How do you convince the auto industry to accept and sup- port the need to develop and build a super-efficient sport utility vehicle (SUV)? At first glance, this would be a no- brainer. Everyone wants an SUV that is fuel efficient. All that is needed is a quarter of a billion dollars to get this thing out of the lab and into the hands of the users. That is the challenge facing Amory Lovins, the developer and champion of the Hypercar and the CEO of Hypercar, Inc., a car company with a plan to build this new car—a car that he is convinced will revolutionize the auto industry. It is also a challenge that is currently frustrating Lovins. At first glance, you would not think that Lovins would have a problem raising such funding. After all, he has the “right” credentials. He has a degree from Oxford University, a MacArthur foundation “genius” grant, and a worldwide reputation as one of the premier environmental consultants. He has written or co-written 27 books and co-founded an environmental think tank that has successfully spun off several for-profit businesses. He has the right stuff to bring this revolutionary product to market—and revolutionary it is! To begin with, the Hypercar is an earth-friendly SUV that gets the equivalent of 99 miles per gallon of gas and emits nothing but drinkable water. It is powered by a fuel cell that converts hydrogen into electricity. The body is made from lightweight carbon fiber—the kind used in fighter planes, tennis rackets, and skis (to help industry, Lovins’s group has even developed a method for converting carbon fibers into sheets of material ready to be used in making the Hypercar). Even the process of driving the Hypercar is revolutionary. The steering wheel has been replaced by two joy sticks; a sophisticated brain links and coordinates all activities—controlling everything from maintenance to entertainment. The car windows are insulated, thus reducing the need for air conditioning and heating. Even the tires have been redesigned. Gone are the big, bulky tires. These have been replaced by high tech, high pressure tires designed to increase rolling resistance and increase fuel efficiency—they can even run flat safely for short distances. Lovins’s company has rethought every aspect of the car and it shows. The challenge is that the very features that make the car revolutionary are also ones that have never been done before. To make this car a commercial success, all that is needed is money—and that is something that has not been coming from industry. Some corporate funding has been obtained. For example, BP Amoco PLC has invested about $500,000 in the Hypercar in the hopes that this project will encourage the auto industry to build cleaner products. Terra Trust, an environmentally focused Swiss investment fund, has pledged to invest $1.5 million of the $5 million that Hypercar has currently raised (unfortunately, Terra has only come up with $100,000 to date). While many executives, especially those with deep corporate pockets, are impressed with what Lovins has done, they are still hesitant to support the Hypercar. Why does Hypercar need a quarter of a billion dollars? There are several reasons. First, the funds are needed to build about 20 Hypercars so it can be determined that the car really works. In addition, full scale production will cost around $140 million. Then there is the money needed to encourage suppliers to participate in this endeavor. After all, nearly everything that the Hypercar needs would have to be provided by suppliers—from the carbon fiber doors to the new engine plant to the dual joystick steering system to the computer control system. Then there are the costs of establishing the fueling system. After all, a system for refueling the Hypercar with hydrogen will have to be set up. Hypercar, Inc., has focused on the challenges of bringing such a product to the market. However, it has not even considered post-production issues such as insuring, servicing, and repairing (i.e., dealing with body repairs). These considerations are part of the reason that Hyper- car, Inc., has decided to target truck fleet users as potential key customers for this new product. They could help set up the necessary fueling infrastructure, while being drawn to the Hypercar by its very high level of energy efficiency. Recently, the Hypercar team convened for a three-day summit in Basalt. Because of the problems with raising money, some of the young staffers suggested scaling back the company’s do-or-die production goal. It was agreed that the company will start trying to license its technology to other automakers in two years, regardless of whether it is ever able to build a fleet of Hypercars. In part, this decision was based on the realization that, if the company is to successfully raise the funds needed, it must offer a short- term way for investors to reap a profit. Required: It is now three years later and you have been approached by Amory Lovins for advice (address your report to him). As you prepare your recommendations, assume that the Hypercar is technically feasible (that is, it can and will work within the next two years). You should also assume that the purchase price for this car would be within $2,000 of a comparable, conventional car.
> This problem uses American Vinyl Products (the case found in Chapter 3). The management at American Vinyl Products has decided that a rigorous and effective approach has to be applied. Consequently, they have decided to apply service blueprinting. For th
> This problem uses Evergreen Products (the case found in Chapter 3). Management is not happy with the current process that is present at Evergreen Products. You have been called into the office of the CEO and given the following task. Beginning with a bla
> Using Evergreen Products (the case found in Chapter 3), carry out the first step in the process of process mapping and analysis, as presented in this supplement, for the two different key customers: • Florists • Grocery stores 1. What differences did you
> Suppose that you are the owner of pizzeria that is located near to a university or college. How could you use the concepts of Order Winners, Order Qualifiers, and Order Losers to help develop and implement an attractive business model?
