new product developmemt – The OM Blog by Heizer, Render, & Munson

OM in the News: Taco Bell Uses OM to Know What You Want to Eat at 2 a.m.

Taco Bell is considered the GOAT of new product ideas, testing hundreds to develop viral hits like Doritos Locos Tacos and Baja Blast, writes The Wall Street Journal (Nov.22-23, 2025). Its product development team (see Figure 5.3 in your Heizer/Render/Munson text) systematically generates, tests, and implements new menu items, focusing on limited-time offerings (LTOs) that keep the brand relevant and appealing. And as we point out in Figure 5.1, the higher the percentage of sales from new products, the more successful the firm.

Here is how it works at Taco Bell’s New Product Development Team:

New products are engineered to use ingredients and equipment already available in restaurants, minimizing the need for additional resources and reducing training time for staff. This approach ensures that operational changes are minimal and that new items can be introduced without disrupting established workflows.

2. Using rapid testing, hundreds of concepts are evaluated annually, but only those that meet operational standards and customer demand advance to market testing. This ensures that only efficient, scalable items reach the menu.

3. Most new items are offered for 4-6 weeks, allowing for frequent menu refreshes without overburdening operations or inventory management. This strategy keeps the menu dynamic and enables the company to respond quickly to changing consumer preferences.

4. LTOs are crafted for quick and consistent assembly, supporting high throughput and maintaining quality across all locations. Operational teams are trained to execute new items efficiently, ensuring that service standards are upheld even during periods of high demand.

5. New menu innovations are developed with profitability in mind, leveraging cost-effective ingredients. This focus supports growth and helps Taco Bell remain competitive in its sector.

6. The company tracks same-store sales and operational metrics, enabling it to identify opportunities for improvement and maintain operational excellence.

7. The product development team operates in a collaborative environment. Leadership encourages experimentation.

8. Operational decisions are informed by market research and consumer feedback, ensuring that new products align with customer preferences and operational capabilities.

Taco Bell’s operational strategy enables efficient product innovation, rapid deployment, and consistent execution, supporting both profitability and sustained market leadership in the fast-food industry.

Classroom discussion questions:

What items at McDonald’s and Starbucks are LTOs?
Why is Figure 5.1 so important?

OM Podcast #42: An Interview with the Founders of Canada’s Simpla Foods

We’re back with another inspiring episode of the Heizer/ Render/ Munson OM Podcast. In this episode, Barry Render sits down with Canadian entrepreneurs Katie Wookey and Ari Davis, co-founders of Simpla Foods, a plant-based yogurt company that’s redefining sustainability and supply chain innovation in the food industry.

Barry explores how Katie and Ari turned a personal health journey into a thriving business now sold in over 300 stores across Canada. The couple shares their experience with co-packing and contract manufacturing, explaining how outsourcing production has allowed them to scale efficiently while staying focused on product development and sustainability.

Heizer Render Munson OM Podcast · OM Podcast #42: An Interview with Simpla Foods

Transcript

Have you subscribed to this podcast on Apple Podcasts? Just open your Apple Podcasts app, search “Heizer Render Munson OM Podcast,” and subscribe to get all our episodes delivered straight to your device!

OM in the News: Airbus’s “Airplane of the Future” Struggles

Designing a new product (see Chapter 5) is never easy and corporate history is full of great products that flopped—Betamax, Commodore’s Amiga computer, the Ford Edsel, and Aston Martin’s 1974 Lagonda car. For the Airbus A220 commercial jet, avoiding a similar fate seems like a constant struggle.

Here are my observations from an insider’s perspective. My first job out of college was as a “loft lines” engineer at McDonnell Douglas (now Boeing), designing the wing of the DC-10 jumbo jet, a plane that failed badly (but the wing never fell off!). From there I went to GE to work on design of the CF6-6 engine, designed to power the DC-10. The reality is that creating a jet engine is as complex as creating a new jet. Still, what is happening to the Pratt & Whitney PW1500G engines for the A220, is troubling.

The durability problems affecting A220 engines have hit this aircraft hard, forcing airlines to cancel flights and ground crews. PW1500G’s were supposed to last 20,000 flight cycles, but are being sent to the shop at 5,000. Some are being sent in before 600 cycles. About 15% of global A220s are grounded.

