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OM in the News: Newest Workers at Lowe’s are Robots

October 30, 2014
Meet OSHbot, Lowe's newest sales associate

Meet OSHbot, Lowe’s newest sales associate

Lowe’s is introducing the OSHbot robotic shopping assistants next month, the first retail robot of its kind in the U.S., writes The Wall Street Journal (Oct. 28, 2014). The OSHbot will greet customers, ask if they need help and guide them through the store to the product. Besides natural-language-processing technology, the 5-foot tall white robot houses two large rectangular screens—front and back—for video conferences with a store expert and to display in-store specials. The head features a 3-D scanner to help customers identify items. OSHbot speaks English and Spanish, but other languages will be added. OSHbot is “solving a big problem,” says a Lowe’s executive. “It is a way to bring more shopping convenience and some of the benefits of e-commerce into a physical store.”

As customers follow OSHbot to the correct aisle, they will see ads for in-store specials on its back screen as they pass various departments, communicated through in-store beacons. Customers who need help with, say, a specific type of plumbing project can initiate a video conference on OSHbot’s front screen with available experts at any store. OSHbot also can help customers match a certain-size nail or hinge with a 3D-scanner and determine immediately if the part is in stock. In the future, OSHbot may be able to create the part with a 3-D printer.

To navigate the store, OSHbot uses lasers to sense its surroundings, the same light detection and ranging system (called Lidar) used by Google’s autonomous cars. OSHbot creates a map of its surroundings using technology called simultaneous localization and mapping that it can refer to later. By matching the map it creates to the store map of where products are located in the store, it can lead a customer to a specific hinge or hammer.

The bottom line: There haven’t been more robots in stores to date because the technology hadn’t matured enough, but that is changing.

Classroom discussion questions:

1. How feasible is the use of robots like OSHbot throughout  the retail sector?

2. Provide other examples of the use of service robots. (See our blog on room service robots).

OM in the News: Gearing Up Capacity at FedEx and UPS

October 27, 2014

fedexFacing an even bigger mountain of packages this holiday season, FedEx and UPS are hiring more workers to avoid the delays that frustrated shoppers and gift-recipients a year ago. Last December, the delivery giants were caught off-guard by bad weather and a surge in last-minute online shopping, writes Supply & Demand Chain Executive (Oct. 24, 2014). An estimated 2 million packages were late at Christmas. FedEx expects deliveries between Thanksgiving and Christmas Eve to rise 8.8% over last year, to 290 million shipments. Volume is expected to surge in December, with FedEx predicting a peak of 22.6 million shipments on Monday, Dec. 15.

The delivery companies are benefiting from a strengthening economy and optimism about consumer spending. At the same time, they’re dealing with consumers who increasingly enjoy the ease of shopping on computers and mobile devices but expect the goods to show up almost as quickly as if they had shopped at a store. “Every single year the percentage of retailers offering free shipping goes up,” said an industry expert. “The consumer expects it. The retailer may or may not be able to afford it.” Target has started offering free holiday shipping for any item on its website, a first for the retailer as it tries to compete better against online rivals such as

FedEx plans to hire 50,000 seasonal workers, up from 40,000 last year. UPS will add 95,000 people, up from 85,000. Last year, both companies wound up scrambling to hire more seasonal employees than they had planned, which increased costs and cut into profits. FedEx also expects to invest $1.2 billion in its ground-shipping network this fiscal year, with most of that going to increase capacity and automation. The improvements have sped up ground delivery by a day or more in 2/3 of the U.S. UPS has also invested to boost shipping capacity during the holidays, and has improved its forecasting and package tracking.

Classroom discussion questions:

1. Which techniques (see Supplement 7) for managing capacity and demand do FedEx and UPS employ?

2. How will the shippers be able to improve over last year’s backlog?

Teaching Tip: Why Supply Chain Management Matters

October 25, 2014

When we discuss supply chains in Figure 11.1 in Chapter 11, we take note of not only first tier suppliers, but 2nd and 3rd as well. Sometimes manufacturers do not pay as close attention as needed down the line, but recent disruptions from tsunamis (Japan) and floods (Thailand) have raised awareness greatly. Ford discovered this all too well when its 2nd tier paint supplier (which made the pigment Xirallic used to produce the metallic look in red and black F-150s, Lincolns, Tauruses, and Explorers) was destroyed in the Japanese earthquake.

