Australian School of Business - UNSW Business School [PDF]

MNGT8240 OPERATIONS MANAGEMENT

COURSE OUTLINE SESSION 2, 2012

Commencement Date: 02/05/2012 Class Date: 2-5; 7-10/06/2012 Payment Date: 06/05/2012 Examination Date: 11/07/2012

We would like to provide you with an opportunity to make comments and suggestions on these course materials [email protected]

TABLE OF CONTENTS 1.

Hong Kong MBA Program 2012 Calendar

1

2.

Course Aims / Objectives

2

3. 3.1 3.2 3.3 3.4

Course Details Teaching Times and Location (Cliftons, Level 33, 9 Queens Rd, Central, HK) Bad Weather Policy Units of Credit Course modules

2 2 2 2 3

4. 4.1 4.2 4.3 4.4

Assessment AGSM assessment policy Assessment Details Late Submission Academic Honesty and Plagiarism

7 8 8 10 10

5. 5.1 5.2

Course Resources Prescribed Textbooks eLearning information

10 10 10

6.

Additional Student Resources and Support

11

7.

Course Staff

11

1.

HONG KONG MBA PROGRAM 2012 CALENDAR Course

Lecturer

Core / Elective

Class Sessions

Payment Due Date

Exam Date

Session 1 (January - March) Corporate Finance

Andrew Hingston

C

7-10; 12-15 Jan

6 Jan

22 Feb

Managerial Skills 1 Marketing Principles 2

Wendy Grusin Craig Tapper

E C

7-10; 12-15 Jan 2-5; 16-19 Feb

6 Jan 1 Feb

22 Feb 14 Mar

Product Management 3

Amanda Heyworth

E

4-7; 9-12 Feb

1 Feb

14 Mar

Innovation & Strategy

Hann Kim

E

25-28 Feb; 1-4 Mar

12 Feb

Strategies for Growth 4

Salih Ozdemir

E

17-20; 22-25 Mar

12 Feb

Statistics for Managers 5 Reporting for Climate Change & Sustainability

Paul Walsh Maria Balatbat / Wendy Green

C

14-17; 19-22 Apr 28-30 Apr; 2-6 May

13 Apr

30 May

27 Apr

13 Jun

Managers Markets & Prices

Andrew Hingston

C

19-22; 24-27 May

6 May

27 Jun

no exam; last assessment due 4 Apr no exam; last assessment due 25 Apr

Session 2 (April - June)

E

Strategic Human Resources Management 6

Judith MacCormick

E

19-22; 24-27 May

6 May

no exam; last assessment due 27 Jun

Operations Management

Chung-Li Tseng

E

2-5; 7-10 Jun

6 May

11 Jul

Business Process Management

Paul Walsh

E

16-19; 21-24 Jun

6 May

25 Jul

22 Aug

Session 3 (July - September) Accounting & Financial Management

Kevin Clarke/ Ken Trotman

C

14-17; 19-22 Jul

13 July

Entrepreneurship and Family Business

Pat Mooney

E

28-31 Jul; 2-5 Aug

27 July

Leadership Concepts & Skills 7

Dan Caprar

E

11-14; 16-19 Aug

29 July

International Finance

Fari Moshirian

E

1-4; 6-9 Sep

29 July

10 Oct

Managing People & Organisations

Markus Groth

C

15-18; 20-23 Sep

29 July

31 Oct

no exam; last assessment due 12 Sep no exam; last assessment due 19 Sep

Session 4 (October - December) Marketing Principles 8

Craig Tapper

C

13-16 Oct; 1-4 Nov

12 Oct

28 Nov

Services Marketing

Paul Patterson

E

20-23; 25-28 Oct

19 Oct

28 Nov

Corporate Strategy

Salih Ozdemir

E

10-13; 15-18 Nov

21 Oct

Corporate Finance

Andrew Hingston

C

1-4; 6-9 Dec

21 Oct

no exam; last assessment due 19 Dec 9 Jan 2013

Special Topic: Int’l Business Strategy in Asia

Chung-Sok Suh

E

1-4; 6-9 Dec

21 Oct

9 Jan 2013

1. MS - class cap at maximum of 30 2. MP - classes run in 2 blocks (2-5; 16-19Mar) 3. PM - prerequisite: Marketing Principles 4. SG - prerequisite: Corporate Strategy.

