November 2013 – The OM Blog by Heizer, Render, & Munson

OM in the News: U.S. Call Centers Dial Up Employee Service

Handling a customer call at PNC's new Pittsburgh center — *Handling a customer call at PNC’s new Pittsburgh center*

In Chapter 2, we discuss the advantages and disadvantages of outsourcing such “non-core” functions as call centers to countries like India and the Philippines. But despite the offshoring of some call centers, it is still a big business in the U.S., reports The Wall Street Journal (Nov.27, 2013). As of last year, 2 million Americans worked as customer service representatives, many of them in call centers. That was up 6% from a decade before. About 68% are women.

“Companies are more likely to keep call center operations in the U.S. today than they were 10 years ago,” says one industry expert. “Workers have become more available amid a weak job market, and employers like the idea of having more control over their call centers.”

Companies also are striving to avoid being blasted on Facebook or Twitter for lousy service. As a result, they are making more efforts to recruit and retain high-quality call center people. Those efforts sometimes include offering something more than “nondescript buildings in nondescript locations.” Upgrading call center workspaces makes economic sense. They tend to handle more complex customer questions and problems than they did years ago. Customers get basic information from websites, and that leaves the more complicated matters for the call centers.

For example, in the heart of downtown Pittsburgh, call center employees of PNC Financial just moved into luxurious space inside a 6-story granite building that once housed Mellon National Bank and later served as a Lord & Taylor department store. The newly renovated Classical building features the original marble columns and 32 foot ceilings. The new space is so bright and white that “it feels like we’re in the Apple Store,” said one of the 700 PNC employees.

Classroom discussion questions:

1. Why are companies “nearshoring” their customer call centers?

2. Why upgrade call center workplaces?

OM in the News: From Navy Oil Tankers to Amazon’s Diapers

8 ships returning to Caroline Islands anchorage, 1944

Amazon’s online diaper sales and the U.S. Navy’s refueling protocol for World War II appear unrelated and worlds apart. Nevertheless, they are both answers to an identical logistics problem: how can an organization shorten the time between a customer’s order and a supplier’s response?

Amazon is seeking a way to decrease its response time to online buyers. In the case of diapers, this means encouraging a supplier such as P&G to relocate its operations adjacent to Amazon’s warehouses. With co-location, both firms presumably can reduce their shipping costs, better manage their inventories, and speed up deliveries.

The Navy experienced a similar logistics problem during World War II, writes The Wall Street Journal (Nov.25, 2013). In the early months of the war, the Pacific fleet engaged in hit-and-run tactics; it had to return to Pearl Harbor, where its oil supply tanks were located. When the Navy launched a 1943 offensive in the central Pacific, the geographical distance between consumer (fleet) and supplier (Hawaii) widened. Refueling consumed a precious commodity—time.

One logistic solution: seize an enemy-held island, convert the island into an advanced base and construct oil storage facilities for the fleet. That worked, but as the Navy accelerated its offensive, it outran the advanced base network. By 1944, the Navy introduced floating bases at Pacific anchorages. Commercial tankers delivered fuel oil to the anchorage, storing oil in barges. A gap, though, between oil demand and supply still persisted.

Then the Navy turned logistics on its head, dispatching 36 oilers to meet carrier task force units at prearranged locations in the forward area. Oilers now refueled fleet units on the move in “underway replenishment.” The results were dramatic. A carrier task force could remain free from a fixed base for 3 months. Fleet Admiral Nimitz termed the Pacific just-in-time supply chain as his “secret weapon.” Naval historians would describe Nimitz’s logistic plan as a “fleet within a fleet.” Amazon’s co-location has been called a “plant within a plant.”