> Murphy’s Bagel Shops (MBS) is a chain of bagel eateries supported by a central bakery. Most raw materials are delivered to MBS’s bakery where the ingredients are inspected for quality and then stored in the raw materials warehouse, which is located on th
> Your eyeglass frame-making firm is considering one of two distribution alternatives. The first is to make all shipments from your Chicago plant to one of three regional warehouses located in Philadelphia, Chicago, and Reno. All orders from eyeglass retai
> You are making your weekly trip to your local grocery story. Use a process flow diagram chart to describe your decision-making process about what to buy and where to buy it. What inputs did you use in helping you make these weekly decisions? How could an
> Best Bicycles manufactures three different types of bikes: the Tiny Tike, the Adult Aero, and the Mountain Monger. Given the information in the table, calculate the required capacity for this year’s production. Note that the times are g
> Penny’s Pies is a small specialty supplier to a national coffee-house chain. Penny’s makes three types of pies (apple, cherry, and pecan). Penny’s operates 250 days per year with a single eight-hour s
> Electronics Assembly Inc. is a contract manufacturer that assembles consumer electronics for a number of companies. Currently, the operations manager is assessing the capacity requirements as input into a bid for a job to assemble cell phones for a major
> You are given the following information. Which of the statements below can you sup-port with this information? Maximum capacity (labor hours): 480 hours per week Effective capacity ratio: 85% Actual time worked: 380 hours per week over the last two week
> With the process information provided in the preceding table, when the sequence of flow is A→B (any machine can be used if available) → C → D (any machine can be used if available), calculate the over
> You are the manager of Spartan Care—a local Redi-Care facility. While this facility serves a range of clients, everyone agrees that quick service is very important (defined as the difference from the time that clients arrive and are registered at the fro
> Something seems to be wrong in your department. You have been given the following data: • Design capacity: 1,060 hours • Effective capacity ratio: 85% • Demonstrated (actual) capacity: 839 hours • On-time delivery percentage: 75 percent of the jobs are b
> Fit is critical to the development and maintenance of a successful operations strategy. Suppose that we are faced with a firm in which there is a lack of fit between the outcomes desired by the critical customer, the value proposition, and the firm’s cap
> You have been approached by one of the staff who works testing equipment that passes through your facility. Every day, you receive computers from the university that have been repaired but now need to be tested to ensure that they can work under high str
> You have been asked to determine the average wait time for a process that has caused problems for the management of your company. From data you collected over a two-week period (which you feel are representative), you have determined the following: Avera
> This should be a simple issue. You know that our average weekly sales are $2,000 and the flow time is one day. Surely with this information, you should have no problem maintaining an inventory level of $200 to serve the sales.” With these words, the dire
> Metal Hoses Inc. (MHI) is a major manufacturer of metal braided hoses for industry. These products are used in everything from cars to tanks to motorcycles. MHI’s products can even be found on the Space Shuttle. At first glance, it may seem that MHI’s pr
> Cooper’s Copy Shop is considering two different processes for completing copying jobs brought in by customers. Process A uses one person to set up the job and do the copying. If this approach is used, an experienced person can complete an average of 20 j
> Mike operates a hair-cutting salon that specializes in providing quick walk-in service for just about any type of haircut. He deals with customers as they walk in the door. This includes writing down the customer’s name and what they desire in terms of h
> Pizza Time Restaurants is building a new pizza place and needs to determine how big to make the various parts of its facility. It wants to be able to accommodate a maximum of 500 customers per hour at its peak times. Pizza Time has collected the followin
> New Time Videos (NTV) is a new online video rental service. In the field, it is trying to compete by offering its customers access to all of the major new video releases in one business day. That is, if you order a video from NTV, you can expect it in on
> Spartan Redi-Care is a small urgent care facility located near the university. Because of the high competition for student business, the manager of Spartan has decided that the most effective way of competing is to emphasize short wait times. Spartan Red
> Given the following cost information for Company XYZ, calculate: a. Total appraisal cost b. Total prevention cost c. Total cost of internal failures d. Total cost of external failures e. Total cost of quality Cost item………………………………………………………………………………….. To
> Core competencies are critical issues in operations management. Are there any instances in which a firm’s core capabilities can be a liability rather than an asset?
