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A few weeks after production started on Spin Master Toys latest product, E-Chargers, an electrically powered model airplane, the operations manager had to deal with a persistent and serious quality problem; up to 30 per cent of the current production of the wings were substandard. He knew he had to do something fast. The company could not afford any more supply problems. This is the third case in a three case series that follows the selection of a manufacturer and the progress of the production of a new product. The accompanying cases are Spin Master Toys (A):Finding a Manufacturer (product 901D01) and Spin Master Toys (B): A New E-Chargers Supplier? (product 901D02).

Given the improved overall quality standards in effect nowadays, companies risk becoming complacent about quality issues. However, with supply chains becoming longer and customers becoming more demanding, quality management continues to be a challenge to companies. Describes Nestle's approach to quality management. Reviews three highly publicized incidents that occurred at Coca-Cola, Firestone, and Snow Brand Milk Products and their dramatic impact on the company and top management. These incidents highlight the fact that quality must be seen from the total supply chain perspective with the main focus on quality in use. Can also be used to study crisis management.

Marie-Jeanne Becaus-Pieters was founder and president of the Pan European network of Fish Auctions (PEFA). Created to link fish auctions across Europe, Pefa.com was the first Internet-based market exchange for the remote trading of fresh fish in real time. PEFA's strategy was primarily based on matching northern European supplies of fresh fish with the large demand for fish in southern Europe. In addition, with access to fish supplies, both large and small, in the most remote parts of northern, western, and southern Europe, buyers throughout the region would have a much broader pallet of fish products from which to choose. As of June 1998, Becaus-Pieters recognized that the major challenge lay not in the refinement of the PEFA business model but in making it work. The liquidity and viability of the exchange would depend not only on providing the opportunity of trading online but also on implementing those supply chain management processes essential to ensure the quality and the on-time, in-full delivery of the fish purchased. A 2002 POMS international case writing award winner.

Describes the relationship between Freqon, a producer of frequency converters, and NordAlu, a supplier of extruded aluminum components, over a period of 13 years. Shows how early successes were not sufficiently followed up by improvement efforts later on. Having achieved a substantial level of interaction, joint projects, and sales during the 1990s, by 2000 the relationship was almost back to its original state of limited joint interest and tension between the two companies. Was this just a natural evolution or could the two firms have gone on to a better joint working relationship? The description of the relationship is unique, as case writers rarely have the opportunity to access information for a period of more than 10 years. A winner of the 2002 DSI Best Case Study Award.

Describes a decision to be made on the future of manufacturing for tape drives at Hewlett-Packard. HP has used several different manufacturing partners in the earlier versions of its products. Now HP is facing a decision to outsource manufacturing and create a virtual supply chain for the next product generation. Provides opportunities to discuss the strategic and operational challenges of outsourcing and the use of electronics manufacturing services companies in supply chain operation.

This note describes the replenishment-inventory management -- framework, concepts and tools.

Conventional project-management tools--PERT charts and Gantt charts, for example--were created to help manage sequences of discrete tasks that make up large construction projects. Yet these tools don't capture clearly the back-and-forth of information that takes place in innovative processes, such as product development. Conventional tools are designed to answer the question, "What other tasks must be completed before I begin this one?" But product development planners, especially in high-tech businesses, need tools that answer a very different question: "What information do I need from other tasks before I can complete this one?" The author describes the Design Structure Matrix (DSM), a project management tool that focuses on representing the information flows of a project rather than its work flows. He explains how the DSM works and how to use it to make development processes more efficient. A project DSM can show which information exchanges involve design iteration and how well a process anticipates the need for rework. In addition, the author suggests four ways to improve a company's information flows: rearranging the sequence of tasks, reconsidering the organization of tasks, reducing the number of information exchanges, and managing unplannable work. By stripping away the mystery around information exchange during innovation, the DSM can give managers far more control over their most risky and expensive projects.

This note describes the Coordination Module in the core-curriculum Operations Management course at the Darden School.

This note describes the Operations Management course in the core curriculum at the Darden School.

Examines the history of Iridium Communications, a provider of mobile satellite services. Discusses the genesis of Iridium's technical design, then follows the venture through various stages of development. Describes Iridium's attempts to build a subscriber base after the launch of commercial service, ending with the company's filing for Chapter 11 in 1999.