The A220 should be the pride and joy of the aerospace industry, writes The Wall Street Journal (Sept. 11, 2024). It is the only “clean-sheet” single-aisle plane built in recent years—the A320 and Boeing 737 designs go back to 1986 and 1966, respectively. When it entered service in 2016, it sported a lightweight airframe full of composite materials, large windows and a redesigned cockpit. It reduced fuel burn per seat by 25% and became beloved by pilots and passengers alike.

But now, cancellations are outpacing orders. EgyptAir, which flies in a hot and dusty region harsh on aircraft, got rid of its 12 A220s earlier this year. Cyprus Airways added two brand-new A220s, only to see both of them affected by engine troubles. Its CEO said the jet shouldn’t be sold until the problems are solved.

Scarcity of parts and lengthy repair-shop waiting lists mean that there is no quick fix. Some of the overhauls to the A220’s engines are particularly lengthy: A whole-new combustor design won’t be rolled out until 2027. And recent experience has taught airlines to distrust timelines. The headache for Airbus is that it needs to reach and sustain a production rate of 14 A220s a month in order to break even on them, up from 6 currently.

Classroom discussion questions:

Which other commercial jets have suffered major setbacks in the past decades?
In what ways is this an OM issue?

Good OM Reading: “Invention-A Life,” by James Dyson

James Dyson wasn’t much of a student at an English boarding school. Yet he would become the founder of a $7 billion global manufacturing empire. Dyson gained fame as the inventor of a revolutionary vacuum cleaner that exploits the principle of the cyclone and never needs a replacement bag.

In Invention–A Life, he tells of the devastating experience of losing patent rights and being ousted from the company he had founded to manufacture his first notable invention- the “Ballbarrow”( a wheelbarrow that had a big red ball in the front instead of a wheel}. Although this venture ended in failure, the experience helped him succeeding in his bigger quest—the development of the vacuum cleaner.

DC01: The first Dyson vacuum rolled off the production line in 1993

Over a 4-year period, Dyson made 5,127 prototypes of the vacuum cleaner that would transform the way houses are cleaned. He risked all his resources, but out of many failures came success. His products—including vacuum cleaners, hair dryers, and fans and purifiers—are not only revolutionary technologies, but design classics– a legacy of his time studying at the Royal College of Art in the 1960s.

The first dual cyclone bagless vacuum cleaner (the model DC01) was sold initially through mail-order catalogs. It achieved bestseller status in spite of its unconventional features of being yellow; having an exposed, transparent and reusable plastic dust collection chamber in lieu of the traditional concealed disposable bag; and having a price tag several times that of a basic Hoover. After sales clerks and customers had the chance to witness Dyson’s machine pick up the dust conventional vacuum cleaners left behind, however, sales took off. His instincts were correct about how new features would triumph over traditional ones.

Dyson dramatically tells how his own company became one of the most inventive technology firms in the world, always looking to the future. He discusses the continuing obstacles—financial, political, regulatory, sociological, cultural—that frustrated his attempts to expand his manufacturing enterprises within the United Kingdom. This challenge drove him to move the bulk of his business to Singapore.

Dyson writes his success is due to “perseverance, taking risks and having a willingness to fail.” Inventors rarely have ‘eureka’ moments. Developing an idea and making it work takes time and patience. We fail every day. Failure is the best medicine—as long as you learn something.”

This is a great story to note when you teach Chapter 5, Design of Goods and Services.

OM in the News: More AI From the Start Up Nation

This past week, The Wall Street Journal ran three separate articles on more high-tech research coming out of Israel. These complement the blogs we have earlier done on Israeli firms producing 3-D printed hearts (April 23, 2019), warehouse robotics (Nov. 12, 2020), computer vision systems (Nov. 21, 2018), and 3-D printed steaks (Feb. 2, 2019). Here are the latest:

First, about 7.5 million people in the U.S. have trouble using their voices. So Amazon other AI tech providers is working on tools to enable voice-activated digital assistants to understand users with a stutter and other speech impairments. Amazon’s Alexa integration, with software developed by Israeli startup Voiceitt, lets people with speech impairments train an algorithm to recognize their own unique vocal patterns (WSJ, Feb, 24, 2021). Training voice assistants to respond to people with speech disabilities could improve the experience of voice-recognition tools for a growing group of potential users, such as seniors, who are more prone to degenerative diseases.