MNGT8240 – Operations Management

5. STAT – students are required to bring their own laptop for this course 6. SHRM – prerequisite: Managing People & Organisations 7. LCS – class cap at maximum of 30 8. MP - classes run in 2 blocks (13-16Oct; 1-4Nov)

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2.

COURSE AIMS / OBJECTIVES At a fundamental level, any business or organisation is concerned with delivering value to its customers. The “operations” of an organisation are the processes that the organisation uses to create value: they involve transforming inputs of resources into outputs in the forms of products or services. Operations Management is the task of managing these processes. Each organisation will have a unique set of operations, whether this is dealing with phone calls at a call centre, manufacturing cardboard from recycled paper, running room service in a hotel or dealing with passengers of an airline. This course covers the fundamentals of operations management by introducing a set of managerial and analytical principles that you can use to understand the operations functions and strategies of an enterprise. Overall, the course aims to 1. Develop knowledge about how processes work in an organisation and how to analyse the processes. 2. Develop knowledge about strategic role that operational functions can play and the analytical skills and capability to execute operational decisions effectively and efficiently. 3. Develop knowledge about interconnectedness of business units and organisations (via the flow of products, money, and information) within a firm‟s supply chain. 4. Enhance communication, reflection and teamwork skills.

3.

COURSE DETAILS

3.1

Teaching Times and Location (Cliftons, Level 33, 9 Queens Rd, Central, HK) # 1

Saturday

Date

Lecture time

Location

nd

2:00pm – 8:00pm

Cliftons, HK

rd

2 June 2012

2

Sunday

3 June 2012

10:00am – 7:00pm

Cliftons, HK

3

Monday

4th June 2012

4

Tuesday

7:00pm – 10:15pm

Cliftons, HK

th

7:00pm – 10:15pm

Cliftons, HK

th

5 June 2012

5

Thursday

7 June 2012

7:00pm – 10:15pm

Cliftons, HK

6

Friday

8th June 2012

7:00pm – 10:15pm

Cliftons, HK

2:00pm – 8:00pm

Cliftons, HK

10:00am – 7:00pm

Cliftons, HK

7 8

3.2

Day

Saturday Sunday

th

9 June 2012 th

10 June 2012

Bad Weather Policy Classes will be cancelled if a No. 8 or higher tropical cyclone warning signal or black storm warning is raised at any time from 3 hours before the start of the class. In the event of cancellation due to bad weather, make up classes may or may not be held depending on room/lecturer availability.

3.3

Units of Credit This course has 6 units of credit.

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Course Outline

3.4

Course modules Day 1: Saturday, 2nd June 2012

(2.00pm – 8.00pm)

Topics:    

Introduction to Operations Management. Operations Strategy. Process Positioning. Process Analysis.

Reading: 1. Read Chapters 1 and 2 of the text. 2. Read the case of Benihana of Tokyo pp.1–3 (in the course pack). Activities/Assessment Due: This is an introductory class in which we look at the nature of operations management. Two key topics we cover are (a) the difference between manufacturing and service operations, and (b) choices on how firms compete (which will drive operations strategy). We will look at the choice of process type: this strategic decision determines the nature of the operations decisions we face. We will look at this issue from a number of different viewpoints: such as the flow strategy implied, the product life cycle, the volume and variety trade-off and the customer involvement implications for service firms. There are significant implications for the layout and structure of a firm's operations - we will explore product and process layouts. After the introduction, we look at the fundamental characteristics of processes and the ways in which they interact. In particular, we will investigate the question of how to effectively manage the capacity of a process, especially for process-focused operations with multiple steps performed in parallel and in series. A key question that we address is the identification of bottlenecks in an operations process and the calculation of overall capacity. Partly as an example of some of the concepts, we will look in detail at how an assembly line works. A mini assignment will be given in this class. After the class, your team should start tackling the case study of Manzana Insurance. The report of this case is due at the beginning of the class on Day 5. See Day 5 for the study questions for the case. Day 2: Sunday, 3rd June 2012

(10.00am – 7.00pm)

Topics:    

Managing inventory. Inventory with uncertain demand. Introduction to a sushi ordering game (to be held on Day 7). Introduction to Littlefield Simulation (to be held on Day 8).

