Teaching Tips – The OM Blog by Heizer, Render, & Munson

Teaching Tip: Why Quality Inspections Often Fail

We all know that students have trouble staying focused for a long lecture, even with the great job we all try to do. So try to find a short activity that will make a teaching point, break up the class for a few minutes, and get all the students enthused. Here is something you may want to try in Chapter 6, Managing Quality. It takes about 10 minutes.

In this chapter, we have suggested that building quality into a process and its people is difficult. In the old days, inspection was the main form of quality control. But inspection may not catch all the errors, and it may be expensive. To indicate just how difficult inspections can be, ask your students to turn to the OM in Action box on page 234, called “Inspecting the Boeing 787”.

Ask them to each count the number of E’s (both cap and lower case), including those in the title. This should be a pretty easy inspection job, I think, and I offer a crisp $10 bill to the first student to give me the correct count. That usually gets their attention!

As they each finish, I ask them to shout out their count and I do a tally on the board. There is amazing variation and I only have to shell out the reward in maybe one out of five classes. The answer, by the way, is in the Instructor’s Solutions Manual, as discussion question #18.

If you can share a class exercise of your own, we would be very happy to publish it as a Guest Post.

Teaching Tip: Advice to Your Supply Chain Students

Darrell Edwards, supply-chain professor at U. Tennessee and former COO of La-Z-Boy, shares professional wisdom for new graduates in Industry Week (Jan. 14, 2026). Darrell was also our guest on OM Podcast #37, speaking on the topic of global supply chain vulnerabilities.

Build a Plan To efficiently increase your early career success, have a plan. List your career goals for the first year and your objectives for assimilating successfully into your supply chain role. A widely cited study on goal setting says, “you become 42% more likely to achieve your goals and dreams simply by writing them down on a daily basis.” Regardless of your career objectives, put your goals on paper, set timelines for their achievement, and review and access them frequently.

2. Attitude Matters Most Most companies will hire and promote aspiring leaders who collaborate well and are good team players with a “can-do” attitude. Of course, you must possess basic managerial and leadership skills, but having a positive attitude goes a long way. Standout qualities could include always coming to work early or typically being the first to volunteer for a necessary but unglamorous project. Companies promote attitudes.

3. Take a Line Job Don’t be afraid to take a job in a warehouse, a factory, or in a logistics hub; it will help accelerate your supply chain career. These skills are critical if you aspire to lead within a supply chain. It’s unlikely you will be able to land a significant corporate role in supply chain leadership without having also worked a line job.

4. Know the Business It’s OK if you don’t know all the specifics of the business when you start a role; as a new leader, you’re not expected to. That doesn’t give you a free pass not to learn it, and quickly. Refine your skills in areas you understand but aggressively throw yourself into supply chain functions where you are weak.

5. Find a Mentor. A mentor can help shorten the cultural learning curve and help you navigate the company “landmines.” A mentor is in the unique position to offer advice on what to do—and most important, what not to do. That person can help you develop the right questions to ask and advise you on your career plan.

6. Deliver Results Whatever the task, you must be prepared to deliver results and work to develop a reputation for doing so. Reputations are built early in a career, and once built, they are hard to change.

Teaching Tip: AI in the OM Classroom– Panic, Possibility, and Pedagogy

The gulf between those working to integrate AI into their teaching and those swearing off its use entirely is growing wider by the month. It’s not just about comfort with technology; it’s about pedagogical identity, ethics, trust, and the role of higher education in a rapidly changing world, reports Faculty Focus (Aug. 13, 2025).

Some faculty are experimenting with AI-graded orals. Others are defaulting to analog tools like in-class handwritten exams. Still others are choosing not to address AI at all—perhaps hoping it will fade.

AI may or may not upend higher education, but in the meantime, it’s prompting urgent questions: What are we assessing? What do we value? How do we prepare students not just to perform, but to think, reflect, and adapt in a world where generative tools are the norm?

Faculty skepticism toward AI isn’t unfounded (data privacy, environmental electricity toll, murkiness of “scraped” datasets, student creativity loss, voice and bias, etc.). It’s easy to reduce the AI debate in education to one issue: cheating. And yes, generative AI makes it easier than ever to outsource writing, coding, or even lab reports.

