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OM in the News: Happiness From a Shorter Workweek Can’t Overcome Costs

January 14, 2017
A Swedish nurse says the 6-hour workday raised her efficiency

A Swedish nurse says the 6-hour workday raised her efficiency

A controversial experiment with a 6-hour workday in Sweden just wrapped up with a cheerful conclusion: Shorter working hours make for happier, healthier and more productive employees. “There’s just one catch,” writes The New York Times (Jan. 7, 2016). “The practice is too expensive and unwieldy to become widespread in Sweden anytime soon.”

The 2-year trial centered on a retirement home where workers were switched to a 6-hour day, from 8 hours, with no pay cut. Seventeen new nursing positions were created to make up for the loss of time, at a cost of $738,000, a year.

The experiment stoked discussion about whether investing in a better work-life balance for employees benefits the bottom line for companies.  But the high price tag and political skepticism are likely to discourage widespread support for taking the concept nationwide. While a growing number of countries and companies are studying the concept of employee happiness, the idea of improving it through shorter work hours has by no means gained broad traction. A similar model in France has been controversial for more than 15 years, ever since a Socialist government made a 35-hour workweek mandatory. Companies of all sizes in France have complained repeatedly that the short workweek has damaged competitiveness and generated billions in additional costs.

In the Swedish experiment, employees reported working with greater efficiency and energy when their hours were cut. They called in sick 15% less than before and perceived their health to have improved 20%. The program increased costs by 22%, mostly to pay for new employees. But 10% was offset by reduced costs to the state from people being taken off the unemployment rolls and paying taxes into the system.

Classroom discussion questions:

  1. Do your students believe “we should work to live, or live to work?”
  2. What are some companies in the U.S. doing to improve working conditions?

OM in the News: Johns Hopkins’ Capacity Command Center

January 12, 2017
Johns Hopkins Hospital’s state-of-the-art, advanced hospital control center

Johns Hopkins Hospital’s state-of-the-art, advanced hospital control center

Johns Hopkins Hospital, reports Analytics Magazine (Jan.-Feb., 2017), recently launched an advanced control center to better manage patient safety, experience, volume, and the movement of patients in and out of the hospital. The Capacity Command Center incorporates systems engineering principles, which are commonly seen in aerospace, aviation and power industries, but are rare in hospitals.

In the one room center, 24 staff members work together, equipped with real-time and predictive information, and empowered to take action to prevent or resolve bottlenecks, reduce patient wait time, coordinate services, and reduce risk. The command center also houses a sophisticated system with a wall of computer monitors that provides situational awareness and triggers the center team to take immediate action. During a typical afternoon, the system receives about 500 messages/minute from 14 different hospital IT systems generating real-time data. “In the past, like most hospitals, we were dependent on traditional technology – phones, email and IT systems – to manage the hospital, assign beds, etc.,” says a hospital exec.

The technology in the command center keeps staff members informed 24/7 about when there is an influx of patients coming into the hospital, which hospital units need additional staff members, the status of how many patients are being treated, the need for and availability of beds across the hospital, the highest-priority admissions and discharges, and other essential information.

Early results demonstrate improved patient experience and operational outcomes such as: (1) 60% improvement in the ability to accept patients with complex medical conditions from other hospitals; (2) critical care team is now dispatched 63 minutes sooner to pick up patients arriving in ambulances from other hospitals; (3) patients are assigned a bed 30% faster from the ER; (4) transfer delays from the OR after a procedure have been reduced by 70%; and (5) 21% more patients are now discharged before noon.

Classroom discussion questions:

  1. Why have hospitals been slow to adopt these process control procedures used in other industries?
  2. What hospital functions could benefit from the command center concept?

MyOMLab: Updates to LMS Integrations and My Courses Portal

January 10, 2017

LMS INTEGRATION UPDATES: Our Learning Management System (LMS) integration services give you easy access to the MyOMLab from your existing LMS. Access to change weight and other grade sync settings are now more easily accessible for instructors using third-party LMS integrated courses. On the Gradebook Landing Page toolbar, third-party LMS Integration courses will see “Change Weights & Grade Sync Settings” rather than “Change Weights” as in standard MyOMLab courses. This menu option will allow instructors to select grade sync settings for both overall scores and specific assignment scores.

mylab-update-2Updates have been made to steer instructors quickly to the correct course with a more streamlined process for copied courses and coordinator/member courses.

