The CEO of University Hospital expressed concern about the financial viability of the hospital's trauma care operations. On the one hand, trauma care was an important part of the hospital's community service mission and, as a teaching hospital, also part of its educational mission. On the other hand, trauma care had been a money-losing proposition for many years, and also had caused disruptions to the hospital's other care-delivery services. The CEO and the chief trauma surgeon (who served as the hospital's director of trauma services) collaborated to rethink physical arrangements and processes to make trauma care more effective at a lower cost. A natural solution, growing out of concepts from organization design and process architecture, would be to reorganize resources and create an area dedicated to trauma care. For those familiar with operations management terminology, potential solutions can be drawn from cellular manufacturing concepts that have been effectively moved into the service sector. The case discussion helps to illustrate that changes in physical configuration cannot, by themselves, ensure success. Students are challenged to consider complementary factors that will support the configuration change, as well as the challenges the hospital might face in implementing and sustaining the reconfigured work unit.

Quadrant Homes, a subsidiary of Fortune 500 Weyerhaeuser Company's Real Estate Division, had gained renown for its lean-oriented business model. Starting with a major overhaul in 1996, Quadrant built a formidable operating system that effectively served the needs of first-time home buyers in the Puget Sound region of Washington State, on the Northwest coast of the U.S. The operating system, built on a solid employee culture of operational excellence, produced partly customized, build-to-order homes using an "even-flow" process that delivered on Quadrant's value proposition, "More House, Less Money." Between 1996 and 2007, customer referrals more than quadrupled, market share expanded ten-fold, net margin per house had tripled, and the company's revenues and profits had soared. Quadrant's fortunes changed dramatically when the housing bust hit the Seattle area in 2007. Risk-averse, first-time home buyers pulled out of the market or gravitated toward foreclosed or distressed properties at bargain prices. Additionally, the preferences of the market had shifted away from Quadrant's rather bland-looking, boxy houses toward more customization and differentiation. In reading and discussing the case, students are challenged to consider what led Quadrant temporarily down the wrong path, and how it can reinvent its value discipline and supporting operating system in light of new insights about customer preferences and economic factors.

The Icelandic government outsourced its testing and metrology functions in 1997, and in 2008 two firms competed for most of the vehicle emissions testing and inspection business in Iceland. Frumherji was one of the two. In a physically isolated island nation of just over 300,000 residents, word-of-mouth information about customer service could make or break a firm in the marketplace. Karl Sigurdssson, Senior Manager of Frumherji's Vehicle Department, was seeking ways to enhance customer service, while at the same time retaining the high standards and integrity that were essential to the company's continued contractual role with the Icelandic government. He hired a consultant to gather process data and make observations about customer service, and was considering how to use the information to identify problems and introduce solutions. The case highlights current challenges for Frumherji, including perceived customer service, demand variability, waiting times, recording errors, and employee turnover. It also includes relevant information about Iceland's immigration patterns, the growing market for vehicle inspection and emission testing, and goverment policies. The case presents a step-by-step description of the process for inspecting and testing private vehicles at Frumherji's largest station, Hestháls, located in Reykjavik. Accompanying information includes processing times, reject rates (yield rates as the inverse), wait times, error loops, and problems introduced by the customers themselves. Images of the facility and photos of the work area at each step in the process bring a sense of reality to the descriptions.

Raises the issue of the appropriate role of IT in lean manufacturing. Most large manufacturing companies have implemented ERP IT systems to support lean manufacturing practices. The Kerry plant of Esterline Technologies attempted an ERP implementation and then terminated it. Now the Kerry plant is revisiting the appropriate use of IT in an environment of highly innovative lean manufacturing.

An operating-level concept known as a process-complete architecture, and commonly called a cell, organizes work based on the start-to-finish processing needs of a family of similar products or services. This outcome-based form of organization contrasts with functional architectures that group similar activities together, but it offers more flexibility than an assembly-line approach. Research and anecdotal reports show strong evidence for the effectiveness of cells in terms of key operating priorities such as quality, cost, delivery speed, and the ability to meet changing customer requirements. Moreover, they are central to most "lean enterprise" efforts and may be applied to service delivery as well as manufacturing. In spite of their many advantages, not all work cells operate effectively over the long run. Many cell failures suffer from the tendency for organizations to drift back to their previous functionally oriented groupings. Identifies the characteristics of cells with staying power--cells that continue to support strategic objectives long after they are first initiated.