But neither is pretending this technology doesn’t exist. AI isn’t just a technological shift; it’s a mirror reflecting what we value in education, labor, and society at large. In today’s classroom, silence or neutrality sends a message.

So the most important place to start is also the simplest: your syllabus. Be specific about when, how, and why students are or are not allowed to use generative tools. If AI is restricted for certain assignments, explain the rationale. If it’s allowed, clarify what constitutes appropriate use—and what crosses the line into misrepresentation. Our goal is to model critical thinking. When we articulate our stance on AI, we teach students how to approach emerging technologies with intention rather than fear or opportunism. It’s a pedagogical opportunity. It invites students to see learning as more than task completion—and faculty as more than enforcers of boundaries.

Our students don’t need us to have all the answers. They need us to model how to live with the questions. They need to see that thoughtful, ethical, human learning is still possible, especially in a world full of algorithms.

Teaching Tip: Teaching OM in an AI Age

We know our students need to think critically in an AI age to be productive and engaged future employees. One solution, writes Faculty Focus (July 9, 2025), to the triple challenge of fostering critical thinking, meaningful learning, and academic integrity is to double down on transparency. We can emphasize the why we want responsible AI use: why we want students to use their own cognitive abilities for some tasks, why using AI could be helpful at times, and why we’ve crafted AI-integrated assignments in the ways we have.

Here are five steps to update assignments in the AI age:

Step 1: Take a critical look at your current syllabus. If AI can easily complete a task (try running your instructions through ChatGPT to find out), maybe it’s no longer a relevant measure of authentic learning. Add new instructional practices (like modelling AI use) and new components of the assignments you update or keep.

Step 2: Consider whether and how students should use AI on the assignments. Students want to know exactly what is appropriate for AI use in your class. A helpful tool for this process is the 5-level AI Assessment Scale (AIAS). The levels range from No AI, AI Planning, AI Collaboration, Full AI, and AI Exploration. Each one identifies and sanctions different ways students can use AI in appropriate and meaningful ways to support their learning.

Step 3: Discuss and model your expectations. Students are not sure what is acceptable in this current moment. What better way to help them feel confident while developing the AI skills they need than modelling what you’re looking for? Take class time or record a video for your online class to teach your students what you expect them to do with AI for each assignment, what not to do, and what you’ll be looking for in their finished product.

Step 4: Ask students to disclose their AI use. One approach is to use the AI Disclosure (AID) framework to document how students used AI, or add an appendix to each assignment, or add comments or footnotes to make transparent what they wrote and what AI wrote.

Step 5: If you suspect inappropriate use of AI, don’t accuse students of cheating. Instead, have a conversation with them. A primary goal of the AIAS is to facilitate discussions about AI use.

As I pointed out in a recent blog, our author team can help. We have developed AI exercises for each chapter of the new 15th edition.

Teaching Tip: The 15th Edition Ties AI Into Your OM Class

Our new 15th edition, just released, brings the topic of artificial intelligence into the course with AI in Action boxes and new material throughout the text. But we have gone a step further through our Instructor’s Resource Manual, a fantastic teaching tool. If you are new at teaching the course, you will find this 400 page guide an invaluable resource. Each chapter now contains an AI in the Classroom section, created by Prof. Jon Jackson at Providence College, providing 15-20 minute exercises. Here is a sampling from 3 early chapters:

Chapter 1
All firms, regardless of industry, can use productivity measures to track process performance. This exercise is designed to explore relevant productivity measures for different industries with the help of an AI-powered chatbot. Student groups can explore the following types of
facilities/firms (each group will pick one):
 Manufacturing facility  Market research firm
 Warehouse facility  Accounting firm
 Retail store  Financial services firm
 Restaurant  HR department
Students can use the following AI prompt structure: ROLE: I am a manager in a [insert facility/firm here]. GOAL: I want to measure productivity (an output divided by an input). REQUEST: generate 5 measures of productivity.
In groups, students can compare AI responses, evaluate the validity of the productivity measures (connecting to Chapter 1 definitions), and identify the best productivity measures to implement.