Classroom discussion questions:

1. How is co-location used in the auto industry?

2. What are the supply chain problems for the US military in the Afganistan war?

OM in the News: The Critical Last Mile at eBay

There’s a hot new job in tech: delivery guy. As the holiday shopping season gets underway, same-day delivery has become a new battleground for e-commerce, reports The New York Times (Nov.24, 2013). For all the sophisticated algorithms and proprietary logistics software involved, many services come down to “valets,” who race to a store, scan the aisles for the requested items, buy them and rush them to the customer. The app for eBay Now, the company’s local shopping service, promises that valets will complete a shop-and-drop-off not just in the same day but “in about an hour,” a timetable crucial to the company’s intensifying efforts to one-up Amazon in the delivery game.

It wasn’t so long ago that overnight delivery seemed amazing enough. Then Amazon started building huge “fulfillment centers” near major U.S. cities to be as close to customers as possible. With 40 such centers encompassing more than 80 million square feet and employing 20,000 full-time workers, Amazon offers same-day delivery in 11 cities.

EBay, which last month announced plans to expand eBay Now to 25 cities, has a different model: use existing stores or “retail partners” as distribution centers and beat Amazon in the race against the clock. The personal, labor-intensive valet approach doesn’t translate easily into profit. “You just can’t get any hourly worker to do this — you need someone with a work ethic and a willingness to go out of the standard operating procedure to delight the customer,” said a Forrester Research analyst. “It is an H.R. issue, not a tech issue. Many of these companies are coming at it from a tech standpoint. One thing Amazon has done very successfully, is they’ve owned the entire value chain. They’ve owned the last mile, the moment when the package arrives. Once you can own the moment that matters, you build a loyal customer base.”

There is a 2 minute video attached to the article which illustrates the eBay Now system.

Classroom discussion questions:

1. What has happened to earlier quick delivery companies?

2. What are the OM issues involved in eBay Now?

Teaching Tip: Dealing with Cheating in Your OM Class

How do you deal with the sensitive issue of cheating in your operations management classes? Statistics show that nearly 3/4 of college students cheat during their undergraduate careers, a startling number attributed variously to the laziness of today’s students, their lack of a moral compass, or the demands of a hypercompetitive society. For James Lang, author of Cheating Lessons: Learning From Academic Dishonesty (Harvard University Press, 2013), cultural or sociological explanations like these are red herrings. The provocative research in his book indicates that students often cheat because their learning environments give them ample incentives to try–and that strategies which make cheating less worthwhile also improve student learning.

Drawing on an array of findings from cognitive theory, Lang analyzes the specific, often hidden features of course design and daily classroom practice that create opportunities for cheating. Courses that set the stakes of performance very high, that rely on single assessment mechanisms like multiple-choice tests, that have arbitrary grading criteria: these are the kinds of conditions that breed cheating. Promoting mastery and instilling the sense of self-efficacy that students need for deep learning is why Jay and I have worked so hard to develop MyOMLab. With this assessment software, your students can work on mastering the tools of OM, with instant feedback. You can assign homework, quizzes, exams with “algorithmic” problems, meaning that each student operates from a unique data set. Students can also be given multiple chances to improve homework scores. If you would like more information, visit http://www.myomlab.com/.

Although cheating is a persistent problem, the prognosis is not dire. The good news is that strategies which reduce cheating also improve student performance overall. Instructors who learn to curb academic dishonesty will have done more than solve a course management problem–they will have become better educators all around.

OM in the News: J.C. Penny Loses Control of its Inventory

Shoppers are buying more at J.C.Penny after a disastrous overhaul under former CEO Ron Johnson, who drove customers away when he did away with promotions and eliminated in-house brands. But the problem is that customers are also stealing more, reports The Wall Street Journal (Nov.21, 2013). As the chain is learning, its extensive inventory makes inventory management crucial. We note in Chapter 12 the importance of controlling pilferage through RFID and bar codes.

Theft spiked last quarter after Penny removed sensor security tags from merchandise while it shifted to a new inventory-tracking system that uses radio tags. Shoplifting took a full percentage point off Penny’s profit margins. That was just one more weight that dragged the 1,100-store chain down to a loss of half a billion dollars. The need to liquidate old inventory did further damage to profits.

