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OM in the News: Retailers Check Out Automation

July 21, 2017

The Cash360 machine now in the back rooms of most of Wal-Mart’s 4,700 U.S. stores.

Shopping is moving online, hourly wages are rising and retail profits are shrinking—a formula that pressures retailers, ranging from Wal-Mart to Tiffany, to find technology that can do the rote labor of retail workers or replace them altogether. “Many U.S. retail jobs are ripe for automation, with 2/3 at high risk of disappearing by 2030,” reports The Wall Street Journal (July 20, 2017).

Self-checkout lanes can replace cashiers. Autonomous vehicles could handle package delivery or warehouse inventory. Even more complex tasks like suggesting what toy or shirt a shopper might want could be handled by a computer with access to a shopper’s buying history, similar to what already happens online today. “The primary predictor for automation is how routine a task is,” says a Citi researcher. “A big issue is that retail is a sizable percentage of the workforce.”

Nearly 16 million people, or 11% of nonfarm U.S. jobs, are in retail. Now, as stores close, these jobs are disappearing. Since January, the U.S. economy has lost about 71,000 retail jobs. Automation is filtering through many parts of retail. Tiffany is using machines to polish jewelry. Home Depot has self-checkouts in most stores and is testing scanner guns for shoppers buying bulky products like lumber.

Wal-Mart has long squeezed efficiency out of its business. Although it employs 1.5 million people in the U.S., it has around 15% fewer workers per sq. ft. of store than a decade ago. Its U.S. stores now have a Cash360 machine, making thousands of positions obsolete. Employees whose task was to count cash and track the accuracy of the store’s books have been replaced by the hulking gray machine that counts 8 bills per second and 3,000 coins a minute–then digitally deposits the money at the bank.

Classroom discussion questions:
1. What other jobs are likely to be replaced by automation in the coming decade?

2. Why is this an OM issue?

MyOMLab: Improvements for Fall–Part 3

July 19, 2017

Here are four more upgrades we have made to MyOMLab for Fall 2017Click for details

OM Simulations Each of these 4, self-contained simulations help students employ critical thinking and analysis to make OM decisions in realistic business contexts. From inventory management for a new tech product to forecasting fuel consumption, students gain valuable exposure to how OM works in the real world, learning key course concepts as they go. Topics Include: Inventory Management, Quality Management, Project Management and Forecasting. (If you are one of our over 500 adopters who is still not using MyOMLab, this one feature alone makes the learning system worthwhile!)

Automatic Grade Sync for Canvas  MyOMLab instructors who have integrated their courses with Canvas have the option to select automatic grade sync, allowing for a seamless way to sync grade data between MyOMLab and their LMS. Automatic grade sync saves time for instructors by transferring grades completely touch-free, eliminating the need to manually transfer grades. Instructors have the option to select all assignments or specific assignments to automatically sync.


Dynamic Study Modules (DSMs) DSMs provide students personalized assistance by continuously assessing their activity and performance in real time. Summer 2017 updates introduce a student dashboard and expand instructor reporting capabilities, giving faculty easier insight into student, and class, mastery of concepts. Five new DSM reports and dashboard views provide instructors with the following: ● A high-level summary of a class’ aggregate performance ● Information on topics where students tended to answer questions incorrectly, but with a high degree of confidence ● An in-depth view into the activity of students who continue to answer questions incorrectly ● Insight on student progress towards completing assigned DSM activities ● Details on student’s specific performance.

MyOMLab Plus Portal Update The overall look and feel of the MyOMLab Plus Course Portal is being refreshed to give instructors a more modern, clean, and user-friendly experience. Improvements have been made to the MyOMLab Plus Portal to allow for easier course organization and management.

MyOMLab: Improvements For Fall–Part 2

July 17, 2017

Here are five more upgrades we have made to MyOMLab for Fall 2017. Click for details

My Course Portal Updates Instructor access to information about courses in the My Courses Portal has been improved! Updates include a refreshed forgotten username/password screen and visible listing of third-party LMS partners. Instructors will also now have the ability to create categories for improved organization and a shortcut for easier access to member sections of coordinator courses via the new pin/unpin functionality.

