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OM in the News: Looking Back–and Forward–on Productivity

September 29, 2014

productivityFrederick Taylor revolutionized manufacturing at the turn of the 20th century with a simple insight. Most manufacturing work was a sequence of physical motions. You would load coal onto a shovel, carry it to a furnace, throw it into the furnace, walk back to the coal pile and repeat. In a time and motion study, he quantified each step and how long it took. Then he analyzed how to improve the whole process. He noted, for example, that a typical worker could lift 21 pounds for maximum efficiency. Workers varied in size and strength, but on average this weight balanced the number of shovel lifts per minute against the volume per lift. In those early days, workers used the same shovel for all materials, regardless of the density of the stuff being lifted, so less weight was being lifted for the less dense materials. Taylor’s elegant and simple solution — bigger scoops for shovels used to haul the less dense materials — illustrates how careful analysis of a specific work process can increase productivity.

Today, his time and motion studies seem antiquated. Phone calls and memos have replaced shovels and picks for many workers. “Yet despite its association with early factories, a modern version of the spirit of Taylorism is sorely needed,” writes Harvard’s Prof. Sendhil Mullainathan in the New York Times (Sept. 28, 2014). “It’s time to identify and optimize the specific psychologies that constitute the mental alchemy of productivity,” he says.

In one Stanford experiment, some workers were randomly assigned to work at home, others worked in group call centers. The work habits of both groups were carefully monitored electronically, and the workers knew it. Those working at home were 13% more productive than those in call centers. With modern technology, we now have so many ways to quantify, track and motivate productivity, and are just beginning to scratch the surface of doing so..

Classroom discussion questions:

1. Why is productivity such an important issue in OM?

2. Describe how time and motion studies are conducted (see Chapter 10).

OM in the News: Making American Factory Workers More Tech-Savvy

September 27, 2014

apprenticeshipGerman robotics company Festo AG wants to make American factory workers more tech-savvy. As robotics take an ever more prominent role on factory floors, training workers and keeping their skills up-to-date has grown in importance, writes The Wall Street Journal (Sept. 10, 2014). Festo sees in the U.S. “a mismatch in the labor market between what businesses need and the kind of education young people are getting,” said its CEO. The firm is banking on growing demand for German-style vocational education in the U.S. In Germany, companies take on full-time apprentices as young as 16 and provide both theoretical and hands-on training in technical skills the companies need. Such programs usually last two years and results in a certification that is recognized across the industry.

About 2 million U.S. jobs go unfilled because of shortfalls in skills, training or education. Of those, roughly 600,000 are jobs that require more than a high-school diploma but less than a bachelor’s degree. One-third of U.S. job openings through 2020 will require such middle skills, with a vocational certificate, industry-based certification, some college credits or an associate degree—but not a classic four-year college degree. “American training in these areas has deteriorated since the early 1980s,” says one Georgetown U. professor.

German companies with operations in the U.S. have complained for years that factory workers lack specific skills they require to get the job done. Executives and American policy makers have said the U.S. could benefit from Germany’s approach to apprenticeships and on-the-job training. But the German approach is hard to transplant. “It’s a question of culture,” said an industry expert. “Parents and teachers tell kids that going to a four-year college is the only path.”

Classroom discussion questions:

1. Why has the German system seen slow acceptance in the U.S.?

2. Is there a relationship between productivity and apprenticeship programs?

Guest Post: Teaching Operations Management On-line at St. Petersburg College

September 25, 2014

Wende BrownDr. Wende Huehn-Brown is Professor of Business at St. Petersburg College in Florida

Last year I was a guest on Jay and Barry’s OM Blog who shared some tips from my experiences teaching operations management from the Heizer/Render text in on-line courses. Now, a year later, I wanted follow up this discussion with further evidence on the value that pencasts (my Guest Post on January 12, 2013) and screen captured videos (my Guest Post on July 2, 2013) had on student success rates.

To emphasize the impact that these visual and recorded methods had on my students, let me share my student success rates this year in comparison with last year. Student successes are defined here as the portion of students earning a C or better as their final grade.  Please understand as you consider these percentages, I do have a fairly large withdrawal rate in online courses and students that withdraw are in the denominator.

Modality Spring 2013 Spring 2014
Online 56.5% 73.1%
Blended 92.0% 88.0%

Obviously, the value of physical meetings to explain concepts and demonstrate the analytics in the active learning activities I do in blended classes is very vital to student success. However, technology today does enable us to replicate some aspects from the classroom.   Since 2013, my use of these recorded media options in my Operations Management course has grown to a total well over 100 pencasts and videos. I am able to reuse these across courses and I focus on study plan problems that are not used on further graded homework, quizzes, or exams.  At the same time, student evaluations have become more positive on the course.

OM in the News: Robots Work Their Way Into Small Factories

September 23, 2014

robotRobots aren’t just for the big guys anymore,” writes The Wall Street Journal (Sept. 18, 2014).  A new breed of so-called collaborative machines—designed to work alongside people in close settings—is changing the way some of America’s smaller manufacturers do their jobs. The machines, priced as low as $20,000, provide such companies—small jewelry makers and toy makers among them—with new incentives to automate to increase overall productivity and lower labor costs.

Robots have been on factory floors for decades. But they were mostly big machines that cost hundreds of thousands of dollars and had to be caged off to keep them from smashing into humans. Such machines could only do one thing over and over, albeit extremely fast and precisely. As a result, they were neither affordable nor practical for small businesses.

