Video Tips – Page 5 – The OM Blog by Heizer, Render, & Munson

Video Tip: Bringing 3-D Printing to Life in the Classroom

Computer Aided Design (CAD) and 3-D Printing may not be the most exciting topics in the Design of Goods and Services chapter (Ch.5), but after you show this 4-minute video clip, there will be a definite uptick in class discussion. Our photo of a 3-D printer just can’t do justice to the amazing work going on in this rapidly advancing area of OM. So when Prof. Bruce Elwell showed me the video we link to here, I knew it’s something important to share in the blog.

I recommend that you bring a crescent wrench with you to class to bring home the product and its design. Pass it around while the video plays so your students can get a better feel for the tool. And if you would like more background on 3-D printers, take a look at the blog we did on the subject a few months ago. It was based on a major article in The Economist in Feb., 2011.

Video Tip: Why the US Needs Innovation and High Tech Manufacturing

If you want to show a 6 minute video that will set your semester on fire, try this interview with Henry Nothhaft, author of Great Again and former CEO of Tessera. Nothhaft starts by saying the only way the US can recover from the recession is to deal with the 5 million manufacturing jobs lost in the past decade. He believes we can bring back high-tech manufacturing with some basic tax and policy changes.

The US has the world’s 2nd highest corporate tax rate in the world (and California is the 48th worst in the US). Good tax policies are the reason Israel and Germany have had a revitalization of their manufacturing bases. And offshoring in high-tech is unnecessary when labor costs are only 3% of total product cost. Nothhaft points out that 70% of high-tech innovation goes on during production on the factory floor. Give up the factory and in 10-15 years “you have sown your own seeds of destruction”.

Nothhaft also takes on the US Patent Office and its 3.7 year average approval wait time. He points out that in Silicon Valley this is two or three product life cycles—an immeasurable delay. And finally, he asks for a new green card policy for foreign grads in technology areas. “We need to hang out a sign by the Statue of Liberty that says Geniuses Welcome“, he says, noting that the founders of Intel, Google, ebay, and Yahoo! were all immigrants.

Video Tip: Forecasting at Hard Rock Cafe

It’s hard to motivate students about how important forecasting is in OM with common examples like IBM’s stock price, Dell sales, or housing starts. So in Ch.4 we have two tools to help set the stage. The first is the Global Company Profile featuring Disney World. Disney does detailed daily, weekly, monthly, annual, and 5-year forecasts of park attendance, with a staff of 35 analyzing a whole flock of interesting variables. The second tool is the 8-min. video case study we created on how Hard Rock Cafe uses forecasting.

Students like the Hard Rock video not only because the company is “cool”, but because the applications of moving averages and regression are clever and thoughtful. For example, multiple regression is used to estimate the price elasticity of each menu item. Hard Rock is able to estimate the impact of a $1 price increase of cheeseburgers on sales of chicken sandwiches and margaritas.

The weighted moving average technique is used to set sales and bonus targets for store managers. The company also uses exponential smoothing and other models to forecast daily sales/food needs, purchasing needs, and borrowing needs. A good lead-in to the video is to ask students what they think Hard Rock needs to forecast with mathematical models.

Video Tip: Darden Restaurant’s Quality “From Farm to Fork”

What I really like about this 12 min. video on Darden Restaurants (Olive Garden and Red Lobster) is that the VP-Quality comes right out and says “we use SPC charts, Pareto charts, process flow diagrams, fishbone charts, and scatter charts”. When you are teaching Ch. 6 and Supp. 6, it’s good for your students to hear that a real company is employing all the tools they see in the text (as in Figure 6.6).

Darden calls its quality program “From Farm to Fork”, since the inspection process begins at the food source (be it farm or pond), continues with inspections throughout the supply chain, and ends with a final check by the chef and server before the customer is served. Fifty scientists and health specialists work in QA throughout the world, most close to the food source outside the US. With 50 million pounds of seafood coming into the US for Darden each year, it is clear that quality cannot be considered just at the end of the supply chain.

The video presents real data in the form of x-bar and R-charts and capability histograms and shows what happens when specs are not met on products like steaks, salmon fillets, and chicken breasts.

Before showing the film, you may want to ask students where they think inspections are taking place on a fish that is caught in Thailand and served 48 hours later in say, Dubuque, Iowa.

Video Tip: Scheduling Employees at Hard Rock Cafe

One of my favorite videos is a short (4.5 min.) study of how Hard Rock Cafe schedules its 160 servers at the giant 1,100 seat Hard Rock here in Orlando. I show it when I teach scheduling (Ch.15) and linear programming (Mod.B in the hard cover text). The topic is one many students relate to, especially if they have worked in retail or restaurants, where schedules are always a sensitive subject.