Shortcuts to Nested Courses Instructors will now have the ability to create a shortcut for easier access to member sections of coordinator courses on the My Courses Portal home page via the new pin/unpin functionality. This functionality is available in both the tile and list view.

Assignment Manager Updates The Assignment Manager is now easier to navigate. The ability to filter assignments by type and “Set Prerequisites” have been nested within drop down menus, and “Individual Student Settings” has been moved to the menu bar.

Gradebook Updates Updates to the options available when managing roster, managing incompletes, and the ability to show/hide class metrics allow instructors to easily access and navigate to the student performance data that’s important to them.

Improved Accuracy of Time-Spent Values Homework assignment inactivity alerts have been reduced from 60-minutes to 30-minutes. If the user does not respond to the alert within 5 minutes, the assignment will be saved and closed. In addition, a 30-minute alert has been added to media assignments. Inactivity alerts will reduce large time-spent values and increase the ability for instructors to track time-spent more accurately.

More to come!

MyOMLab: Improvements For Fall–Part 1

July 16, 2017

The MyOMLab Summer 2017 Release increases levels of customization and flexibility for instructors for in-progress assignments and simplifies the teaching and learning experience with ease of use updates. Here are 4 changes--click for details. More to follow over the next few days!

Improved Organization Both students and instructors can personalize how their MyOMLab courses appear on the main portal page by creating categories to group and sort courses/products. Users can create categories to group courses by semester, discipline, or any other organizing structure: (1) Users can create, remove, rename, or move, categories in the My Courses Portal; (2) Categories can be created on all page views: Active, Inactive, and Nested; and (3) After setting up categories, they will be visible with expand and collapse options.

Increased Customization of Assignments MyOMLab instructors will now have even more flexibility to edit homework assignments. Instructors are able to modify in-progress homework assignments and remove questions even after students have already completed and submitted the assignment. You simply select the “Remove Questions” option within the “Actions” drop down menu. Questions removed from an assignment will become unavailable for students to access. All students, regardless if they have submitted results or not, will automatically receive full credit on removed questions. After the question is removed, it will remain visible but appear struck-through within the assignment manager.

Late Submissions and Penalties for Quizzes and Tests Updates to assignment settings allow for instructors to have even greater control and flexibility when creating quizzes and tests. Instructors may configure quizzes and tests to allow for student submissions past the due date and set a late submission penalty. Within quiz and test settings, instructors may allow students to work and submit after the due date. Instructors have the option to deduct points from a student’s score for late submissions. If a student begins a quiz or test after the due date, the student will be notified of the penalty for the late submission prior to beginning the assignment.

Assignment Manager Updates  The Assignment Manager is now easier to navigate. The ability to filter assignments by type and “Set Prerequisites” have been nested within drop down menus, and “Individual Student Settings” has been moved to the menu bar.

OM in the News: Why Can’t Houses Be Built Like iPhones?

July 14, 2017

Katerra manufactures whole walls—including windows, insulation, wiring and plumbing—in its factory

The world’s housing crisis has many causes, but there is a stubbornly persistent one that we should have been able to solve by now: Productivity. As prices of components and materials for pretty much every other physical object—cars, cellphones, clothing—have dropped precipitously, it still costs too much to build a building. “Over the past 60 years, productivity in manufacturing has increased 8-fold while remaining basically flat in construction,” writes The Wall Street Journal (July 3, 2017).

Some companies think they have a solution. They are reviving old ideas in construction, including prefabrication and modular building. And they’re applying all the logistics and IT knowledge gained from building the global supply chains that deliver mobile devices, and all the automation pioneered by the automobile and other manufacturing industries.

Take Katerra. It has a 200,000-sq-ft factory in Phoenix where it manufactures whole walls, including all the windows, insulation, electrical wiring and plumbing. Katerra uses an integrated CAD/CAM system that tells all the factory’s automated saws and routers how to produce all the buildings’ components. The same system connects to job-site cranes that lift and place the finished panels. Katerra ships the walls to construction sites, where they’re snapped together like Lego bricks. The company’s goal is to build 7 more factories in 2 years, each intended to serve a different geographic area.

