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ASIMCO International Casting Company, a joint venture between ASIMCO and Caterpillar, had recently finished several major projects designed to upgrade the manufacturing capabilities in its foundry. The plant was now under significant pressure to increase revenue, and had received an invitation to bid on a new customer order. While this order might provide the ideal opportunity to further upgrade its process technology and capabilities, significant challenges were presented by several critical product characteristics. Alternatively, the plant's limited resources could focus on meeting the internal needs of one of its partners. Caterpillar was expected to authorize test runs of two new products soon; however, the annual production volumes were very uncertain.

A study of more than 600 retail outlets finds that stock-outs are far more costly than most companies imagine.

D-Wave Systems is a start-up seeking to commercialize a quantum computer. Its business model is unique: as of 2003, it had very few technical resources within the firm. Instead, it financed a series of projects undertaken at universities and government labs. In return for partial funding, these organizations gave D-Wave the ownership of--or exclusive rights to--intellectual property developed in the project. Geordie Rose, CEO of D-Wave, wonders how long this model is appropriate in contrast to the alternative of centralizing the research in an in-house facility, with all the costs this would incur.

Spreadsheet for case UV0420

Breakthrough innovations--not just steady improvements--in operations can destroy competitors and shake up entire industries. Just look at Dell, Toyota, and Wal-Mart. But fewer than 10% of large companies have made serious attempts to achieve operational innovation. Why? One reason, contends the author, is that business culture undervalues operations--they're not as sexy as deals or acquisitions. In addition, many executives who rose through the ranks of finance or sales aren't familiar with operations--and they aren't interested in learning more. Finally, because no one holds the title vice-president of operational innovation, it doesn't have a natural home in the organization, so it's easily overlooked. Fortunately, all of these barriers can be overcome. This article offers practical advice on how to develop operational innovations, such as looking for role models outside your industry to emulate and identifying--and then defying--constraining assumptions about how work should be done. The author also discusses the best way to implement operational innovations. For instance, because they are disruptive by nature, projects should be concentrated in those activities with the greatest impact on enterprise strategic goals. Operational innovation may feel unglamorous or unfamiliar to many executives, but it is the only lasting basis for superior performance.

This is an MIT Sloan Management Review article. Many companies keep their suppliers and partners at arm's length, zealously guarding internal knowledge. Toyota Motor Corp., however, embraces its suppliers and encourages knowledge sharing through established networks. Toyota has developed interorganizational processes that facilitate the transfer of both explicit and tacit knowledge. The three key processes revolve around supplier associations (for general sharing of information), consulting groups (for workshops, seminars, and on-site assistance from Toyota), and learning teams (for on-site sharing of know-how within small groups). With Toyota's help, suppliers have fine-tuned their operations until, compared with their work for Toyota's rivals, they have 14% higher output per worker, 25% lower inventories, and 50% fewer defects. Quality improvements enable Toyota to charge price premiums for its products. Toyota's experience suggests that competitive advantages can be created and sustained through superior knowledge-sharing processes within a supplier network. The authors believe those principles have applicability in other types of alliances, too, including joint ventures. In fact, they contend that establishing effective interorganizational knowledge-sharing processes with suppliers and partners can be crucial for any company. The authors claim that knowledge sharing with suppliers is the reason for Toyota's dynamic learning capability and might be the company's one truly sustainable competitive advantage.

After two and a half years of effort, Fraser Bullock, COO of the 2002 Winter Olympics, faced projected deficits and post-9/11 security requirements only five months before the opening ceremony. Summarizes the organizational structure and processes put in place by Bullock and CEO Mitt Romney, as well as how they created systems and culture to endow effective working knowledge to the 90% of their staff who started working two weeks before the games began.

Provides a context and exercise for introducing retail inventory management, including cost optimization, service-level criteria, and forecasting in single and multiproduct settings. The owner of a single-location paper and paper products store considers the implications of expansion for inventory management. Considerations include lost sales, retail metrics for multiproduct settings, and shelf space constraints. An Excel spreadsheet accompanies and is integral to the case, allowing students to explore these issues. For spreadsheet inquiries, please contact customer service at 1-800-545-7685 or [email protected]

This case series (see also the B [UV3535], C [UV3536], D [UV3537], E [UV3538], F [UV3546], and G [UV4339] cases) focuses students on the boom-and-bust behaviors in the Northern Forest sawmill industry. Stakeholders, from landowners to sawmill owners to government officials to environmentalists, all want to make sure that the overall demand for saw logs, as driven by sawmill capacity, does not exceed the rate at which the trees are growing. They do not want sawmill demand to "overshoot" the productive capacity of the forest resource, a classic problem in renewable-resource economies that the region had experienced approximately a century earlier. Students are called upon to use system-thinking skills (analysis of reference modes of behaviors, causal-loop mapping, and stock-flow mapping) in creating their causal hypotheses of the underlying system structure. Students are asked to design system-structure policies to help sustain both the industry and the natural resources of the region.

This note provides detailed guidance for analyzing a complex business problem using the systems thinking tools: reference behavior patterns, systems archetypes, causal-loop diagrams, and stock-flow maps. The step by step guidance helps a systems thinker create a clear, organized presentation for a client or professional modeler. Successfully communicating one's views and hypotheses and making relevant, supported recommendations are an outgrowth of using the writing process to support a systems analysis.