  • The My Courses Homepage provides a better user experience for instructors. The clickable area to access a course has been expanded, the interface streamlined, and  the course ID is now able to be copied from Title and Course views.
  • Accessing and managing Coordinator and Member courses is now even easier. Instructors with Coordinator and Member courses can now directly access their Coordinator Courses on the Portal Homepage by clicking on the course title for the course. To access Member courses associated with a Coordinator course, instructors can click on the Active Member section links.
  • The copy a course process has been streamlined to better delineate Instructor Courses from Coordinator Courses. Additional informational text has been added to differentiate course characteristics between Instructor Courses and Member Courses.


OM in the News: How Samsung Survived the $5 Billion Galaxy Smartphone Recall

January 8, 2017

samsungSamsung’s recall of overheating Galaxy Note 7 phones attracted global scrutiny and hurt its brand image. But even with the $5 billion October disaster, Samsung’s 4th-quarter earnings were the highest in 3 years. “The reason,” writes The Wall Street Journal (Jan. 7-8, 2017): “competitors’ growing demand for Samsung components, a reminder of the company’s central role in the global technology supply chain.

While Samsung’s smartphone results took a hit, the company thrived on sales to Apple, Dell, HP, and Sony, whose smartphones, laptops and TVs rely on parts Samsung manufactures. As recently as 2014, Samsung’s phones were the cash cow. But with consumers no longer snapping up new phones every year, the company—which is the world’s biggest maker by shipments of both smartphones and memory chips—has shown there is plenty of profit to be made in the parts of devices not visible to most consumers.

Even when smartphones were selling strong, Samsung poured tens of billions of dollars into semiconductors and display panels to enable phones to run faster, hold more storage and offer crisper images. Recent advances have made its components more powerful than those of competitors—positioning Samsung as an essential parts supplier for many of its rivals. This friend-and-foe dynamic means Samsung can profit even when a consumer ditches a Galaxy phone for a competitor’s product.

As its reliance on smartphones has diminished, Samsung has looked to build on its dominance in electronic components by expanding its capacity as a chip and display-panel manufacturer. It is investing over $1 billion in its Austin, Texas, semiconductor factory to beef up production of processor chips for smartphones, and $10 billion to expand its production of organic light-emitting diode displays that are thinner than traditional liquid-crystal displays.

Classroom discussion questions:

1.What is Samsung’s core competence?

2.Compare this industry to supply chains for auto makers.


OM in the News: China’s Secret Incentives to Land iPhone Manufacturing

January 5, 2017
The Chinese government is also spending over $10 billion to build an airport just a few miles from the iPhone factory.

The Chinese government is also spending $10 billion to build an airport near the iPhone factory 

The New York Times (Dec. 29, 2016) investigative reporting into confidential Chinese government records, showing billions in hidden perks to attract Apple manufacturing, is a timely reminder of the importance of location incentives (see Ch. 8).

The following package of sweeteners is central to the production of 500,000 iPhones a day in Zhengzhou : (1) Built/financed construction of the huge manufacturing complex at a cost of $600 million; (2) Spent $1 billion to build housing for hundreds of thousands of workers; (3) Provided a discount that reduces the cost of power by 5% annually; (4) Built infrastructure, including power generators and a 24-km pipeline; (5)  Eliminated corporate and VAT taxes for 5 years, then halved the rate for the next 5 years; (6) Granted a $250 million loan; (7) Helped recruit/train workers, and paid subsidies for new hires; (8) Lowered the amount of social insurance by $100 million a year; (9) Offered bonuses tied to the growth of exports; and (10) Paid out a subsidy to help defray the cost of shipping goods.