Reading: 1. Read Chapters 7 and 8 of the text. Activities/Assessment Due: In order to prepare you for the simulation game on Day 8, we will not follow the sequence of the chapters in the text. This class discusses the management of

MNGT8240 – Operations Management

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inventory. We will begin by looking at different kinds of inventory (cycle, buffer, anticipation etc). Then we consider how to choose an order size to get the right trade-off between inventory costs and ordering costs. We will then consider how inventory systems can be used when we wish to avoid stockouts in a situation with unpredictable demand. We look at continuous review and periodic review systems. A mini assignment will be given in this class. We will use some time to prepare you for the simulation game on Day 8, including discussing the game scenario and game interface. You will also be given a chance to login the game website to be familiar with the simulation interface. Bring your laptop with Wi-Fi to access internet. Distribution Game was developed by P.L. Jackson and J.A. Muckstadt at Cornell University in 1994. Though quite old, the Distribution Game is a good one to sharpen your understanding of inventory management. The game can be downloaded from Blackboard. It, however, can only be run on Windows XP (not Windows 7). Since the game will be played by teams, make sure that your team has at least one laptop that can run the software. Day 3: Tuesday, 4th June 2012

(7.00pm – 10:15pm)

Topic:  Queues in Service Operations. Reading: 1. Read Chapter 3 of the text. 2. Read “While Customers Wait, Add Value”, Harvard Business Review, JulyAugust, 2001 (in the course pack). Activities/Assessment Due: In this class we look at what causes waiting in queues. Essentially there are two reasons (a) variability and (b) shortage of capacity. We will also introduce a formula that gives information about the queue when arrivals follow a Poisson process. Before coming to the class, think of an example of a queue that occurs in a service operation that you have some familiarity with. What measures could be taken to reduce the queue? A mini assignment will be given in this class. Day 4: Tuesday, 5th June 2012

(7.00pm – 10:15pm)

Topics:  Quality Management.  Statistical Quality Control. Reading: 1. Read Chapters 4 and 5 of the text. Activities/Assessment Due: We will introduce the important ideas of Total Quality Management. The framework we use is called the Joiner triangle and will lead us to consider: (a) the customer aspect of quality: why managers have to be obsessive about it; (b) the people aspect of quality which can only be achieved through the employees that work on the front line, and (c) the process aspect of quality which requires us to look for data on what is actually happening – not what we guess is going on. This will link with the material on Lean Operations that we cover on Day 6. We will look in more detail at the way that variability can occur and how management can deal with it. We will

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Course Outline

give an introduction to the use of control charts both when a variable can be measured, and when we are concerned to track the number of defective or substandard items. A mini assignment will be given in this class. Day 5: Thursday, 7th June 2012

(7.00pm – 10:15pm)

Topics:  Discussion of the case The Fruitvale Branch of Manzana Insurance.  Benihana Simulation. Reading: 1. Read Manzana Insurance Case (in the course pack). 2. Read “Preparing for Benihana Simulation” (in the course pack) and login designated website to review summary information of the Prepare screens. Activities/Assessment Due: We will first discuss the case of the Fruitvale Branch of Manzana Insurance, which is struggling to compete in California‟s rocky insurance industry. Fruitvale‟s manager, John Lombard, must decide how to respond to a local competitor‟s promise of a one-day turnaround time for new policy requests, or face the likelihood of losing additional agents and subsequent business. The case deals with performance assessment and improvement of a service operation process in the insurance industry, a market that is highly sensitive to response time. Study Questions: (1) What are the problems that the Fruitvale Branch is facing? What are the causes of these problems? (2) Analyse current processes used to handle various types of service requests. What is your assessment of the rules used to assign priorities in Fruitvale operations? Can you identify the problems in the way Manzana is calculating turnaround time in Exhibit 3 of the case? (3) If you were Bill Pippen, what would you recommend that Fruitvale do? Note the report of this case is due at the beginning of the class on this day. After the case discussion, we will play web-based Benihana Simulation, developed by Harvard Business Publishing. It is a discrete-event simulation model to help students manage customer waiting time at a Benihana restaurant. Although the model provides five challenges for the students to achieve, we will only tackle the first two challenges in class: batching dining room customers and optimally designing the size of the bar. Before coming to class, students are expected to login the simulation website and go to the Prepare screen where you can review summary information about Benihana and simulation. Bring your laptop with WiFi to access internet. Day 6: Friday, 8th June 2012

