Tag: Productivity

Good OM Reading: The Spread of Industrial Engineering in China…By an American

Most all of us know the story about how Dr. Edwards Deming became the father of quality control in Japan. With their factories and infrastructure destroyed, Deming  helped rebuild post-war Japan into the industrial powerhouse we know. Deming’s reputation is so strong in Japan that the awarding of the annual Deming Prize for quality is broadcast live on TV.

Most of don’t know, however, the story of how China’s productivity revolution began some nine years ago. The improbable tale, written in a fascinating Wall Street Journal article (Nov.6-7,2010), describes Gavriel Salvendy, a 72 year old Hungarian-Israeli-American  professor who is the father of Industrial Engineering in China. Dividing his time  between China’s MIT (Tsinghua University in Beijing) and Purdue, Salvendy tore up the traditional Chinese academic hierarchy. Now more than 200 IE programs have sprung up around China mimicking that at Tsinghua.

I hope you can take 5 minutes to click on the link to the WSJ article and enjoy it as much as I did.

OM in the News: Starbucks’ Lean Teams Slowing Down

I always like to use Starbucks examples in class. Its the kind of “hip” company that students can relate to. Over the past few years , Starbucks has been applying lean manufacturing techniques to study every move its baristas make in order to shave seconds off each order. Chapter 1 in our text has an OM in Action box describing these productivity improvements.

But The Wall Street Journal (Oct.13, 2010)  just reported that Starbucks now wants to reign in its baristas, an act that will result in longer lines and waits.   Baristas are being told to stop making multiple drinks at one time, to steam milk one drink at a time instead of a pitcher at a time, to rinse pitchers after each use, and to use 1 espresso machine instead of 2.

Why would the company do this?  The new methods have “doubled the amount of time it  takes to make some drinks” says one employee. But the company  is concerned  about quality, with customers indicating that Starbucks espresso drinks are just “average”.

It is definitely an interesting class topic to see the lean techniques being reversed and I am sure many students will have a comment about such changes.

Discussion questions:

1. Why would baristas be opposed to slowing down the process?

2. What are some of the lean techniques the company has introduced over the years?

3. What other changes has Starbucks made recently in product and process?

OM in the News: Whirlpool Domestic Expansion

Ref: WSJ, Wednesday, Sept. 1, 2010

 Wednesday’s WSJ reports on Whirlpool’s $300 million  upgrade of domestic manufacturing. Both the Cleveland Tennessee plant and the Clyde Ohio plant are seeing major upgrades.  Whirlpool is aggressively restructuring their North American plants… which includes closing plants in Evansville, Ind., Oxford, Miss. and a Michigan plant.  The Clyde plant  is to reduce time to build a washer by 10% and boost output by more than 10%.   

Also while great concern is continually exhibited in the press about the fact that manufacturing employment continues to decline… as OM profs we need to explain (apparently again and again) that manufacturing production and productivity continues to expand. Manufacturing employment does continue to drop ….

But the US is still the largest manufacturing country in the world with  annual productivity increases on the order of 3.4% since 1950.  

This article open a great discussion:

(1) about Whirlpools 2006 purchase of Maytag (industry consolidations… economies of scale) and

(2) the fact that while a plant in Mexico was considered, Whirlpool is making these expansion in the US.

(3)  You can also ask students by how much manufacturing employment drops each year (the article says .1%) or what percent of the work force is employed in mfg.  (the text says 11.2%, but perhaps lower this year).

(4) What are  the implications if manufacturing employment was not dropping … what if employment had never dropped in agriculture or the number of  telephone operators.