Chapter 3
A work breakdown structure (WBS) can provide a hierarchical description of a project into more and more detailed components. This activity is designed to practice this process for fictional projects around campus with the help of an AI-powered chatbot. Student groups can explore the following projects (each group will pick one):
 College graduation party  Student art exhibition
 Charity 5K event  Entrepreneur shark tank
 Intramural sports tournament
Students can use the following AI prompt structure: ROLE: I am the project manager for an upcoming [insert event here]. GOAL: I want to create a work breakdown structure to break the project into more manageable components. REQUEST: generate a work breakdown structure with 4 main tasks, each with 2 subtasks. For each subtask, also provide a short description and an estimated duration to complete the subtask.
In groups, students can compare AI responses, identify if any main tasks are missing (or unnecessarily included), and evaluate the accuracy of duration estimates.

Chapter 4
AI-powered chatbots can be helpful to enhance our understanding of confusing topics, but it isn’t guaranteed to provide accurate information. This in-class activity (15-20 minutes) is designed to get us in the habit of being critical of AI output, and if necessary, re-prompting the AI-powered chatbot to give a better answer. Student groups will try to answer the following questions with the help of the AI-powered chatbot:
 When does a 2-period weighted moving average equal the Naïve approach?
 When does the exponential smoothing method equal the Naïve approach?
 When is it best to use MAD vs. MAPE?
In groups, students can critically assess the accuracy of the AI responses (referencing material in Chapter 4) and identify more effective ways to prompt AI-powered chatbots.

For a desk copy of the 15th edition, please click on this link.

Introducing Operations and Supply Chain Management, 15th ed.

Jay, Chuck, and I are thrilled to introduce the latest edition of our text, which has just been published. We think this is our most significant revision as we have made substantial pedagogical changes.

First, each chapter has been edited, revised and updated to ensure the significant role the supply chain plays in successful operations. There is substantial new material, cases, problems and questions. Because of this, we have added supply chain management to the text title.

Second, we have created the first interactive book in our field. There are interactive graphs that bring the dynamics of OM to the students. Students can now manipulate parameters of OM issues and decisions and answer questions posed about the impact of these changes. This feature, found throughout the book, provides insight into OM not otherwise available in a static text. Here is an example of one from the chapter on Capacity Management.

We have also created hundreds of 1-2 minute videos of real, well-known companies to illustrate material in the e-text. After reading about ABC analysis in Chapter 12, Inventory Management, for example, students can click on the icon clip from a firm like Nautique Boats to see how they use the model. What better way to illustrate text material than real-world examples of such firms as Hard Rock Cafe, Alaska Air, Frito-Lay, Orlando Magic basketball, Celebrity Cruises, Arnold Palmer Hospital, and others–all filmed by our team specifically to match the text.

We have created “In the News” boxes at the end of each chapter to focus on current events in OM and SCM. Regular monthly updates will flow through to you and your students keeping the field as current as possible.

There are now 57 OM in Action, AI in Action, and SCM in Action boxes, which are real-world examples and tell interesting tales of operations and supply chain management throughout the text. They deal with such topics as: “Using AI to Design New Cars,” “Risk Management in Apple’s Supply Chain,” “Airline Loyalty Programs and Capacity,” and “San Francisco Airport’s New Digital Twin.”

After every topic is introduced, there is now a quick self-test (which can be graded in MyLab if you choose) to help students confirm that they understood what they just read. Our research shows they like and will use this tool.

These are just a few of the new digital text features. We will present more in upcoming posts. Just click on the “Order a Desk Copy” at the top of this screen to review all these new approaches.

Guest Post: The Missing Digit Puzzle

Prof. Andrew Stapleton at U. of Wisconsin-LaCrosse shares this teaching tip to enliven your class

This math puzzle looks a lot more intimidating than it really is. It is called the Missing Digit Puzzle. Pick a student to come to the front and write down a number on the white board or overhead projection. Hide or otherwise cover your eyes in some way so that you can’t see what your student is writing.

Ask your student to secretly write down ANY number (at least four digits long). e.g. 78341
Ask her to add up the digits… e.g. 7+8+3+4+1 = 23 … and then subtract the answer from the first number e.g. 78341 – 23 = 78318
Ask her to then cross out ONE digit from the answer. (It can be any digit except a zero) e.g. 7x318
She then reads out what digits are left e.g. 7-3-1-8. Even though you haven’t seen any numbers, you can say what the missing digit is! EIGHT

THE SECRET:
This great puzzle relies on the power of 9.
After your student has added up the digits and subtracted them, the answer will ALWAYS divide
by 9. If a number divides by 9, then when you add the digits up, they will also divide by 9. If
you check our example 7+8+3+1+8 = 27 which does divide by 9. When she crosses a digit
out, she then reads out the digits that are left. You add them up. In the example we had 7+3+1+8
= 19. All you do now is see what you have to add on to your answer to get the next number that
divides by 9! The next number to divide by 9 after 19 is 27. So, you need to add on EIGHT to
get to 27. This is the number that was crossed out!