In Hard Rock’s case, the sales forecast is critical. Many factors are considered in deciding how many servers to call in, including historical sales, major conferences in town, season, etc. Each employee submits a weekly request form, and then an LP package takes over, with the objective of minimizing the number of employees per shift. It turns out that the system works quite well and employees are usually satisfied. Turnover, even during non-recession times, is 1/2 the industry average.

What we don’t mention in the video is that the managers never mastered the scheduling software, which is actually somewhat complex. But one, very enterprising, young server offered to handle the weekly task on his own. He collects all the forms, goes down into a basement office every Saturday, where it takes him about 6 hours to input the data and churn out the schedules. He does this for no additional pay! Why, you ask? Because constraints and schedules are set by seniority, and he is allowed to assign himself the highest priority, a 9. It turns out that a great schedule, at the right work stations, can make the difference of $100’s a week in tips.

This topic is one that students with jobs are more than happy to discuss..

Video Tip: Layout of the New Arnold Palmer Hospital

Jay and I have created two videos to accompany Ch.9 (Layout Strategies) : the first an assembly line analysis at Wheeled Coach (the ambulance manufacturer) and the second the design of a radical new building for the Arnold Palmer Hospital. The hospital layout was really exciting because we became involved in the project and filmed it from start to finish.

Instead of the traditional “racetrack” design (long hallways with a central nursing station on each floor), when the hospital added the new building a circular “pod” system was designed. The whole idea was to cut down the walking time of the hospital’s most precious scarce resource: nurses. The average nurse (about 45 years old) was hiking 2.7 miles a day up and down the hallways to the central station.

The layout design process lasted over a year. Over 1,000 meetings of doctors, nurses, and patients turned into drawings and then into “test” layouts. The hospital rented a warehouse a mile away and created full-sized mockups of every type of room. When we toured, we were encouraged to comment on every aspect of the layout, from placement of electrical outlets, to pictures on the walls, to Murphy beds for guests, to bathrooms.

The result was a roundish building with central nursing pods for each cluster of 34 rooms (this is shown in Figure 9.22 in the book). What a change in walking time for nurses: a 20% drop with the new layout!

Nothing is perfect, though. Despite all the thoughtful planning, analysis, and mockups, the last time I visited the new building I found nurses still unhappy about the “local station” pods. They had to go back and forth to the “central station” too frequently because everything needed was not at the local pods near the patient rooms. Layout is indeed part art, part science.

Video Tip: Darden’s Global Supply Chains

Because supply chains (Ch.11) are such an important topic in OM, we have produced 3 video cases on the topic: Arnold Palmer Hospital’s Supply Chain, SCM at Regal Marine, and Darden’s Global Supply Chain. Since I am a regular at Olive Garden (one of Darden’s main brands), filming this 8-min. video was of personal interest.

How is it that I can order fresh fish–not frozen–here in Winter Park, FL, and be eating seafood that was caught off the coast of Thailand less than 48 hours ago? And the same for you at any of the 1,500 restaurants in the Darden family. That’s some supply chain!

Actually Darden has 4 independent supply chains it runs, of which its Seafood Network is one. There is also: the Central Distribution SC for non-food items (housed in Orlando); its Independent SC for locally purchased items such as produce and dairy products; and its Direct Distribution System, which uses 3rd party logistics, for other items.

Interviews with Darden’s Senior VP for Supply Management and Purchasing illustrate how critical this function is to every aspect of running a restaurant chain. It also raises the question about the complexity of maintaining 4 distinct supply chains. Should local managers be allowed to make their own purchases? How does a major chain deal with seafood shortages (“overfishing”) that occur more regularly?

More details about the seafood aspects of the supply chain are in our Supp.11 video case, “Outsourcing Offshore at Darden”.

Video Tip: Inventory at Frito-Lay

If you cover the subject of Inventory Control (Ch.12), you may want to show the (8 min.) video, “Managing Inventory at Frito-Lay”. There aren’t too many more interesting products that students can relate to than potato chips…and this video goes from the farm to the truck to the plant to the truck to the store…in showing the production process. What makes it really exciting is that the whole journey often takes less than one day! We follow the inventory from the time the potatoes (12 semi-trailers full each day, at 50,000 pounds of potatoes per trailer) are loaded at a farm near each plant, unloaded, washed , sliced, seasoned, baked, bagged, boxed, loaded for delivery, shipped to supermarkets, and put on a shelf. It’s a real eye-opener to see how fresh the product at the store can be.

It’s also important for students to see that there are 4 types of inventory at Frito-Lay (and, of course, at other firms): raw materials (the potatoes, seasonings, packaging material, etc.), work-in-process, finished chips in a bag, and MRO. This may be an unusual product, in that a major raw material decays quickly, but the importance of inventory turns, W-I-P levels, and smooth production flow are all illustrated in this company’s excellent inventory management.

