International Operations Management

MGMT 6367

Lecture 06

Instructor: Yan Qin

Fall 2012

Outline

Review for Mid-term Exam

Case study

◦ Case: New Balance

◦ Case: Xbox

◦ Case: Mattel

Review for Mid-term Exam

Additional office hours: ◦ 7:00 pm – 8:00 pm, Oct 11 CST

◦ 7:00 pm – 8:00 pm, Oct 13 CST

Mid-term Exam: 2 hours, open book/slides, in class

Only Multiple-choice questions will be given on the exam. ◦ There will be 30 multiple-choice questions on the exam.

Each is worth 4 points.

Anything that is not listed on the review slides will not be tested.

No case-related questions will be asked on the exam.

What you should know – Week 1

Definitions of Production, Operations, and Operations Management

Four competitive priorities

Definitions of qualifying/winning criteria

What is Logistics

Global Vs. Domestic Operations and Logistics

Differences between goods and services

What you should know – Week 3

Definitions of Outsourcing, Off-shoring, Back-sourcing, and Near-shoring

Why outsourcing

Four types of components classified based on the SIC matrix◦ Outsource/in-house recommendations for each

type of component

What are the 5 typical buyer-supplier relationships◦ Pros and Cons of each type of relationship

Products suitable for global outsourcing

Risks of outsourcing

What you should know – Week 3

Calculation: You should know how to

◦ Use the method of Factor Rating to find the supplier with the highest/lowest overall rating;

◦ Solve for the break-even quantity

◦ Give make-or-buy suggestions based on the relative magnitude of break-even quantity and the expected production quantity

What you should know – Week 4

Definitions of Supply Chain Management

What is Bull-whip effect?◦ Major causes and possible remedies

What is risk?

Four types of risks in a Supply Chain

Possible risk management strategies

Common types of qualitative and quantitative forecasting methods

What you should know – Week 4

Calculation: You should know how to

◦ Compute Inventory Turnover and Weeks of Supply based on the information given.

◦ Compute the significance of a risk event

◦ Use moving average methods and exponential smoothing method to make required forecasts

What you should know – Week 5

Definitions of customer value, value-added activities, non-value-added activities, and waste

Ohno’s seven wastes

Expectations in a Lean Supply Chain

What is Group Technology◦ Benefits offered by the use of Group Technology

Pros and Cons of small transfer batches

Definition of setup time

Differences between internal and external setup steps

What you should know – Week 6

Key in storage design

Common types of storage systems

Inputs to the layout decision for production facilities

Four basic production layouts◦ Description of each layout

◦ Suitable products for each layout

Calculation: You should know how to ◦ Compute the material handling costs for a process

layout. Pay attention to the example given on Process Layout Design;

◦ Compute the required workstation cycle time, the theoretical minimum number of workstations, and efficiency in assembly-line balancing.

Case study

Sample answers to the case-related questions can be found in the PDF document titled “Case Study – Sample Answers” posted on the course website.

Please note that the sample answers may not be 100% correct or the only solutions.

Case Study: New Balance

Please read the case “New Balance Athletic Shoe, Inc.” and think about the following questions:What are the competitive implications of the

Adidas/Reebok transaction for New Balance? You may want to refer to figures in Exhibit 2.

In what aspects did New Balance see itself differentiated from Nike, Adidas, or Reebok?

New Balance placed a disproportionately large emphasis (relative to sales generated) on serving smaller retailers and ensuring timely delivery of products to them. What are the reasons for them to do that?

New Balance – Cont.

New balance performed 25% of its manufacturing in the United states at a time when nearly all of its competitors were manufacturing 100% of their products in Asia. What are the primary reasons for them to maintain domestic manufacturing?

Suppose the total US volume of athletic shoes per year is 400 million pairs. How much is the cost penalty resulted from New Balance’s domestic manufacturing?

Case study: X-Box

Read the case on X-box and think about the following questions:What were the challenges facing Microsoft with

the original Xbox?

What supply chain changes did Microsoft make between Xbox and the Xbox 360? And what’s the motivation?

What are the benefits and risks of the global launch planned for the Xbox 360?

Microsoft planned to use three EMS firms for the Xbox 360, all manufacturing in China. What were the benefits and limitations of the approach?

Case study: and the toy recalls (A)

This case details the events leading up to the recalls at MATTEL in 2007 and highlights the difficulties a multi-national company faces in managing global operations. Please read the case carefully and think about the following questions:What are the characteristics of the toy industry

and how do they affect toy production?

Two quality problems were mentioned in the case: lead paint and small magnets. What were the causes of these problems?

What challenges do toy companies face in managing offshore-outsourcing?

Good luck on the exam!

Just let me know if you have any questions!