficient of determination tells us how much of the variance in a dependent variable is due to the variance in an independent variable, expressed as a percentage. See the excellent 3-minute video below for more background and discussion.
Take a minute to calculate the coefficients of determination for our case r-values. How much of the variance in customer satisfaction is accounted for by new applicant processing time and plastic production turn around time? What other internal company operations factors might be drivers of customer satisfaction?
Thanks for last week's online discussions of Spencer, White and Vrobelsky (2009) chapters 3 and 5. Spencer and his co-authors do a good job prompting us to think about sustainability from a biblical perspective. Our challenge is to reconcile this biblical view with the realities of 21st century business. Operations managers have perhaps the most direct impact of any managers on the sustainability of any organization. This sustainability discussion is central to our work.
Spencer Chapter 3
Spencer chapter three provides a nice overview of why Christian's should care for the environment. Each of you captured Spencer's four main points. The challenge, of course, is to consider how Spencer's perspective fits (or not) with our definition of sustainable operations from Collier and Evans (2013). Dan and Quin touch on what is perhaps the central question for Christian business people and managers: is there a difference between the "spiritual" and the "secular"? Can Spencer's spiritual perspective be reconciled with Collier's 21st century business perspective, or are they simply speaking to different audiences and issues? Can we apply our ancient faith the how we design and operate our businesses? (I'm exaggerating Dan & Quin's points here for the sake of argument.) Ashlyn, James and Kory think we can. See their posts for some particularly insightful analysis and integration of Spencer and Collier. But is it really that easy? This is where Spencer chapter 5 can be useful in at least helping us to make the transition from theological theory to contemporary reality.
Spencer Chapter 5
Chapter five identifies and develops six practices of sustainable living as found in the Bible. Much of Spencer's discussion is drawn from the Old Testament, beginning with the jubilee regulations. All of your 9/12 posts hint at or specifically identify what Spencer identifies in chapter six as the "controlling idea" for this whole sustainability discussion: the quality of relationships with God and between human beings" (Spencer, et al., 2009, p. 148). Many of you identified concern for the vulnerable as one of the biblical practices identified by Spencer as one of the most important to you. Your discussion of the "roots" and "jubilee" practices was often linked to your observations and thoughts regarding the vulnerable. See James' post for a particularly thoughtful and heart-felt discussion of why jubilee and the vulnerable are so important to him.
So now what?
While the biblical practices Spencer identifies clearly have social elements, his book is written with a slant towards encouraging individual action. Our challenge as business people is to translate and apply this discussion to our role as operations managers. How do we realize these principles and practices in the operation of our business? Caring for the vulnerable is a good example. Several of you identify corporate social responsibility (CSR) efforts as one way to realize this principle in business operations. But are there other ways to address this principle? Check out the Broetje Orchards story for an example of how the Broetje's built concern for the vulnerable into their business strategy. (Click on the image below to go to the First Fruits website.)
http://www.firstfruits.com/founding-dream.html
Thanks for the thoughtful sustainability conversation last week. As you will discover, the Interface story provides us with yet another example of a successful company (this time in the carpet business) integrates sustainability into their business strategy and operations.
Thanks for taking on the challenge of translating the data from Collier & Evans (2013) chapter 18, problem 6 (p. 409) into a Gantt chart. As we discussed in class earlier in the week, one of the critical aspects of Gantt (and CPM charts) is to clearly identify predecessor activities or tasks. When a specific activity has a predecessor activity, that means the new activity cannot begin until the predecessor has been completed. Once predecessors are identified and entered into the Gantt chart tool, the chart produced will provide a helpful visual representation of parallel project activities, and give you a view as to how delays or accelerations in activity progress will affect the project schedule.
One of the most confusing activity-predecessor relationships is activity J: prepare report. Before the report can be prepared, activities E, G and I must be completed. If you think about the content of activities E,G & I, this makes sense. We can't write the report until we've studied the existing technologies (E), conducted an equipment analysis (G), and determined the organizational impacts (I). Of these three activities, activity G is the one that ends at the latest date (based on its start date and estimated time of 10 days). So, we cannot begin to prepare our report (J) until activity G is completed, even though activities E and I will be complete well before G.
Check out Ethan's post for a good example of how a Gantt chart for this project should look.
Regarding the OM case study
Only Karson and Ethan had questions about the case study assignment. You may have the similar questions... check out Karson and Ethan's questions, and my responses to them, in the discussion board.
Note that our first in-class case study workshop is twelve days from today on September 17. You'll be bringing your first draft of part 1 to class that day for discussion and feedback. If you have any remaining questions about the assignment or your target company, bring those with you on Monday September 7 so you can get started on case study part 1 sooner rather than later.
Hello friends, Nice job with our first online class of the semester, reflecting on the Zappos case in our text. Your responses to the questions were generally on-point, as your replies were relevant. Let me highlight a few concepts that will be helpful as we move into the semester. Customer Benefit Package & the Role of Service The Zappos story is a good example of how the total CBP can be used to address customer needs. The question 1 crew did a nice job identifying peripheral and variant services, particularly those related to the call center and Zappos' unique customer
service policies. Karson highlighted an important aspect of Zappos' customer service in her question 2 post: while the call center is important, the vast majority of Zappos'interactions with the customer - their moments of truth - are online. The functionality, look and feel of the website is as important as the call center experience. Linking their enterprise resource planing system to the customer interface ensures customers and employees have access to the same inventory data. We will refer back to the CBP often during the semester. Likewise, the service encounters and service management will be a recurring theme. The Zappos case illustrates the central importance of the CBP to our operation strategy, and the role of services in that package. Simply offering a great primary product or service is not enough to develop a sustainable business. Our primary product or service will be part of a bundle of goods and services, our CBP, that comprise our entire customer offerings. We'll be successful to the extent that our CBP doers a better job solving customer problems than our competitors. Sustainability Though our case questions did not directly address sustainability, do pay attention to the definition offered by Collier & Evans (2013), as this too will be a recurring theme for us this semester. The definition builds on early conceptions of sustainable development research conducted by the United Nations, effectively adapting those concepts to the commercial environment. Meeting the current needs of the business while avoiding negative impact on future generations is central to this definition. Also make note of the three measurement categories (environmental, social & economic) which will come up again during our more in-depth sustainability discussions in the coming weeks. Thanks for your contributions this week. Enjoy the long weekend. See you in the classroom next Wednesday!
.jpg)