(7.00pm – 10:15pm)

Topic:  Lean Operations. Reading: 1. Read Chapter 6 of the text. 2. Read “The Humbling of Toyota”, Business Week, 11 March 2010. (http://www.businessweek.com/magazine/content/10_12/b4171032583967.htm)

MNGT8240 – Operations Management

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Activities/Assessment Due: In this class we will spend most time looking at the interlocking elements in the Lean approach: continuous improvement and elimination of waste; simple material flow and increased operator responsibility; small batch sizes; low inventory; and close supplier relationships. We also look at the way kanban signals can be used for pull production. The lean concept was derived from Toyota Production System. We are also interested in Toyota‟s mass recall in 2010. How could the company with a great reputation in quality and excellence slip up on such a scale? What went wrong? The Business Week article suggests some possible causes. But there may be others. You are encouraged to do some research and to bring your thoughts to the class for discussion. Day 7: Saturday, 9th June 2012

(2.00pm – 8:00pm)

Topics:  Case discussion of Virginia Mason Medical Centre.  Play a sushi ordering game.  Supply Chain Management. Reading: 1. Read Virginia Mason Case (in the course pack). 2. Read Chapter 9 of the text. 3. Read “Zara Thrives by Breaking All the Rules” Business Week, Oct 2008 (http://www.businessweek.com/magazine/content/08_42/b4104066866245.htm) 4. Read “Benetton: A Must-Have Becomes a Has-Been” Business Week, Mar 2011. (http://www.businessweek.com/magazine/content/11_12/b4220021488483.htm) Activities/Assessment Due: We will first discuss the case of Virginia Mason, which describes how Virginia Mason Medical Centre in Seattle, Washington, adopted the Toyota Production System (the lean operations) and implemented it into health care services. The outcome was significant improvement in cost saving and service quality. Study Questions: (1) What was the environment faced by Kaplan when he took over? (That is, issues specific to VMMC and issues related to the overall health care environment) (2) What did Kaplan do about it? (3) Compare TPS (Toyota Production System or lean) and TQM. Why was TQM not very successful in health care? What is the main difference between TQM and TPS? (4) Identify lean practices at TPS (i.e., give examples of tools used). (5) How was lean implemented at VMMC? That is, which were the necessary steps/tactics to implement lean at VMMC? (6) What is the physician compact and how does it relate to lean at VMMC? (7) What kinds of processes in a hospital are better suited to lean implementation? (8) Can lean be applied to other hospitals in the US? What were the unique characteristics of VMMC that made it so successful there? Next we play a sushi ordering game. Your team should be equipped with your own algorithm and Excel spreadsheet to compete in the game. Be sure to bring your own laptop.

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Course Outline

For the rest of the class, we introduce some key ideas about supply chains. First we look at mapping the supply chain. We consider the way that supply chain partners interact. We discuss the coordination of supply chains to achieve the best result for the supply chain as a whole. We discuss the problem of double marginalisation and the way that revenue sharing contracts can mitigate this. A mini assignment will be given in this class. Day 8: Sunday, 10th June 2012

(10:00am – 7:00pm)

Topics:  Littlefield Simulation.  Project Management. Reading: 1. Read Chapters 10 and 11. Activities/Assessment Due: In the morning, each team will be assigned a room to play the simulation game. Over the course of 120 minutes, you will be running the operations of Littlefield Technologies and try to maximise the profit. After the game, we will look at the performance of all teams and discuss your findings. Bring your laptop with Wi-Fi to access internet. Note a report of your post-game reflections is due at the end of 17/06/12 (see 4.2.1 for more information). In the afternoon we will discuss project management issues, including project scheduling and resource allocation. A mini assignment will be given in this class.

4.