The shoplifting. Penney unveiled plans in 2012 to add RFID tags to every item in its stores. The tags are more expensive than traditional bar codes, but they promise to make it easier to manage inventory. Sensor tags designed to prevent theft were removed from merchandise, because they would have interfered with the radio frequency. At the same time, Penney had switched to a friendlier return policy that did not require customers to present a receipt. The combination gave people the opportunity to grab armloads of merchandise off store shelves, walk over to a cash register and return the goods on the spot. New CEO Mike Ullman says “the move away from sensors actually encouraged thieves to come to Penney. Competitors were still using the devices, so most of the theft comes to our place.”

The company is now retagging items on the sales floors with sensors, as well as tagging those that it is bringing in. It also recently tightened its return policy by giving store credit, rather than a refund, to customers who return goods without a receipt and are unable to produce the credit card used for purchase.

Classroom discussion questions:

1. What else can Penny do to eliminate pilferage?

2. Why is inventory control crucial is service industries like retailers?

OM in the News: Speeding Up the McDonald’s Drive-Thru

McDonald’s Corp., losing the speed race to rivals and racking up customer complaints about slow service, is adding a third drive-thru window, reports The Chicago Tribune (Nov.15, 2013).

Called Fast Forward Drive-Thru, the reboot will start appearing in new and rebuilt McDonald’s stores next year. Patrons now pay at the first window and pick up food at the second. Soon there will be a second pick-up window. The drive-thru is even more important to McDonald’s than the Big Mac. The fast-food chain generates 70% of its sales from hungry drivers. Ever since McDonald’s created its first drive-thru in 1975 in Sierra Vista, Ariz., fast-food chains have competed fiercely to shave seconds off order times, equipping workers with headsets, video cameras and clocks showing how long cars have been waiting. In the early days, fast-food restaurants derived about 40% of their sales from drive-thrus.

Disgruntled diners have taken to Twitter to complain about slow drive-thru service at McDonald’s. “I HATE when McDonald’s makes me pull out of the drive thru line and wait in a parking spot like a chump,” @EmLynnClements posted last week. @HumblePie34 added: “McDonald’s needs an express drive thru lane so I don’t have to wait an hour for a mcflurry.”

A more complicated menu has bogged down McDonald’s service. Customers, for example, can choose from 9 different sauces to go with Mighty Wings. Fueling up at McDonald’s drive-thrus takes longer than at Taco Bell and Wendy’s. It takes 189 seconds at a McDonald’s, compared with 158 seconds at Taco Bell and 134 seconds at Wendy’s. McDonald’s drive-thru service is slower than last year and its slowest ever.

Classroom discussion questions:

1. Name 5 ways to increase service efficiency (see Chapter 5, page 175).

2. What are the advantages and disadvantages of adding the 3rd window? Why doesn’t every drive-thru use this approach?

OM in the News: Reinventing the Maquiladoras

Jordi Muñoz, a 27-year-old Mexican entrepreneur, makes small drones for civilian use. Muñoz’s Tijuana plant is a maquiladora, a factory that enjoys special tax breaks. When Mexico set up the first maquiladoras 50 years ago, they were sweatshops that simply bolted or stitched together imported parts, then exported the assembled product across the border to the US. America got cheap goods; Mexico got jobs and export revenues. “Now, with competition growing from other low-cost locations (such as Haiti), and with the government cutting some of their tax breaks, the maquiladoras are having to step up their efforts to become innovative,” writes The Economist (Oct.26, 2013).

Over the years, the maquiladoras have already lost much basic work, such as stitching fabrics, to cheaper places in Asia. Recently, rising pay in Chinese factories has made Mexico an attractive location again. Exports grew by more than 50% between 2009 and 2012, to $196 billion. Carmakers, in particular, have been investing heavily in Mexico in response to a recovery in US sales. Increased Mexican taxes risk prompting a fresh wave of departures to cheaper shores. So the maquiladoras are having to move into more sophisticated types of manufacturing and do more product design. On the first score, there has been some progress: much of the stitching done in Tijuana these days is not of T-shirts but of medical devices such as stents, made of fine pig tissue. The aim of Muñoz’s company and others is to go a step further and to get involved in design and development.