American officials have long decried China’s support of its state-owned companies, calling the subsidies an unfair competitive advantage in a global marketplace. But the Zhengzhou operation shows the extent of China’s effort to entice overseas multinationals to set up production facilities in the country.

Apple, like many multinationals, depends on a vast global supply chain that includes multiple companies and countries, each with its own expertise and advantages — a complexity often lost in the political debate over trade. The iPhone is a collection of intricate parts that are made around the world and assembled in China, spurring employment in many countries, including 2 million jobs in the U.S.

Classroom discussion questions:

  1. What incentives were recently offered Carrier to stay in Indiana?
  2. Would the U.S. offer packages similar to China’s to attract manufacturers?

MyOMLab: Instructor Gradebook Updates

January 3, 2017

myomlabWe are pleased to announce that, over the winter break the MyOMLab Gradebook has improved navigation among frequently-used Gradebook features, making student performance insights more readily-accessible and providing even more flexibility in grading and assignment settings.

 The Landing Page: This has moved offline items to the main toolbar(1) and now offers a direct link to the Reporting Dashboard, improving the visibility of advanced reporting capabilities.(2) The landing page also includes a performance graph(1) that highlights student and class performance. A new dynamic search box(2) allows instructors to easily find a specific student’s results. The new landing page enables instructors to quickly see class performance by grade categories. The landing page also includes the most recent student login information(3).mylab-update-1

Contacting Students with Specific Criteria:  Searching for and emailing students based on specific criteria has been streamlined with “Email Selected” and “Export Selected” buttons now on the search results page. Search results can also be accessed from the Gradebook landing page by clicking the bar in the chart that represents the score range of interest–e.g., 40-50%.

Filtering of Change Weights: The change weights page includes new filtering functionality by assignments and chapters makes selecting individual assignments or chapters easier.

Add/Edit Student ID: The menu item for Add/Edit Student ID was removed from the toolbar header and added as an option in the “More Tools” dropdown menu. Also, the new Edit Roster menu has been updated to present Add/Edit and Upload Student IDs.

OM in the News: How the iPhone Got Outsourced to China

December 31, 2016
A crushing work force begins arriving for the Apple early shift at 6:30 a.m., crossing paths with those leaving the late shift

A crushing Foxconn work force begins arriving for the Apple early shift at 6:30 a.m., crossing paths with those leaving the late shift in Zhengzhou.

Apple was late to China”, writes The New York Times (Dec. 29, 2016). In a bid to lower costs, some of the biggest American technology companies, including Compaq, Dell and H-P, began dismantling their domestic manufacturing in the 1980s and moving work overseas, largely to Asia. Not Apple.  Steven Jobs believed that software and hardware development had to be closely integrated.

Rather than close plants, Apple decided to build them — in Colorado, Texas and California. The plants were highly automated, with the walls painted white, just as Jobs liked them, and they were promoted as a symbol of American ingenuity. “This is a machine that is made in America,” Mr. Jobs trumpeted in 1984, after Apple opened a manufacturing facility in California to produce the Macintosh PC.

But by the mid-1990s, Apple began to embrace outsourcing under its new operations chief, Tim Cook (now CEO). Under Cook’s direction, Apple shifted business to Foxconn, then an up-and-coming Taiwanese contract manufacturer that had started to gain a following among big American PC brands. The partnership freed up Apple to focus on its strengths — design and marketing. Apple would come up with a new idea, and Foxconn would find ways to produce millions of units at a low cost.

“They have brilliant tooling engineers, and they were willing to invest a lot to keep pace with Apple’s growth,” said a former Apple executive. When Apple’s sales took off after the introduction of the iPod in 2001, Foxconn had the heft and expertise to meet the demand that accompanied each hit product. Foxconn’s factories could quickly produce prototypes, increase production and, during peak periods hire hundreds of thousands of workers. Now, some 350,000 workers assemble, test and package iPhones in the 2.2 square mile site— 350 a minute, 500,000 a day.

Classroom discussion questions:

  1. Everyone is talking about regaining manufacturing jobs. Can Apple reshore its manufacturing?

      2. What is Apple’s core competency? Foxconn’s?

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