That is why this graphic is a useful teaching tool. It was developed by Prof. Andreas Wieland at the Copenhagen Business School (Supply Chain Management Research, Oct. 12, 2014).why-scm-matters

OM in the News (and Video Tip): Formula 1 Pit Stops and the Gilbreths

October 23, 2014

pitstopFrank and Lillian Gilbreth, the pioneers of time and motion studies, would smile with approval as they watch this 2-minute video comparing F1 racing pit stops in 1950 and today. If you follow F1 racing, it comes as no surprise that pit stops have been reduced to an amazing 2 seconds!

The role of the pit has changed dramatically over the years, writes OR/MS Today (Oct., 2014). For much of racing history, cars would only stop in the event of problems. Scheduled tire changes or fuel stops were not part of the equation. But in 1982, an analytically-minded UK race team focused on 2 important facts. First, softer tires stuck to the track better than harder ones, though they wore out more quickly. Second, less gas in the tank translated into a lighter, faster car. Calculations showed that time spent changing tires and refueling was more than offset by performance on the track.

The idea quickly caught on, making pit stops–and their efficient execution–an integral part of racing. But in 2010, when F1 racing instituted a no refueling policy (out of safety concerns), the stage was set for lightening-fast tire changes. Achieving a 2-second tire change required optimizing the entire process. Analysts looked at everything from the design of wheels nuts (1 per wheel on F1 cars), to special self-positioning pneumatic guns that remove and tighten each nut. They then turned their attention to the pit crews. Teams of 3 work on each wheel, one to remove the old tire, one to position the new one, and one to operate the gun. Their moves are choreographed down to the position of their hands and feet from start to finish. With 2 jack operators and other workers, as many as 20 people crowd around a car during a pit stop–for 2 seconds of work.

What a great example of methods analysis (see Figures 10.5- 10.7) for Chapter 10.

Classroom discussion questions:

1. Try to create an activity chart for the pit stop from the video, using Figure 10.6 and Solved Problem 10.1 as models.

2. How does this differ from the NASCAR pit stop described in the Global Company Profile that opens Chapter 10 on pages 396-7?


OM in the News: Perception vs. Reality in the Supermarket Checkout Queue

October 21, 2014

supermarketStanding in the supermarket queue, you note that other customers are seamlessly drifting forward in their appealingly shorter lines. Should you should stay put, switch lanes, or just head home empty-handed? One research study found that reduction in wait times for express-lane customers didn’t offset the overall increase in wait times for everyone (Five Thirty Eight, Oct. 16, 2014). So would it be better if the supermarket didn’t have an express lane — or, better yet, if it got rid of multiple lines altogether and had all customers join a single long line where there were no winners and losers. Our math in Module D shows that the single line is the best approach. But is it really?

If single lines reduce wait times by so much, why do stores queue us in separate lines for each cashier? One reason is that models overestimate the difference between single and multiple lines because they don’t take into account some human behaviors. Maybe you know who the fastest cashier is. Maybe you switch lanes (“jockeying”) or simply ditch your items and leave (“reneging”). Those behaviors reduce the average wait time in a multiple-line queueing system and bring it a little closer to a single-line system.

In addition, perceptions don’t always match up with reality. The longer we stand in line, the more the gap between perceived and actual wait time grows. By the time we’ve been in line for 5 minutes, we think we’ve been waiting for 10. (See “Why We Buy,” by P. Underhill). So rather than simply shoving us all into one line, supermarkets are exploring three alternatives to reduce both our actual and perceived wait times. First, customers waiting in line can have their items scanned by roaming tellers with hand-held machines, to reduce their service time once they finally reach the cashier. Second, customers can register their place in line, go away, and come back once it’s their turn (like grabbing a ticket from the deli counter). The 3rd strategy: distraction. You can try to entertain customers with videos and in-line merchandising.