> Suppose that the Dallas School District wants to achieve Six Sigma quality levels of performance in delivering students to school. It has established a 20-minute window as an acceptable range within which buses carrying students should arrive at school.
> Six Sigma quality (3.4 defects per million units produced) is probably a bit much to ask of Rachel’s old oven (see problem 2). a. What would the standard deviation in the temperature of her oven need to be if she settled for a “Three Sigma” level of qual
> Rachel loves to bake cookies, but she has an old oven that has trouble maintaining a constant temperature. If the acceptable temperature range for making the cookies is 350 plus or minus 5 degrees, what is the allowable standard deviation in the temperat
> I visited my old pal Dinsmore recently. He had called to let me know that he had taken over as general manager of the Flagship hotel about six months ago, and he thought that I might be interested in seeing a real hotel from the inside. He also indicated
> Roberta Brown sat at her desk and looked through the preliminary slide deck she had prepared. This presentation had to be good. In two weeks she would be giving the presentation to the top management team of Aqua-Fun. The goal: to secure their commitment
> Things were not going well at Bully Boy Products (BBP). BBP was a regional producer of organic fertilizer, potting soil, growing loam, and various gardening products for the discriminating gardener. It had been founded in 1976 when two agriculture studen
> Late on the evening of Sunday, April 14, 1912, RMS Titanic, while on her maiden voyage, struck an iceberg about two days from New York City. Within three hours, she was gone (Monday, April 15, 1912). On this voyage, there were 2,201 passengers and crew m
> Pick a product good or service that you are interested in consuming sometime in the near future. Analyze the offerings of two competing firms. How do the products compare on various dimensions of quality? From these differences, what can you infer about
> The chapter noted that digital technologies are giving firms and their consumers increased visibility into the supply chain and its activities. Would this visibility be important to you? Why? Would you be willing to change your shopping habits in respons
> It has been said that quality management is really a “people” system, more than a technical system. If this is true, what conditions must first be in place for a firm to be successful with quality management? What are the possible repercussions for the f
> A critical concept introduced in this chapter was that of the value proposition. Explore two competing products (e.g., RIM’s Blackberry and Apple’s IPhone). Identify the underlying value propositions present in these products and how this proposition is
> You have been appointed head of quality control for your organization (a firm you have worked at or your college). During the first month, you interview disciples of Deming, Juran, and Crosby. Each seems to be equally affable and competent. Which consult
> Employee empowerment is an essential element of quality management, especially in services. From your own experience, cite instances where a service provider empowered its employee to go the extra mile to delight you. Then indicate an instance where the
> When does it make economical sense to crash project activities? How do you know when to stop?
> What project factors would make you more or less comfortable with a lower probability that the project will be completed on time?
> Suppose that your project has two activity paths of about the same length, but one path is made up of more uncertain activities while the other path is fairly routine. How would you manage the activities on these two paths differently?
> Why does it never make sense to crash activities that are not on the critical path?
> Trail Frames Chassis (TFC) of Elkhart, Indiana, is a major manufacturer of chassis for the motor home and van markets. Since it was founded in 1976 by two unemployed truck-manufacturing engineers, TFC has grown into one of the major suppliers in this mar
> Cemex is one of the world’s largest providers of building materials, mainly concrete and cement (www.cemex.com) for the building of sports complexes, skyscrapers, and high-scale infra-structure (e.g., roads, bridges). The company is over 100 years old an
> Dave Eisenhart, senior editor for Mountain Publishing, Inc., looked out his window as he considered the operational implications of the changes he had just heard discussed in the company’s annual strategic planning meeting. The future looked to be both e
> As his plane landed at Port Columbus International Air- port, Adam Warren, Chief Supply Chain Officer for Sup- ply Chain Operations and Services, (SCOS), switched his phone out of airplane mode and waited for cellular service to resume and the messages h
> When can a consumer be a critical consumer? In other words, when does it make sense to focus on consumers such as retail stores, distributors, or buyers, rather than on the end consumer?