Collaborative robots can be set to do one task one day—such as picking pieces off an assembly line and putting them in a box—and a different task the next. Some are mobile and able to range freely inside a factory. The use of advanced sensors means they stop or reposition themselves when a person gets in their way, solving a safety issue that long kept robots out of smaller factories.

Classroom discussion questions:

1. Why will factories always need people?

2. What are the advantages and disadvantages of these smaller robots?

OM in the News: Forced Labor in Apple’s Malaysian Factories?

September 22, 2014

malaysia 2“Nearly 1 in 3 migrant workers in Malaysia’s thriving electronics industry,” writes The New York Times (Sept. 17, 2014), “toils under forced labor conditions, essentially trapped in the job.” The investigation, commissioned by the US government and conducted by the factory monitoring group, Verite, reported that 32% of the industry’s nearly 200,000 migrant workers were employed in forced situations because their passports had been taken away or because they were straining to pay back illegally high recruitment fees.

The report said those practices were prevalent among the migrants from Bangladesh, India, Myanmar, Nepal, Vietnam and other countries who work in Malaysia’s nearly 200 electronics factories. Those factories, which produce consumer electronics, motherboards, computer peripherals and other electronic goods, account for a third of Malaysia’s exports and produce for many well-known companies, including Apple, Flextronics, Samsung and Sony. Verite added that about half of the migrant workers who borrowed for their recruitment fees spent more than a year paying off those fees. The Labor Department commissioned the study because the federal government frowns on the importation of goods made by forced labor.

Thirty percent of foreign workers said they slept in a room with more than eight people, while 22% of the workers said they had been deceived about their wages, hours or overtime requirements during the recruitment process. Almost 46% said they had to pay a bribe, were detained or were threatened with detention or physical harm and 27% of the foreign workers said they could not come and go freely from their housing. Apple’s supply chain, which employs 1.5 million workers worldwide, employs 18,000 in Malaysia, including 4,000 migrant contract workers. Since 2008, Apple said it had helped migrant workers in Malaysia and elsewhere to reclaim $19.8 million in excessive recruitment fees. Apple uses about 30 factories in Malaysia.

Classroom discussion questions:

1. What is the responsibility of Apple and other manufacturers to these workers?

2. Why do these workers come to Malaysia?

OM in the News: Zara Turns to RFID for Inventory Control

September 19, 2014

zara“For more than a decade, radio frequency identification chips were touted as a game-changer for retailers,” writes The Wall Street Journal (Sept.17, 2014). But when they tried to apply the technology, merchants such as Wal-Mart and JC Penny discovered that what looked good on the drawing board didn’t always work so well in warehouses and stores. Now, apparel powerhouse Zara says it has learned from competitors and is rolling out RFID technology throughout its operations. The chips, about twice the size of a mobile-phone SIM card, help the world’s largest fashion retailer keep better track of its stock and replenish its clothing racks more quickly. “It gives us great visibility, knowing exactly where each garment is located,” says the CEO.

RFID chips can store information about whatever item they are attached to and, when prompted, emit that data via radio signals to a scanner. Zara is burying the chips inside its garments’ plastic security tags, an innovation that allows the chain to reuse them after the tags are removed at checkout. The Spanish retailer says it bought 500 million RFID chips ahead of the rollout, or 1 of every 6 that apparel makers are expected to use globally this year.

A major benefit is inventory-taking, a task that used to tie up a team of 40 employees for 5 hours in a Zara store. Now, 10 workers can sail through the job in half the time, waving scanning devices that detect radio signals from each rack of clothing. Before the chips were introduced, employees had to scan barcodes one at a time, and these storewide inventories were performed once every 6 months. Now Zara carries out the inventories every 6 weeks, getting a more accurate picture of what fashions are selling well and which are languishing. And each time a garment is sold, data from its chip prompts an instant order to the stockroom to send out an identical item. Previously, store employees restocked shelves a few times a day.Traditional retailers usually know where 60% of their inventory is at any time. With RFID technology, accuracy levels exceed 95%.

Classroom discussion questions:

1. What benefits accrue from RFID tags in this industry? What are the downsides?

2. Why did Wal-Mart slow its use of RFID?

Guest Post: Total Team Collaborative Learning of OM in Spain

September 18, 2014

flammOur Guest Post comes from Phillip Flamm, who teaches OM in the ISQS Department at Texas Tech University

I have recently returned from teaching operations management this past summer in Texas Tech’s Study Abroad Program in Spain. I divided my 24 students into 8 teams of 3 each with these provisos:

  • Each member of the team will get the same final grade for 80% of the class so they will be forced to help each other
  • Grades will be based on 2 exams (taken as a team), 2 or 3 team presentations, and a peer grade (from team members plus an attitude grade from me)
  • One presentation will be a tutorial of quantitative material
  • The second presentation will be the team solution of an OM case scenario

As part of the class, I also arranged tours of 2 manufacturing plants.

Students studying abroad normally want to talk about what they did and saw while traveling. The teams involved in Total Team Collaborative Learning only wanted to talk about how much they learned and how much they retained. The students truly enjoyed the OM class and the lowest group exam grade was 88/100. (I give the exact same tests during Fall and Spring back in Texas and the average is 64.) This seems to suggest that the teams learned faster, and retained more.

In the Summer Study Abroad 2014, we increased from 15 to 24 students over the prior year, with the final grades staying the same. We:

  • Utilized special power point pages with 3 slides per page, with lines for notes; teams reviewed notes together following lectures to clean up any questions they might have
  • Worked daily quizzes together for a team grade
  • Prepared quantitative teaching sessions 3 times during the month long class
  • Worked homework problems together for a team grade
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