Katerra is responsible for its buildings from design to final construction, which allows it to further cut costs. In consumer electronics, “design for manufacturability”—the reconfiguring of a device’s shape and function to make it cheaper to build—is standard. Another thing Katerra borrows from that industry: buying goods in bulk, direct from suppliers.

Classroom discussion questions:
1. What is design for manufacturability? Give an example.

2. Of what type of layout is this an example (see Ch. 9)?

OM in the News: The City That iPhone Built

July 11, 2017

Foxconn iPhone workers walk between Zhengzhou Foxconn factories

It was 2010 and the iPhone was coming to a new industrial town on the edge of Zhengzhou, China that would be known as iPhone City. One year later, Foxconn, the manufacturer, said the iPhone factory complex had 100,000 workers. Today, it employs 250,000 at the plant. The company makes 150 million iPhones each year, along with 20 million iPads.

“With Apple embracing outsourced manufacturing in Chinese cities, the iPhone’s success in the decade since it launched has fueled China’s rise at the center of the global electronics supply chain,” writes The Wall Street Journal (July 5, 2017). The explosion of higher-tech manufacturing was encouraged by Beijing as leaders sought to move factories up the value chain from making plastic toys and clothes. That shift transformed the lives of millions of Chinese, bringing jobs but also leading to complaints from workers of repetitive labor, restrictive work rules and poor living conditions.

The move to Zhengzhou followed a spate of suicides in 2010 at Foxconn’s other iPhone factory in Shenzhen, along the coast where wages were higher. “We hold our suppliers to the standard we hold ourselves: They must treat everyone with dignity and respect,” said Apple. Apple said wages and working conditions at its suppliers have improved significantly in the past 5 years.

Like American company towns a century ago—Pullman, Ill., Hershey, Pa., and Henry Ford’s Detroit—iPhone City revolves mainly around a single product, and it depends on that product for its wealth. During last fall’s rush to make the iPhone 7, when Foxconn was short-handed, state-owned coal companies lent workers to Foxconn. In past years, the province issued quotas to local authorities stating how many workers they needed to produce for Foxconn.

Classroom discussion questions:

  1. Why doesn’t Apple manufacture iPhones in the U.S.?
  2. What has China’s government done to assist manufacturers such as Foxconn?

OM in the News: Why GE Builds More Factories Overseas

July 9, 2017

The GE factory under construction in Marhaura is scheduled to produce 1,000 locomotives for Indian Railways.

GE could hardly have picked a less hospitable spot for its new locomotive factory—but then again, it didn’t have much choice. The land in Marhaura, India regularly floods in the rainy season. The facility required concrete pilings poured 82 feet below ground, on account of earthquakes. When finished, the factory—the centerpiece of a $200 million investment—will sit 600 miles southeast of Delhi in the state of Bihar, a place with a rich history of government corruption scandals.

“To win big contracts, GE is trading a global footprint designed for maximum efficiencies of scale for one that means greater face-to-face exposure in local markets,” writes The Wall Street Journal (June 30, 2017). The remoteness of the Marhaura factory adds cost and complexity to the locomotive project. This is GE in the age of localization—a series of factors that are forcing manufacturers to put down deeper local roots to win business.

Once-impoverished nations such as India, China and Indonesia are becoming economic powers and demanding that companies not just ship them goods, but invest/build locally, teach local workers new skills and share technological know-how. GE has established engineering and research centers in nations such as Poland, Mexico and Qatar, and flexible factories in countries such as Brazil and India, which can easily switch production lines in case political winds or market preferences change.

In 1982, 80% of  GE’s revenue came from the U.S. Today, it’s only 30%. Back then, GE operated 135 factories in 25 foreign countries. Now it has 325 plants across 40 countries. Jobs have followed the changes. GE employs 104,000 workers in the U.S., compared 261,000 workers in 1982. In China, GE’s workforce has doubled in the past decade to 22,000.

Classroom discussion questions:

  1. Discuss GE’s decision to locate in Marhaura–plusses and minuses.
  2. What factors should a firm consider in global location decisions?
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