> Select two products that you have recently purchased; one should be a service and the other a manufactured good. Think about the process that you used to make the decision to purchase each item. What product characteristics were most important to you? Wh
> Lucy, I thought that you told me and the planning committee that this move to recycle storage plastics was going to save us money. But, look here. I just got the bill for last month’s disposal of our plastic. We wound up paying $3,000, rather than being
> Welcome everyone. Robert, please turn on the television.” Vice President of Global Procurement, Stefan Schrettle, started the meeting with these words. The components sourcing and procurement team had been hurriedly assembled at Schrettle’s request. Robe
> The summit meeting at Monolith Productions started promptly on August 20 at 10:45 a.m. The president of the company, Hugo Monolith III, called the meeting of his vice presidents to order. “Ladies and gentlemen, thank you for meeting here on such short no
> Derek had a busy summer ahead of him. It was February 1, and Derek was planning out a summer full of activities that included a backpacking tour of Europe, doing some work for his father, and completing an online summer course offered by his university.
> The Casual Furniture Company (CFC) makes a variety of bookshelves for homes and businesses. The shelves come in various heights, widths, materials, and finishes. Effective requirements planning is essential for CFC’s performance, and it
> Adam Rodriguez, the vice president of supply chain management for QP Industries, sat in his office, contemplating what he had to tell the executive leadership team at tomorrow’s meeting. During the last two years, lead times for transmitting orders betwe
> The following case is based on one of the coauthor’s experiences with an actual company and its management. Fiona Richey knew that she had been given the opportunity of a lifetime. She had just been hired to be an internal troubleshooter and consultant b
> Bill Smith, director of business planning for C&F Apparel, chewed on a pencil as he looked out the window of his fourth-story office. These bad forecasts are killing us, he thought. Forecast errors for the fall season’s sales had ranged from 50 to 200 pe
> Rachel Kirkpatrick thought to herself, “What a waste,” as she threw away three bags full of unsold items and spoiled ingredients. “I have to get better at estimating how much food to order and prepare
> How would you define capabilities within a school or business?
> Lear Corporation, headquartered in Southfield, Michigan, is one of the world’s 10 largest independent automotive suppliers and the leading player in the $45 billion global auto interiors market. This market consists of such items as seating systems, inte
> Elise Lovejoy, the new logistics coordinator at Spartan Plastics, was looking at the stack of papers and the two computer screens in front of her. It was Friday afternoon— the Friday before the long weekend—and she sti
> The five-year dining services contract at Midwest University, a residential campus with 20,000 students located in Ohio, is expiring in three months. The supplier must be able to perform all aspects of dining services operations including menu planning,
> Trail Frames Chassis (TFC) of Elkhart, Indiana, is a major manufacturer of chassis for the motor home and van markets. Two unemployed truck-manufacturing engineers founded TFC in 1976. Since then, the company has grown into one of the largest suppliers o
> Karen Williams, the new director of supply management at Best Banks, was excited to be working at her new job. After gaining over 10 years of experience in various supply management positions at a first-tier automotive supplier, she was looking forward t
> Harry Chamberlain, vice president of Tiler Industries, closed the phone call by saying, “Well thanks, Jim. We appreciate the call even though it was bad news. We’re sorry we didn’t get the contract for the SRW installation from Phoenix, but we understand
> It was a tough year for Western Telephone Manufacturing (WTM) of Canton, Michigan. Until this year, WTM had been the darling of Wall Street. This company had become one of the first to wholly embrace the concepts of Six Sigma and Total Quality Management
> Jane Polski, the newly hired director of university purchasing, took one final look at the report from her purchasing manager, removed her glasses, and rubbed the bridge of her nose. Surely, she thought, things could not be that bad. According to the rep
> Good Guy Hospital Supply (GGHS) was founded in the 1960s to serve the hospital and nursing home industry. Since then, its sales have grown an average of 26 percent per year, through both geographical expansion and increased existing-market penetration. K
> Dexter pored over the table of data he had compiled using inputs from purchasing, internal inventory managers, accounting, and Disco (Dexter’s Chicken’s purchasing co-op and sole distributor). He hoped that he had enough information to make a well-founde
> Apply the corporate/SBU/functional planning hierarchy introduced in this chapter to your university/college or business. What would be the equivalent to corporate planning? SBU planning? Functional Planning?