Here’s another example:
Say the number written down is 873946284 (yikes!).
Your friend adds the digits 8+7+3+9+4+6+2+8+4 = 51
Your friend does the subtraction: 873946284 – 51 = 873946233
(So far you have NO IDEA what numbers are whizzing around!)
Your friend crosses a digit out 87394x233 and tells you what’s left.
You add 8+7+3+9+4+2+3+3 = 39.
The next number that divides by 9 after 39 is 45. As 45-39=6 this means that SIX is the missing
digit.
You can do this one quickly and even have other students come up and give it a try – and you
will always be able to tell what the missing digit is!

Guest Post: An Impressive Two-Minute Math Challenge to Use in Class

Prof. Andrew Stapleton at U. of Wisconsin-La Crosse shares with us a fun teaching tip.

Kick off your class with this captivating two-minute math trick!
Step 1: Grab a calculator. Ask everyone to take out their calculator or open the calculator app on their phone.

Step 2: Create a six-digit number. Instruct each student to think of any three-digit number and repeat it to form a six-digit number. For example: 729 becomes 729729.

Step 3: The magical prediction. Invite students to shout out their six-digit numbers all at once. Pretend you’re calculating each one in real-time and confidently declare:
“I am going to calculate quickly and give you three directions and you will never have a remainder. That is, each iteration you will have a whole number. Follow my instructions, and your final result will always be your original three-digit number!”

Step 4: The steps.
Have everyone perform these operations on their six-digit number:
Divide the number by 13 (they’ll get a whole number).
Divide the result by 11 (still a whole number).
Divide that result by 7.
Surprise! Each student ends up with their original three-digit number.

How does it work?
The math is straightforward but seems like magic:

Multiplying a three-digit number by 1001 (i.e., 13×11×7) creates a six-digit number by repeating the original. Dividing in reverse (by 13, then 11, then 7) simply uncovers the original three-digit number.

The real fun? Your dramatic prediction adds flair and mystery, making the trick seem far more complex than it is. Enjoy the “wow” moment as your students are amazed!

Teaching Tip: Why NFL Players Are Studying Project Management

On the topic of project management (Chapter 3), you might find this story of how former NFL football players are tackling that subject interesting.

Will Rackley has gone from competing in the NFL to analyzing business operations at Atrium.

It turns out real NFL retirees who enter the project management business are learning to make an impact in different ways. “You can’t just start knocking people out of their cubicles,” says Will Rackley, a former pro offensive lineman who is five weeks into a job as a business operations analyst at the staffing firm Atrium. “It can be a culture shock when stepping into a corporate setting, as opposed to how things are done in a locker room.”

Rackley hasn’t gone soft—and toughness is a big reason why he and other ex-NFL players are coveted job candidates, reports The Wall Street Journal (Feb. 10, 2025). Managers often struggle to recruit people who can take, and deliver, candid feedback. A gridiron pro accustomed to coaches who yell, cuss and call out mistakes in postgame film sessions isn’t likely to wilt under a little constructive criticism.

The former NFL players looking for regular jobs generally aren’t Hall of Famers with set-for-life money. Often they are men who were pushed out of the game by injuries or younger, cheaper draft picks. They have dealt with disappointment and regrouped.

Rackley was a third-round selection back in the 2011 NFL draft. This year, he was a No. 1 pick when Atrium Corp. scouted for someone to analyze internal operations and suggest improvements. It turns out Rackley had excelled in the project-management program that Atrium and Microsoft run in partnership with the NFL. But he had to compete for the job with about 150 people, mostly nonathletes with traditional résumés.

The project-management program that trained Rackley recently opened applications for its second cohort of 20 NFL veterans who will study full time for 8 weeks with Microsoft instructors. It is designed to build technical skills and fill in blanks on the résumés of former players who missed internship and entry-level job opportunities while training year-round to reach the pros.