ASSESSMENT In order to pass this course, you must:  achieve a composite mark of at least 50; and  make a satisfactory attempt at all assessment tasks. Assessment percentages: Six mini assignments (team) One case report (team) Class participation (individual) Littlefield game outcome (team) Littlefield game reflection (team) Final exam (individual)

15% 15% 10% 7.5% 7.5% 45%

TOTAL

100%

With the assessment tasks above, by the end of this course the students should be able to achieve the following learning outcomes: 1. Understand key characteristics and management principles of different types of production and service operations systems. 2. Develop basic competence in analytical skills which will enable a business manager to make strategically sound operations decisions. 3. Understand fundamental issues of selecting and designing efficient processes for various type of products and services.

MNGT8240 – Operations Management

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4. Understand how to achieve high quality operations and know how to apply lean operations concepts. 5. Develop basic skills in analysing inventory issues. Recognise the role of inventory in supply chain operations. 6. Recognise the strategic importance of supply chain management in a global economic environment. 7. Interact with team members to achieve team objectives. 4.1

AGSM assessment policy A completed assessment cover sheet must be attached to the front of each submitted assessment. Blank assessment cover sheets for your use are included in the Appendix at the end of this course overview.

4.2

Assessment Details Your performance in this course will depend on how well you do in the exams, exercises and assignments as well as on how effectively you participate in class sessions. Learning Outcomes Assessed

Assessment Task

Weighting

Mini Assignments

15%

1,2,3,5,6,7

Case report

15%

1,2,3

Littlefield Game outcome

7.5%

1,2,3,5,7

Littlefield Game reflection

7.5%

1,2,3,5

Final Exam

45%

1,2,3,4,5,6

Max Length

Due Date

-

See 4.2.1

10 pages

7/06/12

-

10/06/12

5 pages

17/06/12

-

11/07/12

4.2.1 Brief description of task Mini assignments (15%) Since this course introduces quantitative analysis for most topics covered, there will be a mini (team) assignment given in each class (except on Days 5 and 6). The purpose is to ensure you to understand the material and know how to apply it with the help of group discussions. The weight for each assignment varies, depending on the number of questions. Overall, mini assignments are worth 15% of the final grade. There will be time reserved in the class for you to work on each assignment. One case report (15%) For the case of Manzana Insurance, your team is required to deliver a case report. The case deals with performance assessment and improvement of a service operation process in the insurance industry, a market that is highly sensitive to response time. The report should be typed and be no more than 10 pages in length excluding attachments. Your case report should not simply provide answers to the case questions, but rather use these questions to guide our analysis. The following is a guideline for a well-structured case report.  Description of the main problems/major issues in the case  Analysis of the problems to identify root causes.  Recommendation with supporting arguments. The case report is worth 15% and will be graded based on the depth of the analysis on the case as well as the style and clarity of the writing.

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Course Outline

Once the subject of process analysis is covered on Day 1, you should start working on this case. The case report is due at the beginning of the class on Day 5. No class time will be reserved for you to discuss or work on the case before the due day. Class participation (10%) You are required to attend all classes, and seek permission ahead of time if you have to miss a class. Absences without excuse will adversely impact your class grade. In addition, since some classes involve case discussions, you are expected to read the designated reading materials and cases before coming to each class. In the classes that will be primarily case based, you will be graded according to the following:  0 points (absent or not prepared).  1 points (little contribution).  2 points (good contribution).  3 points (major contribution). Littlefield simulation game performance (15%) Littlefield is an award-winning, web-based simulation game developed by Stanford University. The game simulates the day-to-day operations of Littlefield Technologies, a company that produces digital satellite system receivers. The game is tackled by teams. Your team will be responsible for making purchasing, inventory, and pricing decisions to maximise process output and sales profit. This game will utilise the quantitative models learned from this course such as bottleneck analysis, inventory level, and order quantity. Instructions regarding the simulation game can be found in the course pack. The simulation will run over a duration of 120 minutes on Day 8. Each team should be equipped with laptops that can access the internet. On Day 2, we will prepare you to familiarise the simulation game. After that, you will have access to system and can study the historical performance of the company. Although all teams are not interacting and competing with each other in the simulation, they do operate under the same scenarios and their overall profits achieved are comparable. To encourage you to participate, 7.5% of your grade will be based on your relative performance in terms of the profit achieved. What is more important than the game outcome is your reflection on the game. Your team is required to submit a report that documents your pre-game efforts and your post-game reflections, which is worth 7.5% of your grade and is due one week after the game. The report should be typed and be no more than 5 pages in length excluding attachments, and should be submitted to the instructor by email. Final Exam (45%) The final exam is an open book and notes exam of 3 hours. It is comprehensive and may contain questions on any of the materials covered throughout the entire session. 4.2.2 Rationale/purpose for the assessment task How the tasks assess the learning outcomes is shown in the table in Section 4.2 above. 4.2.3 Presentation and format guidelines/requirements: For guidelines on formatting and presenting your assignment, see http://www.asb.unsw.edu.au/currentstudents/agsmmba/academicinformation/asses smentsandexaminations/Pages/default.aspx