Second, Israel’s ALYN Hospital is developing a wheelchair-mounted robot arm powered by AI chips designed to mimic the way the human brain works, a technology known as neuromorphic computing. (WSJ, Feb. 24, 2021). Neuromorphic software is programmed to learn about the surrounding environment and adapt to it in real time, enabling the system to automatically adjust the arm’s trajectory and force for precise tasks, such as delicately bringing a cup of water to a user’s mouth. The models learn similarly to the way human babies learn, by seeing an image or toy once and being able to recognize it forever. The focus is on helping patients with spinal injuries, MS and cerebral palsy.

Finally, we earlier reported that McDonald’s paid $300 million for the Israeli firm Dynamic Yield, in a bid to boost sales at drive-thrus and digital kiosks. With Dynamic Yield’s technology, restaurants can vary their electronic menu boards’ display of items, depending on factors such as the weather—more coffee on cold days and McFlurries on hot days—and the time of day or regional preferences. (WSJ, Feb. 27, 2021). For McDonald’s, it provides personalized offers for customers of its stores.

Classroom discussion questions:

Why does Israel have more high-tech startups than any nation beside the U.S?
Why is AI such an important operations management tool?

OM in the News: Manufacturers Pivot to Fulfill an Urgent Need

Headline after headline, we are seeing a wide array of manufacturers embark on major pivots away from their daily offerings to produce an array of products out of necessity. Ventilators, masks, gowns, shields. As the COVID-19 pandemic continues to creep along, the list of products continues to grow. The pivots these organizations are embarking upon are not easy. They require strengths that do not always see the spotlight including a skilled workforce, diverse supply chain, a culture that thrives when facing adversity and strategic investments in technology, writes IndustryWeek (April 23, 2020).

As one Rockwell Automation exec explains: “This type of shift is possible only when operations have been designed and set up for agility. It is dependent on tools and processes for supply chain planning, availability of materials and people, product lifecycle management, product specifications management, plant configuration flexibility, the flexibility of the manufacturing and equipment, quality control regimens, and tracking and tracing components the product is made up of.” With any new product comes new processes, a heightened importance for these processes to be closely followed, and the need to quickly adapt and scale best practices.

Here are 3 examples of successful pivots: At Naturepedic, expert sewers, together with 3D printing technology, allowed the firm to quickly pivot and produce face masks from organic cotton fabric that was used in the manufacturing of organic mattresses. Abundant 3D printers allowed CMD to pivot from plastic bag production to make the parts for face shields. Previous product development in healthcare gave Vecna Technologies a strong foundation in product development, rapid prototyping, and responsiveness to healthcare needs to quickly produce a ventilator.

Classroom discussion questions:

How has the pandemic altered the product development stages in Figure 5.3 of your Heizer/Render/Munson text?
How is 3D printing becoming an important OM tool?

OM in the News: In Tech Years, 2010 Was Eons Ago

Abbott Lab’s flash glucose monitoring device.

Now that was a decade! Ten years ago we wore analog watches, had landline phones, hung out in bookstores, and even hailed taxis, we are reminded by The Wall Street Journal (Dec. 30, 2019). Ah, the good old days. (Mind you, TV remote controls are only a few decades older).

In 2009 Apple started selling the iPhone 3GS. For $199, it had a 3½-inch screen with a 480-by-320 display—less than half the resolution of a 20th-century TV set. The hot feature was a “built-in digital compass.” In 2019 the $999 iPhone 11 Pro has a 5.8-inch screen and a 2,436-by-1,125 display. It features 30,000 infrared probes that can read your face.

The Boeing 787 Dreamliner, which we feature in the Global Company Profile in Chapter 2, can fly nonstop from just about anywhere to anywhere. Streaming radically changed how cable companies and studios deal with customers. Almost all of Netflix’s growth in streaming movies took place in the past 10 years. The Brookings Institution projects that advances in logistics and food distribution have reduced poverty in most of the world—from 550 million poor outside Africa in 2009 to fewer than 100 million today.