Aerospace and defense companies are among those thought likely to “nearshore” some of the manufacturing currently sent to China. The Tijuana maquiladora zone already has more than 50 firms in these industries, and it is here that the efforts to become more innovative are most visible. To become a plausible aerospace “cluster” and attract more investment from the world’s top manufacturers, the maquiladoras need to bolster the local supply chain, as well as produce more engineers capable of product design.

Classroom discussion questions:

1. What are the advantages of locating manufacturing plants in maquiladoras?

2. Why has Mexico announced a tax increase (from 17% to 30%) on maquiladora exports?

OM in the News: Nepali Hostages in the Apple Global Supply Chain

CEO Tim Cook planned the most aggressive production and launch schedule ever attempted by Apple. Even though few units had been produced by Sept.12, 2012, the iPhone 5 would go on the market in the U.S. and 8 other countries 9 days later. By year’s end it would be in stores in 100 countries and would sell at a rate of 3.7 million per week.

Yet, just months later, one of Apple’s main contract suppliers would be accused of holding foreign workers virtual prisoners in company dorms for 6 weeks, neither feeding them nor paying them. In this fascinating article, Businessweek (Nov.11-17, 2013) introduces us to 27-year old Nepali Bibek Dhong’s travails as fear and hunger turn to rage. Writes Businessweek: “Some men smashed windows. Others threw televisions from floors 6 to 7 stories above Dhong. When Malaysian police arrived, rather than making arrests, the officers ordered the company to start sending food.”

That supplier, Flextronics, made the cameras for the iPhone– then shipped them to the Chinese manufacturer Foxconn for final phone assembly. As Flextronics had to crank up its supply chain, it required sourcing and importing people—an army of them—to man factory lines. Staffing production lines in Malaysia goes this way; Companies tap an unregulated transnational network of thousands of recruiters. They fan out into the farm fields and impoverished cities of Indonesia, Cambodia, Myanmar, Vietnam, and Nepal. The positions they’re trying to fill are so coveted that they’re not merely offered, they’re sold. The brokers take fees from families, representing as much as a year or more of wages; frequently the fees are paid with loans that can take years to pay off.

For the iPhone 5 rollout, a recruiter working for Flextronics contacted brokers in Nepal, in September, 2012, urgently seeking 1,500 men to make cameras. Once in Malaysia, Flextronics managers keep workers’ passports locked in a safe until moneys to recruiters were paid up. Although Apple calls that bonded labor, one step removed from slavery, it blames the abuses on companies that rely on a daisy chain of payment-demanding brokers and recruiters.

Classroom discussion questions:

1. What is Apple’s responsibility in this supply chain?

2. Why do workers seek out such jobs?

OM in the News: The Memphis and Louisville Aerotropolises

“After most Memphians have gone to bed and before they switch on their coffee-makers,” writes The Economist (Nov. 2, 2013), “150 cargo jets land at Memphis International Airport and take off again.” They have no passengers, but some planes are able to carry 225,000 pounds (102 tons) of cargo non-stop from Tennessee to Shanghai. Such flights make Memphis the world’s 2nd busiest airport by cargo volume (after Hong Kong). Around 10,000 people work the FedEx overnight shift, sorting 1.5 million packages.

Memphis calls itself America’s “aerotropolis,” referring to the title of a recent book by Kasarda and Lindsay. The book argues that cities of the future, and their economies, will increasingly be built around airports. We open Chapter 8, “Location Strategies,” with a definition of aerotropolis as: “an airport integration region, extending as far as 60 miles from the inner cluster of hotel, office, distribution, and logistics facilities.”

Memphis’ air-cargo operations produces a total economic output of $22.1 billion and supports 132,000 jobs. Louisville, Kentucky—home to the hub of FedEx’s chief rival, UPS—has a similar story. Louisville’s 2 airports are responsible for 9% of all jobs in the Louisville area.