MNGT8240 – Operations Management

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4.3

Late Submission AGSM MBA Program applies a daily penalty of 5% (of the maximum mark) to late assignments. This policy was reviewed in October 2009 in light of the fact that certain schools within the Australian School of Business apply a 10% penalty. The decision of AGSM MBA HK following this review was that current 5% penalty is appropriate to all of our programs and will remain unchanged.

4.4

Academic Honesty and Plagiarism Plagiarism is the presentation of the thoughts and words of another as your own. The University regards plagiarism as a form of academic misconduct, and has very strict rules regarding it. For advice on acknowledging your sources and referencing correctly to avoid plagiarism see the AGSM manual, Managing Your Learning (Section 8) and the UNSW Plagiarism and Academic Integrity webpage. https://my.unsw.edu.au/student/atoz/Plagiarism.html You should also familiarise yourself with the information regarding academic misconduct and the appeals process on the UNSW website: Academic Misconduct https://my.unsw.edu.au/student/academiclife/assessment/AcademicMisconduct.html Student Complaint Policy http://www.gs.unsw.edu.au/policy/studentcomplaintpolicy.html To see if you understand plagiarism, do this short quiz: http://www.lc.unsw.edu.au/plagiarism/plagquiz.html For information on how to acknowledge your sources and reference correctly, see: http://www.lc.unsw.edu.au/onlib/ref.html For the ASB Harvard Referencing Guide, see: http://wwwdocs.fce.unsw.edu.au/fce/EDU/harvard_ref_guide.pdf

5.

COURSE RESOURCES

5.1

Prescribed Textbooks Blue binders (course pack) containing the course materials and cases will be couriered to you one month prior to class.

5.2

eLearning information In addition to your blue binder (course pack), soft copies of your course materials are also available online on eLearning. To access eLearning@AGSM MBA, go to http://telt.unsw.edu.au and select Login to UNSW Blackboard. Login to the web Single Sign On (wSSO) using these details: Username: Password:

zNumber zPass

Should you have any difficulties accessing your course online, contact eLearning Coordinator on: Tel: Email:

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+61 2 9931 9541 [email protected]

Course Outline

For after hours supports contact IT Service Centre.

6.

Hours:

Mon-Fri: 8am-9am; 5pm-8pm Sat-Sun: 11am-2pm

Tel: Email:

+61 2 9385 1333 [email protected]

ADDITIONAL STUDENT RESOURCES AND SUPPORT The University and the ASB provide a wide range of support services for students, including:  UNSW Learning Centre (www.lc.unsw.edu.au) Academic skills support services, including workshops and resources, for all UNSW students. See website for details.  Library training and search support services: http://info.library.unsw.edu.au  UNSW IT Service Desk: Technical support for problems logging in to websites, downloading documents etc. [email protected]  UNSW Counselling Service (http://www.counselling.unsw.edu.au)  Free, confidential service for problems of a personal or academic nature; and workshops on study issues such as „Coping With Stress‟ and „Procrastination‟.  Student Equity & Disabilities Unit (http://www.studentequity.unsw.edu.au) Advice regarding equity and diversity issues, and support for students who have a disability or disadvantage that interferes with their learning.  AGSM MBA Hong Kong Office:  Tel: (852) 2841 2802  Fax: (852) 2588 1724  Address: Suite 2006, 20/F, The Centrium, 60 Wyndham Street, Central, Hong Kong  Email: [email protected]

7.

COURSE STAFF Instructor:

A/Prof Chung-Li Tseng

Email:

[email protected]

MNGT8240 – Operations Management

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