Epitomizing the 2010s is the glucose monitor that reads from a patch with a small sensor stuck under your skin and update a smartphone app. The app also lets caregivers follow patients’ readings, replacing finger pricks, pens and phone calls—all to the benefit of the 30 million Americans who suffer from diabetes.

This decade has proved that progress is relentless. Expect it, even though we should never take it for granted. Property rights, an educated workforce, fair tax codes that enable capital formation, and light-touch regulations are essential ingredients. It’s why the U.S., not China, has driven global innovation (again) in the 2010s.

Classroom discussion questions:

Referring to Figure 2.5 in your Heizer/Render/Munson text, where do you think the following products will be on the product life cycle curve in 2029: iPhone 11, Boeing 787, glucose monitor?
Where will the products shown in that figure be in 2029?

OM in the News: Israeli Startup Races to Roll Out 3D Printed Steaks

The walls of Redefine Meat Ltd.’s lab in Rehovot, Israel, are plastered with posters of cuts of beef, including sirloins, T-bones, and rib-eyes. But the startup isn’t looking to sell the perfect cut of beef. Instead, it wants to create a plant-based facsimile. The company is building a 3D printer that it says will produce a meatless steak that’s so fatty, juicy, and perfectly meaty that even the most dedicated carnivore won’t know the difference. “All meat alternatives today are basically a meat-homogeneous mass,” says Redefine Meat’s CEO. “If you 3D-print it, you can control what’s happening inside the mass to improve the texture and to improve the flavor.”

Redefine Meat says that 3D printing promises to give diners the same sensory experience as eating a real T-bone or rump roast, writes BusinessWeek (Nov. 25, 2019). The technology involves developing a design that can then be printed countless times. First, proprietary computer software creates a detailed model of a steak, including the muscle, fat, and blood, based on whichever cut it’s emulating. That blueprint is then transmitted to a printer loaded with plant-based “inks.” Hit the start button and out comes a “steak.”

While ground-meat replacements are widely available, mimicking an actual cut of meat has proved far more challenging. That’s because replicating the mouthfeel and visual appeal of a juicy sirloin is a lot tougher than cranking out something that’s going to be slapped between a bun. “A beefsteak is the holy grail of plant-based meat,“ says one exec.

The faux-meat category has already reached an estimated $14 billion in annual sales worldwide, and will grow to $140 billion in 2029. Redefine Meat plans to introduce its plant-based steaks to the public in the first quarter of 2020. It will supply customers, including restaurants, meat distributors, and retailers, with both the printers and cartridges. Redefine Meat’s printer can now deliver five 7-ounce steaks in an hour. The company hopes to speed that up to 22 pounds by the end of 2020. That will mean 50 servings an hour, or the equivalent of a cow’s worth of steak a day.

Classroom discussion questions:

What are the OM issues involved in “printing” a steak?
Will this new product be as successful as an Impossible Burger?

OM in the News: Popeyes Runs Out of Chicken?

Popeyes sparked the so-called chicken wars between restaurants this summer when it launched a crispy sandwich– the first time the 47-year-old chain had rolled out a chicken sandwich nationally. The sandwich features filets from small-breasted birds, which tend to be favored by retailers and are in tighter supply than large-size birds. But supplies are low and producers have pre-existing commitments with competitors.

It turns out the chicken-sandwich sales far exceeded the Popeyes’ expectations, reports The Wall Street Journal (Oct. 28, 2019). A viral social-media campaign fueled by snarky exchanges between Popeyes and competitors led to lines out the door at many of its 2,400 U.S. locations. Customers who couldn’t get a sandwich grew angry and desperate. Many owners initially hoped to sell more than 60 sandwiches a day, but some went through 1,000 instead. Popeyes announced at the end of August that it had run out of the sandwich. The company went through a supply intended for 3 months in 14 days!