Jay and I really enjoyed filming this Frito-Lay series (our most recent featured company) and you will see why when you view the closing scene, filmed in my driveway. The company lent us a truck to use for the day and loaded it with hundreds of bags of chips of all brands. At the end of the day of filming our closing comments, we assumed we had to not only return the truck, but the massive quantity of chips as well. But we got to keep them! Since Jay couldn’t carry many back to Texas, we Renders ate chips for months….a big exception to my wife’s organic/healthy food house rules.

Video Tip: Hard Rock’s Human Resource Strategy

Filming the whole series of 7 Hard Rock videos was a really interesting experience. First, it is such an unusual company–the 8th most-recognized brand name in the world: with food ostensibly as its product–but in reality it is an experience-based product of rock n’ roll, memorabilia, exciting/unusual staff, popular gifts, and finally the meal.

What was the biggest eye opener, though, was not seeing one employee–from CEO on down–ever dressed in coat and tie. And that is what makes this particular video fun to show in class (as part of Ch.10, or just to close out the semester). What other company (prior to the recession, of course) had minimal turnover, allowed employees to have pink hair, body piercings galore, and multiple tatoos? And who else offers every employee a Rolex watch to celebrate their 10 year anniversary? What a strange contrast to the so clean-cut image of our other major employer in Orlando, namely Disneyworld!

This video is very reassuring to undergrads who see themselves as non-conformist, and hope there is some place in the wide world of business in which they can make a home. It is easy to generate good classroom discussion with students who have had work experience in normal restaurants, sharing impressions of the differences.

Video Tip: Capacity Planning at Arnold Palmer Hospital

This is the 3rd blog I am making about the series of 7 Arnold Palmer Hospital video cases we filmed a few years ago. The 1st two were: The Quality of Culture (10/13/10) and Flowcharting Processes (11/2/10). If you plan to teach either Supp. 7, Capacity and Constraint Management, or Chapter 4, Forecasting, you may want to show this third film (8.5 min.) and assign the accompanying case study.

I like this video because there just aren’t many videos available on the subject and because this is such an interesting scenario. When the hospital decided to expand some years ago, it had already far exceeded its capacity. It had tried everything to increase throughput, including moving certain surgical procedures to a sister facility a mile away, having staff drive patients home as soon as they were ready for discharge….anything to free up a bed in a more timely manner.

When all else failed, the new building plan was put in place, but the issue of capacity planning continued. This time it was whether to build for forecast demand, or actual demand. Using Figure S7.6, the hospital used a lead stategy which allowed for major portions of the new building to be left in concrete shell form until a build-out was needed.

Although annual births had been on a constant increase for 15 some years, this turned out to be a good choice for capacity planning. As you may know, the economy in Central Florida (Orlando) has absolutely tanked, with less newcomers, and less births, in the area than was ever expected.

I usually present this video case when I teach Forecasting, as it presents an excellent integration of the topics of trend projection/regression analysis and capacity.

Video Tip: Flowcharting at Arnold Palmer Hospital

Many of our colleagues think flowcharting is an invaluable tools we should be teaching in OM. I agree, and every semester I show the video Process Analysis at Arnold Palmer Hospital (7 min.).

APH believes that if a process takes place more than one time, it should be documented and flowcharted. There is even a staffer shown in the film, Diane Bowles, with the job title “Clinical Practice Improvement Consultant”, whose full-time work is charting scores of processes.

After I show the video in class, I assign small teams to flowchart the process of maternity patients moving through the hospital (see the video case at the end of Chapter 7). The Solutions Manual shows one possible chart. When you show the video, ask the students about the pre-registration function, how it can be used to streamline the operation, and why pregnant women benefit from it.

The key is that continuous improvement helps both patient and hospital function/efficiency.

Video Tip: Green Manufacturing and Sustainability at Frito-Lay

As a Math/Physics undergrad in the late 60s, I somehow took an elective course called FORTRAN. This turned out to be quite a break, as McDonnell Douglas hired me to design jets based on this one, well-timed class. At a time when very few people knew much about computers, this was a great edge.

I think today’s “great edge” is Sustainability. Hundreds of college are offering courses in the subject now, but it is still in its infancy, with a huge demand building in the coming years for knowledgable grads. Johns Hopkins U. has just started the nation’s 1st B.S. in Sustainability.

With this background, I encourage you to show our newest video, “Green Manufacturing and Sustainability at Frito-Lay”, when you cover Supplement 5, Sustainability. Frito-Lay is a leader in solar, “going green”, moving off the power grid, and conservation/recycling resources. Its Sun Chips, for example, are produced under full solar power. The firm has received the LEED (Leadership in Energy and Environmental Design) award and has “zero environmental impact” as a long- term goal. Will this help sell potato chips? Can only multi-billion dollar firms step up like Frito-Lay is doing?