“This curriculum gives them mock projects and a credential they can take to an employer and say, ‘I may not have as much job experience, but I have technical training in addition to my playing career.’” says Atrium’s VP.

Guest Post: “Exploring Fibonacci– A Math Trick with Applications in OM

Prof. Andrew Stapleton, at U. Wisconsin-La Crosse, provides another interesting exercise to liven up your OM class.

The Fibonacci sequence, introduced by mathematician Leonardo Fibonacci from Pisa, Italy in the 12th century, is a number sequence where each term is the sum of the preceding ones. A typical Fibonacci sequences looks like: 1, 1, 2, 3, 5, 8, 13, 21, 34, and so on. While this is the most well-known version, Fibonacci numbers can begin with any two numbers on the number line as long as they follow the same pattern of addition.

The sequence is closely related to the Golden Ratio, a concept that appears frequently in nature (e.g., in the spiral pattern of shells or of sunflowers) and art (e.g., proportions in Renaissance paintings).

Interestingly, the Fibonacci sequence also has practical applications in Operations and Supply Chain Management. It can be applied in areas such as supply chain network design, forecasting inventory fluctuations, resource allocation, and even in facility layout optimization.

Fun Math Trick using Fibonacci Sequence
Here is an engaging way to explore Fibonacci numbers with your students:
1. Have a student pick any two numbers, say 5 and 4.
2. Add the numbers together (5+4=9).
3. Now, take the second and third numbers (4+9=13)
4. Continue the process for ten steps and calculate the sum.
For example, start with 5 and 4. These yields: 5, 4, 9, 13, 22, 35, 57, 92, 149, 241.
Now calculate the sum of the sequence. The sum is 627.

How to Predict the Sum:
Before calculating, you can impress your students with a neat trick! Here’s how:
 Instead of adding all of the numbers manually, look at the fourth number from the bottom of the list. In this case, it is 57.
 Multiply the number by 11.
57 x 11 = 627 – this gives you the total sum without having to add them up.
This works because the Fibonacci sequences follow a predictable pattern:
This is what the list of numbers will be:

a
b
a + b
a + 2b
2a + 3b
3a + 5b
5a + 8b
8a + 13b
13a + 21b
21a + 34b
The sum is 55a + 88b, which is 11 times the seventh number. Since multiplying by 11 is a relatively simple calculation, this creates a fun and useful math trick to amaze your students and connect math concepts to OM.

Guest Post: The Missing Digit Puzzle!

Prof. Andrew Stapleton at U. of Wisconsin-La Crosse shares with us another fun and motivational teaching tip.

This math puzzle looks a lot more intimidating than it really is. It is called the Missing Digit Puzzle. Pick a student to come to the front and write down a number on the white board or overhead projection. Hide or otherwise cover your eyes in some way so that you can’t see what your student is writing.

Ask your student to secretly write down ANY number (at least four digits long). e.g. 78341 Ask her to add up the digits… e.g. 7+8+3+4+1 = 23 … and then subtract the answer from the first number e.g. 78341 – 23 = 78318. Ask her to then cross out ONE digit from the answer. (It can be any digit except a zero) e.g. 7×318. She then reads out what digits are left e.g. 7-3-1-8

Even though you haven’t seen any numbers, you can say what the missing digit is! EIGHT.

THE SECRET: This great puzzle relies on the power of 9. After your student has added up the digits and subtracted them, the answer will ALWAYS divide by 9. If a number divides by nine, then when you add the digits up, they will also divide by 9. If you check our example 7+8+3+1+8 = 27 which does divide by nine. When she crosses a digit out, she then reads out the digits that are left. You add them up. In the example we had 7+3+1+8= 19. All you do now is see what you have to add on to your answer to get the next number that divides by nine! The next number to divide by 9 after 19 is 27. So, you need to add on EIGHT to get to 27. This is the number that was crossed out!

Here’s another example: Say the number written down is 873946284 (yikes!). Your friend adds the digits 8+7+3+9+4+6+2+8+4 = 51. Your friend does the subtraction: 873946284 – 51 = 873946233 (So far you have NO IDEA what numbers are whizzing around!) Your friend crosses a digit out 87394×233 and tells you what’s left. You add 8+7+3+9+4+2+3+3 = 39. The next number that divides by 9 after 39 is 45. As 45-39=6 this means that SIX is the missing digit.