So Popeyes has spent much of the past 2 months securing suppliers that could meet its specifications for quantity and small-breast size of the item’s poultry. The lengthy amount of time Popeyes is taking in bringing the sandwich back highlights the supply-chain high-wire acts that can go on behind the scenes as restaurants try to move quickly to meet consumer tastes, and how forecasting and reality can diverge wildly even after 2 years of testing a new product. Competitors, hoping to satisfy the craving, have stepped in, with McDonald’s testing a new spicy chicken sandwich last month. Getting ready for its relaunch next month, Popeyes franchises have been hiring staff.

Supply crunches have hit other chains testing new menu items. Chipotle warned last week that it would likely run out of its new carne asada steak offering as early as next month after demand exceeded expectations.

Classroom discussion questions:

What supply chain mistakes did Popeyes make?
What forecasting techniques (see Ch. 4) could Popeyes have used for this new product?

OM in the News: G.E.’s Long History of Innovation

A 1910 washing machine with a G.E. motor

G.E.’s rare change in leadership this week (from Jeff Immelt to John Flannery) brings to mind my own years of working at that firm’s jet engine division in Cincinnati many years ago. Long a leader in new product development and innovation (Chapter 5), The New York Times (June 13, 2017) provides just a few of the company’s notable products and periods:

1879 Incandescent Electric Lamp. Working at his laboratory in Menlo Park, N.J., cofounder Thomas Edison created an incandescent light bulb that burned for more than 40 hours. Sixty years later, G.E. created new fluorescent lamps. In 2010, the company released LED bulbs that required 77% less energy and would last for 22 years.

1882 The Age of Electric Power. The nation’s first commercial power station generated electricity for 59 customers in Manhattan. To win over skeptics, the electricity was free for the first 3 months.

1893 Electric Locomotive. The company developed a 30-ton electric locomotive that could reach 30 miles per hour without the use of steam power.

1896 X-Ray machine. A year after X-rays were first discovered, the firm created an X-ray tube.

1906 Voice Radio Broadcast. A high-frequency alternator made possible the first voice radio broadcast. Before that time, radio had been operated as a series of dots and dashes transmitted by telegraph.

1912 Vacuum Tubes. The company came up with a glass-encased vacuum through which an electrical current could flow. G.E.’s tube could transmit up to 50,000 volts and made possible advances used in radio and X-ray.

1927 First Home Test of a TV. A man enjoyed a cigarette and a ukulele player hummed a song in the first demonstration of TV, broadcast to 3 homes in Schenectady, N.Y.

1941 Commercial Jet Engines. G.E. introduced the most popular jet engine in history, the J-47, capable of working at high altitudes and in low temperatures.

1957 Nuclear Power. The world’s first commercial nuclear power plant was the Shippingport Atomic Power Station near Pittsburgh. The $120 million plant initially supplied 60,000 kw, enough energy for 120,000 people.

1962 Laser Lights. The laser light discovery was an invention used to communicate by light waves. Over the years, the company has used lasers in everything from processing solar panel materials to drilling holes in aircraft blades.

OM in the News: A New Approach to New Products

FirstBuild's microfactory, on the campus of U. of Louisville, features work benches, tools, welding equipment, 3-D printers and metal-cutting machinery to turn ideas into initial prototypes — FirstBuild’s microfactory, on the campus of U. of Louisville, features work benches, tools, welding equipment, 3-D printers and metal-cutting machinery to turn ideas into initial prototypes

At FirstBuild’s HQ there’s a sign reminding all who do work at the appliance-development factory that “A prototype is worth a thousand meetings.” It’s an operating tenet for FirstBuild and other companies trying to change the way new products are created (see Chapter 5) by liberating the process from the confines of slow-moving, bureaucratic R&D departments. FirstBuild is set up to mine ideas for GE appliances from amateur inventors, students and appliance users and produce small batches of new products for sale to test their appeal with consumers.

Using a concept known as open innovation, reports The Wall Street Journal (Sept. 19, 2016), companies are learning how to quickly harvest loads of ideas for new products from business partners, suppliers, consumers and their own employees outside of their R&D staffs. At the same time, they’re shrinking the time needed to create prototypes to months from years. “It’s a totally different approach to developing a product,” says Airbus’ VP. “It’s disrupting ourselves in a positive way, challenging the tradition of keeping product development very much to ourselves.”