The carriers have in turn attracted companies that profit from being near a direct mail hub. Some are retailers: Zappos, an online shoes and clothes store, has a huge distribution center there. CaféPress, another online seller, moved its headquarters from California to Louisville, netting it millions from cost savings and later cutoff times for orders. Louisville claims that since 1993 more than 150 firms have moved there to be near the UPS hub. These include health care outfits such as the National Eye Bank Center, which stores corneas for ocular surgery, and Oxford Immunotec, a medical diagnostics firm, which moved its laboratory from Boston. Now Oxford can guarantee that blood samples from almost anywhere in America can get from patient to lab within 32 hours.

Classroom discussion questions:

1. Why is the aerotropolis concept a location strategy factor?

2. Identify some other cities in the world that fit this definition.

OM in the News: China’s Toxic Legacy From Its Rare Earths

A rare earth ingot is prized for its magnetic properties, but refining is a dirty process

Manufacturers of high tech products rely on a steady stream of 17 “rare earth” metals to make their goods. These lightweight, malleable minerals are essential to hybrid cars, cell phones, and disk drives. Rare earths had skyrocketed in price in the past a few years ago as China, the world’s dominant producer, unilaterally imposed taxes and annual tonnage limits on its exports. Lanthanum, for example, jumped from $4.5/lb to $73/lb. Neodymium surged from $9/lb to $207/lb and dysprosium from $243/lb to $1,135/lb.

But the Chinese export restrictions have become less important recently for two reasons, reports The New York Times (Oct.23, 2013). Alternative rare earth mines have gone into production in the US and Australia, reducing China’s share of global production to 85%, from 95% three years ago. And companies have become much more efficient about economizing on rare earths, especially the costliest ones, such as heavy rare earths like dysprosium. The global oil industry has similarly begun using less lanthanum during oil refining. Only 1.5% of the latest catalyst formulations for oil refining are now lanthanum, down from 4-5% three years ago.

Communities scattered across China face heavy environmental damage that accumulated through 2 decades of unregulated rare earth mining and refining. China’s recent white paper detailed environmental harm caused by the industry, and was used to try to justify the need for export restrictions. “Excessive rare earth mining has resulted in landslides, clogged rivers, environmental pollution emergencies and even major accidents and disasters, causing great damage to people’s safety and health and the ecological environment,” said the government report. Whole villages in Inner Mongolia have been evacuated and resettled elsewhere after reports of high cancer rates associated with the refineries there. A hazardous stew of toxic chemicals and low-level radioactive waste from refineries has been dumped into the world’s largest tailings pond, which covers 4 square miles near the Yellow River.

Classroom discussion questions:

1. Why are rare earths important in manufacturing?

2. Provide examples of products (not mentioned in the article) and their specific rare earths.

OM in the News: And the Winner of This Year’s Ergonomics Prize Is…

Coca-Cola found a way to improve the posture of workers responsible for off-loading fruit from shipment containers to a collection bin. It didn’t involve a high-tech, expensive fix. Associates simply designed and built a tool using spare pipe from their maintenance department. During the old process (left), a worker had to prop a door open using a shovel in one hand to control the flow of the fruit, while the other hand had to unlatch the door and sweep the fruit out of the container and into the bin. The tool allows for the fruit to be released without the hand support of the worker.

For this innovative, less physically taxing approach to a daily problem, the company took first place (out of 180 entries) in Humantech’s Find It – Fix It Challenge. The contest, described in Material Handling & Logistics (Nov., 2013), recognizes simple and effective workplace solutions that increase productivity, improve worker morale and reduce workplace injuries and illnesses. Honorable mentions went to Goodyear Tire and to Hitchiner Manufacturing.

Prior to the improvement at Goodyear, an operator had to change and move liner rolls while in awkward postures. With shrugged shoulders, poor grip and radial deviation postures in the hands and wrists, the operator had to carry the liner roll to the rack, and then lift and set it into its desired location. After adding an ergonomically automated lifting and lowering device to support the liner rolls, the operator’s new task is to push the device to the desired location, which eliminates the awkward postures.