> Tasty Treats is a distributor of candy and snack products serving customers in a six-state region of the Midwest ern United States. Bill Jones, chief operations officer, has been concerned about inventory levels and inventory performance at Tasty Treats
> Champion Electric, a regional supplier of electrical and electronic components, keeps thousands of SKUs (stock keeping units) of various products on hand for its customers. A new operations manager, Barb Patterson, has just been hired to replace Bob, who
> As he stopped to refill his coffee mug, Roger Terry began to recall some of the comments he had heard from various members of the single-block product development team (see the comments reproduced below). The following comments were gathered from informa
> The ALPHA single-block timer development project had not gone exactly as planned. The product development time-to-market was 48 months instead of the planned 30 months, and capital expenditures for the project were at least 30 percent over budget. On the
> Roger Terry hurried down the hallway toward the planning meeting for the ALPHA timer product development project. Terry had served as project manager for the initial stage of the ALPHA single-block product development, and he was now preparing to start t
> I can’t see why you have to spend so much time looking at our processes. Hey, we have everything under control. It has been over five years since we got our last EPA inspection and nearly six years since we got our last major citation a
> To: Brad Hadley, President, American Vinyl Products (AVP) From: Bev Trudeau, Director of Purchasing, American Performance Car, CA Subject: Customer Service at American Vinyl Products Our two companies have basically had a good relationship ov
> You are the purchasing director for Midas Gold Juice Company, a small Midwestern fruit-juice company that produces a line of premium, limited-run fruit juice (Slogan: Midas Juice—you’ll be touched by the Gold). As one of your responsibilities, you review
> The top managers of Evergreen Products of East Lansing, MI, have asked you to act as a consultant on a problem plaguing the entire company. Evergreen Products manufactures decorated containers and care tags for a market consisting primarily of small- to
> Steinway pianos have long been the premier brand among serious pianists. Franz Liszt called his Steinway “a glorious masterpiece.” Gioacchino Rossini, a 19th-century com-poser, described the Steinway sound as “great as thunder, sweet as the fluting of a
> Why should the firm never outsource its core capabilities? What happens if the firm is approached by a supplier who is willing to supply goods and services based on these core capabilities at a significantly lower price? What should the firm do?
> Otis Toy Trains of Minneapolis, Minnesota, was a land-mark company in the toy business. Since the 1900s, it had been responsible for building electrical and steam-driven toy trains. Since the 1950s, Otis trains had developed a major presence on children’
> It was late on Friday, and Lisa Jacobs, the CEO of Lil’ Me Dolls, re-read the document before her. It was a proposal from the MOT (Millions of Toys) retail toy chain offering to carry the Lil’ Me line of dolls. At first glance, this seemed to be too good
> The American South and the American Midwest experience natural disasters on a regular basis (hurricanes such Hurricane Katrina in the American South and tornados in the American Midwest). Whenever such a disaster takes place, organizations such as the Am
> One common approach that companies use to protect human rights is a supplier code of conduct. How can you increase the effectiveness of a code of conduct?
> The Triple Bottom Line can be viewed as a three-legged stool in that each element must be present or, if one or more elements are removed, then the entire structure collapses. To what extent do you agree with this approach? Why is it important that each
> Why is it that some managers are not willing to pursue more aggressively environmental sustainability even when presented with compelling reasons for its need? (HINT: think about issues such level of resources available, risk of failure, and how the mana
> What are some operations/supply chain management strategies that can be used to deal with the challenges of diminishing natural resources?
> In a recent study by MIT, it was found that the Toyota Prius, a hybrid, was less environmentally responsible than a Hummer SUV. How could this be? You might want consider using the AT&T Environmental Assessment Matrix in addressing this question.
> What would the business model look like if we were to compete primarily on environmental sustainability?
> Why does the concept of “cradle to grave” no longer make business and environmental sense?
> Using a SWOT analysis, can the operations management system be a strength? Can the operations management system be a weakness? Provide examples.
> Have you ever stayed at an Air BnB? If so, why? To what extent was your decision influenced by the price, the location, or the experience that the Air BnB offered?
> Have you ever used social media to decide what products to buy or even where to go for a vacation? Provide some examples. Have negative reviews on social media ever caused you to avoid buying a certain product? Why?
> How could the Internet of Things affect such activities as you visiting a store to buy a product?
> Recently, companies such as Verizon, Automatic, and Zubie have introduced a module that plugs into the diagnostic port of most cars. This module keeps track of the status of the car and informs the user of any problems (explaining the problems in plain E
> Review the new strategic direction for Unilever, as presented at the beginning of this chapter. What are the economic rationales for these seven key strategic imperatives? What are the risks? To what extent are these initiatives driven by concerns of env
> What are the differences between a project objective statement, a project charter, and a project business case?
> What strengths do you possess that would make you an excellent project manager? In what areas do you need to improve?
> Suppose that you are the leader of a project aimed to quickly develop and explore radical new business opportunities that exploit the company’s strengths in supply chain management. What types of personnel would you want on your team? How would you organ