Open innovation got its start with Silicon Valley tech companies in the early 2000s. Companies trying it say they’ve concluded that the speed and knowledge needed to bring new products to market these days requires them to cast wide nets for know-how. Technology and the knowledge to deploy it are evolving too quickly in many industries for corporate engineering and product-development research staffs to keep up on their own.

Airbus plans to assemble a prototype of a cargo-hauling drone based on the winning design from an open competition this summer that yielded 425 proposals for the unmanned aircraft in 6 weeks. Eight entries came from Airbus employees, but the winner was a Russian engineer from Siberia working on his own. He was awarded $50,000 and will receive royalties if his drone reaches the market.

Classroom discussion questions:

What is the value of open innovation to OM managers?
How does this concept differ from the product development stages in Figure 5.3?

OM in the News: Churning Out Smartphones Like Fast Fashion

Micromax's HQ in Gurgaon, India — Micromax’s HQ in Gurgaon, India

In Chapter 5 (Design of Goods and Services), we discuss the importance of new product development. Industry leaders derive almost 50% of their sales from new products–those created in the past 5 years. But the smartphone market is a world apart–and India’s Micromax, writes The Wall Street Journal (June 5, 2015), sits at the bleeding edge of the global wars.

Early last year, Micromax decided consumers wanted a handset that could be operated in many of the country’s 20-plus official languages. Four months later, it unveiled the $110 Unite, which let users label their apps, type, send messages and interact on social media in 21 different scripts—rather than just English and Hindi, as is common for Indian phones. Many handset companies wouldn’t have released another smartphone for months. But the Unite was one of several handsets Micromax unveiled within weeks of each other, including the $150 Canvas Win, and the $131 Canvas Doodle 3, featuring a 6-inch screen.

While Apple launches only two new iPhone models a year and Xiaomi around four, Micromax shipped more than 30 new smartphones last year ranging in price from $50 to more than $300. The frenetic pace has made Micromax the smartphone equivalent of “fast fashion” chains like Zara or H&M, which refresh their shelves regularly with inexpensive clothes that reflect what is on fashion-show runways. Micromax says it can now take a phone from concept to store shelves in 3 months, 4 times as fast as when it first started. It does this by slapping together off-the-shelf hardware from China, making adjustments to follow fast-moving consumer trends, and shipping out a new model every few weeks. (The average selling price for smartphones world-wide fell to $299 last year versus $427 in 2010.)

Classroom discussion questions:

1. What is Micromax’s product strategy?

2. Why is it important for firms to continually introduce new products?

OM in the News: Honda’s Newest Product Flies

Mounting the engines over the top of the wings reduces the drag in flight

“Honda is finally getting its wings,” writes The Wall Street Journal (May 18, 2015). Some new products, as we discuss in Chapter 5, go from inception to market in months, and some in years. But for Honda, it involved 3 decades of planning and development to deliver one of its most unusual innovations: an ultrafast business jet that carries its engines above its wings. The $4.5 million 7-seat HondaJet is set for delivery to customers mid-2015. For Michimasa Fujino, the 54-year-old CEO of Honda Aircraft, it is the culmination of a decades long fight to make a Honda aircraft in the face of skeptical executives, technical delays and the global recession. His influence touches every aspect of the design, from its curves to the manufacturing process. “This airplane is my art piece,” he states.

The jet gives Honda—which also makes robots, boat motors, and lawn mowers—entree into a new market. But no modern car company has successfully made the transition to building aircraft. Honda is betting that technological advances will trigger new demand from buyers with its lightweight body made of carbon-fiber composites–providing 17% better fuel efficiency than competitors while having the highest speed in its class: 480 miles per hour.

Fujino’s first decade produced a pair of designs, but the breakthrough came in 1996 when he sketched the basics of the plane’s current design on the back of a wall calendar. Inspired by principles in a 1930s aerodynamics textbook, the design mounted jet engines atop the wings to boost cabin space and cut noise. In 1997, Fujino presented the business case to the board with the sketch in hand, receiving approval for a flying prototype. It would take 3 years of persuasion, using simulations and wind tunnels to prove his point. He and 40 employees started building the prototype in 2000 in a hangar in Greensboro, N.C. The prototype flew successfully in 2003. Today, HondaJet’s workforce has grown to 1,300 at its 133-acre N.C. campus, providing easy access to the U.S. and Europe, 80% of its estimated market.