Initially, at Hitchiner, an operator had to pick up a 50-pound bag of wax beads from a pallet and carry it to a workstation. At least once per shift, the operator had to pick up the bag and dump beads into a barrel to refill it. Now, the operator just pushes the near empty barrel to the filler to be refilled. This improvement eliminated all heavy lifting and awkward postures.

Classroom discussion questions:
1. Provide other examples of how ergonomics can improve a process with which you are familiar.

2. Who is in the best place to provide process improvements?

OM in the News: Incentives Drive Boeing Back to Washington State for the 777X

After much wrangling and predictions that Boeing would locate its new 777X plant in nonunion South Carolina, the firm may have reached deals with state and IAM union officials to win the aerospace giant new tax breaks and 8 more years of labor peace in exchange for building its planned jetliner in Washington. The Wall Street Journal (Nov.6, 2013) reports that Gov. Jay Inslee called for a special session of the state legislature to approve a package of tax and policy incentives valued at $18.7 billion. Inslee said approval of that package and of the labor agreement are necessary for Boeing to make the 777X in its longtime Puget Sound base. “Inaction will cost the state of Washington,” said Inslee.

The moves capped an intense period of maneuvering over the plans for the 777X, a long-range jetliner considered pivotal to Boeing’s future. The 777X, scheduled for its 1st delivery by 2020, is likely to be the last major new jet from Boeing for many years, and there has been intense speculation over where the plane and its huge carbon-fiber composite wings would be built. The Wall Street Journal reported just last week that Boeing was leaning towards a nonunion plant in South Carolina. Boeing also announced it would give “much” of the engineering work on the 777X to engineers in 5 U.S. states and Russia, with no mention of plans to use engineers in Washington.

The South Carolina facility, Boeing’s first aircraft assembly plant manned by a nonunion workforce, has been a source of tension with the IAM. Boeing selected it in 2009 as the site of its second 787 Dreamliner assembly line, prompting a complaint from the National Labor Relations Board that the move was retaliation for a 2008 strike by the IAM that halted Boeing’s assembly lines for 58 days. The potential new agreement with IAM leaders conveys to 2024 and includes a $10,000 signing bonus for workers. The union said the deal would provide an “unprecedented degree of labor stability in the volatile and competitive industry.” “It’s a tough one, if you call their bluff and you’re wrong, then you’re just kicking yourself,” adds a machinist.

Classroom discussion questions:

1. Why is this such a critical OM decision for Boeing?

2. What factors discussed in Chapter 8 did the company consider in selecting Washington over S. Carolina?

Guest Post: The 3 Platforms Fuelling Growth in Supply Chain Finance

Our Guest Post today comes from Oliver Belin, an executive with PrimeRevenue (http://www.primerevenue.com/blog/), who is coauthor of the book Supply Chain Finance Solutions (Springer Verlag, 2011).

The current, global market size for Supply Chain Finance is estimated at $275 billion of annual traded volume. It is still relatively small compared to the market size of other invoice finance solutions such as factoring, which remains the largest trade finance segment and is primarily domestic in focus. There are about 200 global Supply Chain Finance programs of scale in place. These programs are run both domestically and cross-border and in multiple currencies. Still, the market potential is far from its capacity. If examining spending of large organizations, such as Lowe’ s $33 billion, it becomes apparent that Supply Chain Finance programs usually require a multi-bank platform due to the credit and capital issues associated with banks.

Supply Chain Finance practices have been in place for over a decade and 3 distinctive platforms have crystallised.

In buyer managed platforms the buying organization owns and runs the platform. Some large retailers, such as Carrefour, are using such solutions and managing the finance program, supplier onboarding, and liquidity themselves.

In bank proprietary platforms the IT solution is managed by commercial banks providing the technology platform, services and funding. This solution is used by several large buying organizations such as Carlsberg and Marks & Spencer.