You can do this one quickly and even have other students come up and give it a try – and you will always be able to tell what the missing digit is!

Guest Post: Random Number Prediction–A Class Exercise

Prof. Andrew Stapleton at the U. of Wisconsin-Lacrosse shares a teaching tip when discussing random numbers.

Predict a “random number” by alternating four-digit contributions. Start by determining a 5- digit number and writing it down in dark ink on a large piece of paper and sticking it in your briefcase. I act like I am picking random numbers, but I know exactly how to get to the number I have pre-determined.

Here is an example: I tell my class, “Let’s pick some numbers, I’ll start”: 4729 Mine I already know that the final number – the one written on the large piece of paper in my briefcase is 24727.

I then ask for two students to give me each a two-digit random number. The greater the number of participants the greater the impact. Student one chooses “58” and Student 2 chooses “32.” So 5832 yours

4167 Mine I act like I am thinking about another random four-digit number, but what I am doing is making their digits and mine add to 9999. (i.e., 5832 + 4167 = 9999)

I again ask two different students to each give me a two-digit random number. One gives me “69” and the other “02”. So 6902 yours

3097 Mine Again I make theirs and mine add to 9999, but I don’t do it right away. In fact, I act like I am really just pulling my digits out of thin air.

Sum = 24727. I then add all of these together. I tell them I had a dream about what number we would collectively come to in this exercise and wrote it down on a piece of paper and I get it out and unfold it. Once they see it matches, they are baffled and are eager to learn how I did it.

Solution: I simply take my original 5-digit number and subtract 2 from the last digit and put it in front of the first. This is because whatever you choose – I will choose digits that add to 9. So, the second set adds to 9999 and the third set adds to 9999 – just shy of 20000, in fact 19998. So, I subtract those two from the end and stick the “2” in the front.

Guest Post: From Anxiety to Curiosity–The Power of Mathematical Puzzles in Your OM Class

Prof. Andrew Stapleton teaches OM at U. Wisconsin-LaCrosse

Many of us have experienced the anxiety some of our students feel whenever we teach OM techniques. I have found a very effective manner to alleviate it by beginning my lectures with Math Magic.

First, start off the semester with the Phone Number. Tell your students to: (1) Grab a calculator; (2) Key in the first three digits of their phone number (NOT the area code); (3) Multiply by 80; (4) Add 1; (5) Multiply by 250; (6) Add the last four digits of the phone number; (7) Add the last four digits of their phone number again; (8) Subtract 250; (9) Divide by 2. Recognize the number?
Here is why it works:
X = first three digits of your phone number
Y = last four digits of your phone number = [250(80x+1) + (2y-250)]/2 = [20000x + 250 +2y -250]/2 = [20000x + 2y]/2 = 1000x + y = your phone number (this trick doesn’t work if the first digit of the last four is a zero).

Hers is another one: The Rope Around the World. Imagine an un-stretchable rope wrapped completely around the Earth at the equator. Imagine the Earth is as smooth as a cue ball. Here is the question: If you lift that rope exactly one foot above the earth’s surface (ignoring gravity), going all the way around the planet, how much extra rope will you need? The answer is amazing. Students may think they need to Google the diameter of the Earth to figure this one out. Surprisingly, you don’t need to know the Earth’s diameter or radius. You only need to know the formula for the circumference of a circle, i.e., Circumference = 2πr, where the value of π is approximately 3.14 and r stands for the radius.

Answer: You realize you can plug in that extra foot into the circumference formula. When the rope was wrapped around the Earth at the surface, you just have 2πr. When you add in the extra foot, it extends the radius of the Earth by one foot, so you now have 2π(r+1). If you want to find out the difference between the lengths of the two ropes, you subtract the shorter rope on the Earth’s surface from the longer rope suspended one foot above the Earth. 2π(r+1) – 2πr or 2πr + 2π – 2πr = 2π. The two circumferences in the equation cancel out, which leaves just the 2π. Really? It’s true! The rope that is suspended a foot higher all the way around our planet only needs to be 2π or 6.28 feet longer than the rope lying flat on the Earth’s surface.

Challenges like these take help take students’ minds off anxiety they may have felt when we go over a new OM model, making them more receptive to learning a new technique.