Classroom discussion questions:

1. Why did product development take so long?

2. Provide a brief SWOT analysis of the new product.

OM in the News: Products For Our Future

Audi's virtual cockpit — Audi’s virtual cockpit

Fortune’s special feature called “Shape the Future” (Jan. 1, 2015) names 11 products that will have a huge impact on operations management and on our lives. Here are just four of them:

A Liquid Bandage for Every Pocket. For centuries, direct pressure, stitches, and cauterization were the only tools we had to stop significant bleeding. Now the Band-Aid of the future, a plant-based product called Vetigel, appears to imitate the structure of the living tissue on which it’s placed. In other words, it won’t just keep the blood in—it will help heal the wound too, by accelerating the binding of fibrin, a protein that acts like scaffolding during coagulation, with platelets in the blood. (Next year).

The Smart Car Gets Even Smarter. Nvidia engineers are working to give the next generation of automobiles a brain capable of understanding the world around it. “The car is rapidly going to go from the most stupid electronic device a consumer owns to the most powerful supercomputer a consumer will ever own,” says the company. Their laptop-size module will manage highly autonomous driving features, such as traffic-jam assist, up to speeds of 40 mph. (In Audis in 4½ years).

Here’s an elevator pitch. What if we could rethink the way we travel between floors of a building? ThyssenKrupp’s Multi concept is the most radical industry shift since elevators’ debut in 1854. Instead of cables, magnetic levitation technology helps shuttle people from place to place, allowing for multiple carriages in the same shaft and the ability for carriages to move horizontally, not just vertically. No more lobbies with dozens of doors—shorter wait times, and lower energy consumption. (60-story building debuts in 2016).

Algorithms Buy TV Ads. Television commands $74.5 billion in annual advertising spending, yet the ad-buying in television has largely been unchanged for 7 decades. Now TubeMogul’s programmatic tools automate the buying and selling process, similar to the way algorithms transformed how financial traders buy and sell stocks. Hungry for the highly specific audience information they enjoy on the Internet, ad agencies and brands in particular are eager to make the shift. (2015).

Classroom discussion questions:

1. Why are these developments important to operations management?

2. How can self-driving vehicles be used in industries beyond personal transport?

OM in the News: New Product Design is Choking McDonald’s

“McDonald’s menu may have grown too big to succeed,” writes The Wall Street Journal (Dec.4, 2014). The fast-food giant has added oatmeal, snack wraps and lattes to its offerings in recent years to appeal to a wider swath of customers. But swelling menus have made the company’s kitchen operations increasingly complex. Its McCafé drinks, for example, require a separate station behind the counter equipped with coffee grinders and blenders, causing longer waits. The menu has expanded from 85 items seven years ago to 121 today.

McDonald’s isn’t alone in struggling with the temptation to add too many new products. General Motors expanded its offerings for decades only to kill off its Saturn and Pontiac brands in 2009. The typical U.S. grocery store now stocks up to 50,000 products, up from 15,000 in 1991.

Some products can stall the food-assembly line. The Premium McWrap, a 10-inch flour tortilla is referred to as a “showstopper” behind the counter. “Our kitchen comes to a halt when we get an order for a McWrap,” says one franchisee. It’s supposed to take 60 seconds or less to assemble the ingredients, fold them in the tortilla and squeeze the McWrap into a box. But it usually takes some 85 seconds–too long given McDonald’s goal of getting customers through its drive-throughs in 90 seconds or less. Last year McDonald’s clocked its slowest average speed of service in the past 15-years: 189.49 seconds, more than twice the chain’s goal.

“The totality of the products we’re serving is what’s challenging us,” says another manager. “We’ve recognized that we’ve overtaxed our restaurants and need to take a step back on that.”

Classroom discussion questions:
1. Why does McDonald’s continue to add menu items?

2. Where do you think McDonald’s falls in figure 5.1 on page 156 of the text?