Mastering the art of recovering and rebuilding products from the world's waste stream is a big step toward achieving sustainable development. Drivers of remanufacturing include not only legislation but also the prolonged economic life of equipment and strategic opportunities. Key issues in the reverse logistics of remanufacturing include transportation and storage, handling and packaging, sorting, and disassembly. Understanding disassembly involves capabilities for inspection and sorting, knowing what to disassemble, feedback to designers, inventory control, and scheduling. Finally, there is the matter of reassembly. When remanufactured products are completed, they must be introduced back into consumer channels and forward logistics. Also of importance are the development of market awareness and appreciation; here, issues of target markets, pricing, and warranties must be addressed. Successful remanufacturing requires the development of skills that currently are not a major part of the manufacturing portfolio. Development of skills in reverse logistics will move us closer to the ideal of sustainable development.

Requires participation in a team research project. Each team should have three to four members. The goal of the project is to acquire first-hand knowledge of how a particular business process is managed at a small company.

As the ninth largest bank holding company in the United States in 2000, FleetBoston Financial Corp. provided a myriad of financial services, including retail banking, loan origination, and brokerage accounts. This case explores how FleetBoston responded to the Internet and the rise of new competition from both within and outside the banking industry. The majority of the case acquaints students with how customers interact with financial services, how these firms make money, and what are their challenges and opportunities. The majority of retail banking customers are unprofitable, making for a unique operating environment in which innovations are consistently aimed at reducing costs. Because customer behavior contributes directly to costs, innovations center on providing lower cost channels for customer transactions. Unfortunately, each new channel increases overall costs, and banks are still faced with reducing costs. In addition, the Internet has given rise to new competitors, many with lower cost structures and revenue potential outside banking.

A regional director of donor services for the American Red Cross was wondering how to improve services to blood donors. Faced with an increasing number of complaints that donors were being held up in long lines at Red Cross' mobile blood collection operations - commonly termed bloodmobiles - she was considering several design alternatives for the blood collection process. Using the accompanying Extend run-time model (product #7B00D024), data file and structured assignment, students can explore changes in staffing assignments, donor registration and donor-bed configurations. For each alternative, a comparison is possible along a number of performance dimensions.

Bush Boake Allen, a flavor and fragrance firm, is considering strategic options that would integrate customers into its innovation process via a potentially disruptive Internet-based technology. As this approach could result in dramatic changes to the firm's business model and relationship with customers worldwide, Julian Boyden, president, CEO, and chairman, faces serious opposition from senior managers.

Reverse auctions certainly look like a good deal for buyers. Who wouldn't want hoards of suppliers bidding one another's prices down? But a new study reveals important downsides that should make buyers beware.

As retailers adopt lean retailing practices, manufacturers are feeling the pinch. Retailers no longer place large seasonal orders for goods in advance--instead, they require ongoing replenishment of stock, forcing manufacturers to predict demand and then hold substantial inventories indefinitely. Manufacturers now carry the cost of inventory risk--the possibility that demand will dry up and goods will have to be sold below cost. And as product proliferation increases, customer demand becomes harder to predict. Most manufacturers apply one inventory policy for all stock-keeping units in a product line. But the inventory demand for SKUs within the same product line can vary significantly. SKUs with high volume typically have little variation in weekly sales, while slow-selling SKUs can vary enormously in weekly sales. The greater the variation, the larger the inventory the manufacturer must hold relative to an SKU's expected weekly sales. By differentiating inventory policies at the SKU level, manufacturers can reduce inventories for the high-volume SKUs and increase them for the low-volume ones--and thereby improve the profitability of the entire line.

Using the Internet to facilitate business-to-business commerce promises many benefits, such as dramatic cost reductions and greater access to buyers and sellers. Yet little is known about how B2B e-commerce will evolve. The authors argue that changes in the financial services industry over the past two decades provide important clues. Exchanges, they say, are not the primary source of value in information-intensive markets; value tends to accumulate among a diverse group of specialists that focus on such tasks as packaging, standard setting, arbitrage, and information management. Because scale and liquidity are vitally important to efficient trading, today's exchanges will consolidate into a relatively small set of mega-exchanges. For many companies, traditional skills in such areas as product development, manufacturing, and marketing may become relatively less important, while the ability to understand and capitalize on market dynamics may become considerably more important.

The technology deployment specialist of the Adelaide District School Board needed to make immediate changes to the purchasing system to respond to service demands. The current system was not widely accessible or user-friendly and was creating heavy workloads and the need for overtime. Senior management recognized the advantages of implementing a system that would integrate the data processing of all functions, including human resources, inventory, finance, purchasing, etc., and gave her the mandate to find an integrated system and develop a proposal for its implementation. In addition to finding a system that would meet these criteria, she had to consider the conflicting interests of different users, a new system that had been implemented in the finance department, and the ongoing changes in the organization.

This case deals with Carrier Corporation's management's efforts to create a strategic supply partnership with one of its major suppliers. Some issues covered include purchasing, supply chain management, alliances and partnerships, and productivity improvement. This case has been used in an MBA course on supply chain management and in executive education general management courses.