Set during the 2002 Southern Africa food crisis the case describes the design and implementation of a humanitarian logistics operation for the distribution of food donations in the Southern Africa Development Community (SADC). This complex operation affected by severe droughts, economic downturn, poor access to recipients and the HIV pandemic, takes an unexpected turn when Zambia rejects the donations upon finding traces of genetically modified organisms (GMO). This forces agencies to redesign their assistance strategy and challenges the ongoing plans with new bottlenecks, costs, and delays. In the end the operations succeeds in light of the coordination support provided by the implementing agency, World Food Program (WFP).

Palliser is Canada's second largest furniture company. The company has production facilities in Canada, Mexico, and Indonesia and experimented with cutting and sewing leather in China. The company is looking at further expanding the relationship with China. Ever since Palliser set up a plant in Mexico, the company faced increasing competitive pressure from Asia, especially China. The president of Palliser must decide what form this relationship should follow: an investment, either wholly or partly owned, or through subcontracting?

As the engineering of state-of-the-art jet engines becomes more and more complex, Pratt & Whitney leaders face major competitive problems. Product development projects are not meeting the cost, quality, and lead-time targets. The leadership develops a design, development, test, and launch system that treats the engineering resources as a factory and carefully designs and manages the work flows, engineering activities, and hand-offs between tasks. There is promising initial success but some question whether the "engineering standard work" system stifles creativity and whether it is appropriate for the work of other professional functions.

This technical note provides an introduction to quality management tools, with a focus on the concepts of process control and process capability.

The flow of product returns is becoming a significant concern for manufacturers. Typically, these returns have been viewed as a nuisance, resulting in reverse supply chains that are designed to minimize costs. These minimum cost reverse supply chains often do not consider product return speed. The longer it takes to retrieve a returned product, the lower the chances that there are financially attractive reuse options. Unlike forward supply chains, design strategies for reverse supply chains are unexplored and largely undocumented. The most influential product characteristic for reverse supply chain design is the marginal value of time. Responsive reverse supply chains are the appropriate choice when the marginal value of time for products is high, and efficient reverse supply chains are the proper choice when the marginal value of time for products is low. Product returns and their reverse supply chains represent a potential value stream and deserve as much attention as forward supply chains.

Although companies spend much effort on the design, analysis, and management of their forward supply chains, they need to pay the same attention to their reverse supply chain. Pioneering firms have learned that making product returns profitable relies on good design of the reverse chains' business processes, including integration with the forward chain. Product modularity offers new possibilities for supply chain design. Optimal closed-loop supply chain management requires three things. First, the type of return needs to be matched with the appropriate closed-loop supply chain. Second, through modular reuse, it is possible to regain optimal value in closed-loop applications. Third, the value of reuse information may in some cases be higher than the value of the returns themselves.

Information and communication technology can help companies realize new, innovative business opportunities in the area of closed-loop supply chains. Examines closed-loop supply chains from three perspectives: processes, customers, and products. Exploiting the possibilities of closed-loop supply chains involves handling uncertainties by providing adequate information. Information on recovery options for a product, product preferences of the customer, and the state of the product can be used to reduce uncertainty. Data that is retrieved from the closed-loop supply chain by new technologies can be transformed into management information in a systematic way. Presents a framework to address uncertainty reduction strategies.

An increasing number of firms in Asia, Europe, and North America engage in voluntary or mandatory end-of-life product management. Because developments in product take-back are driven by a mixture of environmental concerns and economic opportunities, the most promising corporate end-of-life strategies create both economic and environmental value. Introduces a framework that can help managers identify and assess such supply loop strategies. Application of the framework to two specific supply loops demonstrates the usefulness of the framework: recycling and reuse of structural steel sections in the U.K. construction sector. Highlights the importance of supply chain constraints and also shows how lack of data can be a major obstacle to the evaluation of potential win-win supply loops.

Details the planning, implementation, and assessment of a worldwide electronics packaging take-back system by a key supply chain partner. The take-back system was a financial and environmental trade-off between reducing cardboard packaging against increased use of ground and water transportation. Through Internet-enabled life cycle analysis, the new system was shown to reduce waste as well as energy and environmental impacts significantly. The formal introduction of such methods in the electronics industry could save $150 million as well as billions of pounds of waste.

A growing concern for durable product manufacturers is how to manage the products they manufacture when they reach their end of life (EOL). In part, this attention is motivated by a growing number of countries across Europe and East Asia that are enacting legislation that imposes greater responsibilities on manufacturers for managing their EOL products. Even in nonregulated markets, however, some manufacturers are engaging in product recovery to reduce production costs, enhance brand image, meet changing customer expectations, protect aftermarkets, and preempt pending legislation or regulations. Explains when manufacturers should engage in product recovery efforts through partnerships, alliances, or vertical integration and when they should leave this task to independent firms. Technologies that enhance the productivity of product recovery, the level of uncertainty associated with reverse logistics, diverse manufacturing-related capabilities, the uniqueness of recovered assets, and the desire to avoid dependence on other organizations are key determinants that shape the industrial organization of EOL product recovery.