Jay and I are especially proud of this video as it won the prestigious Silver Addy as best educational film in 2010. We hope you and your students enjoy the film and the case study in Supp.5.

Video Tip: Assembly Lines at Wheeled Coach Ambulance

Wheeled Coach , the world’s largest manufacturer of ambulances, is the kind of firm you would want to take your students to tour to see how factories work. The firm uses 5 parallel assembly lines, fed by work cells, in which 5 ambulances move forward to the next work station each day. The work cells feed the main assembly lines on a JIT basis and perform all the pre-assembly work, such as painting, carpentry, upholstery, electrical wiring , etc.

When I show the video (7 min.) in class, I simultaneously draw the 5 parallel lines, and label in each day’s work station as it is described. You can discuss how the work cells are more efficient than having the tasks they perform done as part of the line.

Some interesting aspects are not shown. First, these are real factory jobs, often dirty, non-union, low paying, and all hot! (There is no A/C –or heat– in most factories here in Florida). So staffing is usually difficult (this recession being an exception, of course).

When we filmed, workers did 5 standard 8-hours shifts, starting 6:30am. When hiring was really tough, Wheeled Coach switched to four 10-hour days to make the job more attractive. That made line balancing even more difficult, since each vehicle still needed to move forward once a day. It took a few years before the firm realized this only made matters worse, as quality fell dramatically in the last 2-3 hours of the shift. It returned to the 5 day week recently.

How else could efficiency improve? Last time I visited, the smaller “van conversion” models were moved to a different building on their own line, with 3 or 4 flowing off every day, since they are much simpler designs.

Video Tip: Arnold Palmer Hospital’s Culture of Quality

A few weeks ago, I visited my neighbor Artie while he was in the hospital. It was a typical large facility, with long hallways, nice private rooms…some of which had great views of the lake. But when I entered his room, the first thing I noticed was that the trash can was not only filled, it was overflowing! As I left, I stopped at the nurses’ station to report this “defect”. The response: “Maybe you should call management to let them know”.

I can say that at Arnold Palmer Hospital for Women and Children (APH) this would never have happened. When you show this 10 minute video in class, you will see why. The culture of quality is ingrained deep at APH.

Let me give you a little off-the -record background about our filming experience, which was a fantastic learning exercise that resulted in 7 APH video cases in the text. I first sat through the new employee orientation period. One of the 1st cultures I learned was that hospital employees always keep a positive face in all public spaces. No one may be heard talking about how bad their day is, problems at home, or troubling patients. The hospital has private staff corridors that parallel the public ones. Only there can staff speak openly. Second, all top administrators at APH are former nurses, who worked their way up. Kathy Swanson, the director, has an MBA, and others also have business training. I believe they have a culture of caring about patients above all else. Note in the film how they each take calls from patients 24/7.

We have 2 videos dealing with service TQM in Ch.6, the other being Quality at the Ritz-Carlton Hotel (7.5 min.). I prefer to show the APH film because the hospital incorporates several Ritz concepts, including empowering any staff member (even janitors) to hand up to $200 in gift cards to any patient with a complaint. My friend Artie could have gotten rich if his hospital had such an attitude!

Jay and I are especially proud of this APH video as it took 1st place in the annual Addy video competition in 2005. Out of 13,000 entries, it won the highest award, the Silver Telly.

OM in the News(and Video): Ford’s Lean Auto Plant in Brazil

Ford’s most progressive plant in the world may well be in northeast Brazil, where it uses lean manufacturing, sophisticated supply chains, and a vast array of robotics to produce the EcoSport SUV and Fiesta. A colleague in that country, who is using the Portuguese edition of our text, just emailed me the link to a video about which he is justifiably proud. This 3.5 minute video illustrates all 3 concepts: lean, SCM, and automation and makes a nice presentation in Ch11 or Ch.16. (I do need to warn you that the last few seconds are a bit anti-union).

In 2009, the Ford plant produced over 207,000 vehicles. This South American operation brings so much profit to the parent company in Dearborn,Michigan,that the firm was able to turn down federal loans in 2009 that both GM and Chrysler accepted.

Brazil is becoming a leader in lean auto making, with another plant churning out VWs with a similar layout in which suppliers produce, on-site, with their own employees, the parts that are installed in the final vehicle. If you look at the Global Company Profile that opens Ch.16 in our text, you will see a layout at the Toyota Tundra plant in San Antonio, Texas that also resembles what we see in the video.

Discussion Questions:

1. Why is it doubtful that this Ford plant will be replicated in the US?

2. How does the supply chain differ from most US plants?

3. Why is this an example of lean manufaturing?