Teaching Tip: The Auto Design Life Cycle

In both Chapters 2 and 5 we discuss product life cycle and its strategic importance. In Figure 2.5 (page 40), we identify ten products that are passing through the 4 stages of Introduction, Growth, Maturity and Decline.

Here is an 11th example you can use in class –automobiles–whose changes you can follow through these stages. We start with the 1950’s land yachts like the Cadillac Eldorado. This was followed by the 1960’s station wagons. Socioeconomic shifts drove Americans’ move out of gas-guzzling embellished cars and into tiny, economical Japanese imports following the oil crises and new tailpipe emissions standards of the 1970s. Then came the 1980s minivan (which almost totally replaced station wagons). In the 2000s, the sport-utility vehicle spurred the minivan’s retreat.

The SUV has devoured the American car market, now accounting for nearly 60% of new vehicles purchased. Stricter vehicle-efficiency standards and governments’ push toward electrification challenge the supremacy of the blunt, heavy SUV. And car designers are tired of drawing them. “We all get bored to death because it’s absolutely ubiquitous,” says GM’s lead designer in The Wall Street Journal (June 13, 2024).

The Zoox electric self-driving urban ‘Toaster.’

The ever-expanding options, along with higher interest rates, are pricing younger and lower-income consumers out of the market. The average new-car price is now nearly $50,000. This has automotive designers, executives and analysts focused on a big question: What comes after the SUV? Will the boxy SUV be followed by even boxier forms?

Electric vehicles have no need for hoods, as their batteries are typically mounted in the floor, and their motors are near the wheels. With no drivers, upcoming autonomous vehicles won’t need dashboards or steering wheels. Executives think that maximizing human and cargo space in such vehicles results in a rounded box on wheels: a nouveau vanlike form nicknamed “the Toaster.” GM research has shown that this spacious shape can provide passengers in autonomous vehicles more confidence in surrendering control. “It’s more distance between you and a potential accident. The shape also has a “functional, happy character,” adds GM’s designer.

Teaching Tip: Is Amazon Benchmarking–or Cheating?

At the end of each chapter of our text, we present an Ethical Dilemma for class discussion. The Wall Street Journal‘s expose on Amazon (April 19, 2024), called “Inside Amazon’s Secret Operation,” provides one such issue. Here is a summary:

For nearly a decade, workers in a warehouse in Seattle have shipped boxes of shoes, beach chairs, Marvel T-shirts and other items to online retail customers across the U.S. The operation, called Big River Services, sells around $1 million a year of goods through e-commerce marketplaces including eBay, Shopify, Walmart and Amazon under made up brand names. “We are entrepreneurs, thinkers, marketers and creators,” Big River says on its website.

Big River’s website says it sells on Amazon’s marketplace but doesn’t mention anywhere that it is part of Amazon. It also misspells Seattle.

What the website doesn’t say is that Big River is an arm of Amazon that secretly gathers intelligence on its competitors. Amazon publicly says that it pays little attention to competitors, instead focusing all its energies on being “customer obsessed.”

But Big River team members attended their rivals’ seller conferences and met with competitors, identifying themselves only as employees of Big River, instead of disclosing that they worked for Amazon. They were given non-Amazon email addresses to use externally, but internally they used Amazon email addresses. They took extraordinary measures to keep the project secret, disseminating their reports to Amazon execs using printed, numbered copies rather than email. In the event of a leak they were told to say they were formed to improve the seller experience on Amazon, and that such research is normal.

“Amazon, like many other retailers, has benchmarking and customer experience teams that conduct research into the experiences of customers, including our selling partners,” says the firm. This benchmarking team got top corporate approval to buy inventory, use a shell company and find warehouses in the U.S., Germany, England, India and Japan so they could pose as sellers on competitors’ websites. To get information about rival logistics services, Big River stored inventory with companies including FedEx, UPS, and DHL.

Virtually all companies research their competitors, reading public documents for information, buying their products or shopping their stores. But lawyers say there is a difference between such corporate intelligence gathering of publicly available information, and what is known as corporate or industrial espionage. Companies that misrepresent themselves to competitors to gain proprietary information are open to suits on trade secret misappropriation.

Classroom discussion questions:

What are the ethical implications of Amazon’s actions?
How would such benchmarking be legal?