Classroom discussion questions:

1. What is the main reason supermarkets do not use a single checkout line?

2. What other alternatives can stores use to speed up the lines?

OM in the News: How the McLaren Racing Team Sped Up Heathrow Airport

October 19, 2014

mclarenThe McLaren Formula 1 Racing Team has long had a reputation as a data-obsessed racing operation, writes BusinessWeek (Oct. 6-12, 2014). So the company decided 5 years ago that the highly specialized expertise it’s developed in data analysis, simulation, and decision support is something that businesses would profit from and pay for. Among its projects, McLaren’s Applied Technology Group has designed health monitoring systems for sick children, helped data center operators to better manage spikes in demand, and created a scheduling system for Heathrow Airport that reduces flight delays.

Air travel, like racing, is a realm where things often don’t quite go right. The limited supply of Heathrow airport gate slots and runway space and the inevitability of poor weather combine to create a tightly coupled network where delays and bottlenecks can quickly ripple across continents. The managers at airports who coordinate arrivals and departures have to deal with planes that took off the day before—some already late or rerouted—and to figure out how best to bring them in. Heathrow presents a particularly intricate puzzle. It moves more people than all but a couple of airports in the world, yet it has only 2 runways—Chicago’s O’Hare, by comparison, has 8. And local environmental and noise regulations restrict flights to between 6 a.m. and 11 p.m.

Prior to McLaren, scheduling had relied on a computer program that looked at a few “study days” from the past season, usually idealized days in which little went wrong. McLaren created a software tool that models bad days as well as good ones and simulates the effects on global air traffic of events such as a blizzard in Frankfurt or fog in Singapore. That’s enabled the airport to better plan for delays and, as a result, to increase its capacity.  For example, if it becomes clear by midafternoon that Heathrow simply won’t be able to handle all of its remaining scheduled arrivals before the 11 p.m. cutoff, the software will recommend how to proceed based on Heathrow’s priorities. Cancel the fewest flights? Preserve the most connections? Favor long-haul flights over shorter ones?

Classroom discussion questions:

1. To what other elements of airport operations can simulation be applied?

2. Why is simulation important to McLaren?

OM in the News: Nurses, Ebola, and the Subject of Quality

October 17, 2014

ebolaWith Ebola leading the news every day, I am reminded of the words of Dr. Edwards Deming:  management needs to accept responsibility for quality in building systems. Deming believed an employee could not, on average, exceed the quality of a process’ capability. (His famous 14 points are summarized in Table 6.2 on page 212). Now with some nurses being blamed for the lax Ebola virus procedures in Texas, we are seeing a response from the leading nursing association.

Following news that the first U.S. nurse has now tested positive for the Ebola virus, National Nurses United (NNU, Oct.12, 2014) called for all hospitals to have in place the highest standard of optimal protections, including Hazmat suits, and hands-on training to protect all RNs, other hospital personnel to confront Ebola . NNU’s new survey of 2,000 nurses  shows:

  • 76% still say their hospital has not communicated to them any policy regarding potential admission of patients infected by Ebola
  • 85% say their hospital has not provided education on Ebola with the ability for the nurses to interact and ask questions
  • 37% say their hospital has insufficient current supplies of eye protection for daily use on their unit; 36% say there are insufficient supplies of fluid resistant/impermeable gowns in their hospital
  • 39% say their hospital does not have plans to equip isolation rooms with plastic covered mattresses and pillows and discard all linens after use; only 8% said they were aware their hospital does have such a plan in place

Not having supplies; not having equipment; not educating employees; not having a plan. All of these are systems problems, not employee problems, Deming would say.

Classroom discussion questions:

1. Who is responsible for setting quality standards and processes for Ebola treatment and prevention?

2. Which of Dr. Deming’s 14 points particularly apply in this situation?

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