The platform that has exhibited the strongest growth is represented by independent third-party supply chain finance providers offering multi-bank platforms. This solution separates the entities, a specialized service provider which manages the platform, and the funding partner, which provides liquidity and takes the credit risk. Based on the fact that funding in Supply Chain Finance is uncommitted and due to the general limitations in terms of credit risk appetite, companies such as Volvo, Lowe’s, KPN and other leading organizations have chosen this structure.

Good OM Reading: Embracing Digital Technology

Companies routinely invest in technology, and too often feel they get routine results. But a new MIT Sloan Management Review (Oct., 2013) study makes it clear that companies that are aggressively engaged in “digital transformation” tend to perform better. Why? According to the authors, “the current wave of digital innovation is about connecting companies to customers, and companies can’t afford to miss out on opportunities to improve efficiency, service, sales and performance. Companies must succeed in creating transformation through technology, or they’ll face destruction at the hands of their competitors that do.”

Researchers divided companies into 4 categories in terms of their commitment to digital transformation, then tracked the companies’ performance over time. “Digital transformation” refers to overall intensity of the effort to align a company’s operations with its business model through successful uses of digital technologies as a replacement for older processes. The 4 categories of enterprise were:

Digirati: Those companies that have gone all-in on digital transformation. This relatively small percentage of companies outperformed all others across the board.

Conservatives: Companies that have been slower than average to move toward digital transformation. Conservatives performed worst in revenue creation at -10%.

Fashionistas: Companies that publicly say transformation is important to them and may even throw a lot of money at transformation efforts, but whose efforts don’t match their rhetoric. Fashionistas scored worst in profitability at -11%.

Beginners: These performed worst among all the companies in terms of profitability (-24%) and 2nd worst in revenue creation and market valuation.

Results mean, for example, that automating an e-procurement system doesn’t just reduce the amount of paper being shuffled; it also gives a firm more accurate data that can help negotiate lower prices from vendors. Transforming warehouse management doesn’t just reduce headaches for shipping managers; it also can lower the amount of money tied up in inventory. And digital transformation of fleet management not only saves fuel and improve drivers’ efficiency; it also can help a company quickly and cost effectively serve customers and earn more and bigger orders. The bottom line: companies aggressively committed to digital transformation excel.

Guest Post: Celebrating 25 Years of POM Software

Our Guest Post today comes from Prof. Howard Weiss, at Temple University. Howard writes about his 25 years of developing POM for Windows, which we provide free with our OM texts.

This month marks the 25^th anniversary of Pearson’s POM software package. Just as technology has evolved over the past 25 years, so too, has this educational resource. The initial package, PC-POM, indicated that POM was designed for DOS and would not run on a Mac computer. Today, POM will work well on a Mac using vmWare or Parallels to emulate Windows.

Jay and Barry decided that PC:POM would be a valuable addition to their text and it became available as AB:POM, where AB stood for our publisher at that time, Allyn & Bacon. The POM software has been distributed with every edition of Heizer/Render since its inception. (By the way, OR/MS Today (page 10) just interviewed Jay and Barry about their 30+ years of writing).

In 1996, with the rising popularity of Windows, POM was redeveloped for Windows. While the solution techniques remained the same, it was a monumental challenge to change the graphical user interface to match the look and feel of Windows. Cutting and pasting between POM and other Windows programs such as Excel and Word were built into POM. For preparing the manual, scissors and paste were no longer necessary, because screen captures could be copied from POM and pasted into Word. In addition an option to save problems as Excel files was built into POM in which the models are saved as complete Excel models with appropriate formulas and/or graphs.

An exciting recent addition (in Version 4) is the capability to copy from MyOMLab and paste into POM.

Developing the software has been a rewarding venture and it has been very gratifying to hear from students around the world who have used the program. I hope that if you use POM, you and your students have had the same positive experiences. I encourage those of you who have not used it to give it a try in your classroom.