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Reviews the history of Pohang Iron & Steel Co.'s (POSCO) development under its founding Chairman, Mr. T. J. Park. Between 1968 and 1991 the company grew from nothing to the third largest steel producer in the world. Now POSCO's opportunities for further growth in steel appear limited and Chairman Park is raising the possibility of leaving the company to enter Korea's political arena. Teaching Purpose: Strategy of a developing country, and how what appeared to be outstanding opportunities at one stage of development no longer appear as attractive at a later stage.

Describes the initial efforts at a film production plant to shift from a traditional QC inspection mentality to a worker-based process control mentality. Students can prepare SPC charts, propose actions needed, and combine steps into an overall action plan.

The plant manager of a film production operation wants to create and implement a new approach to quality within the next 12 months. Issues of personnel (and their roles), production processes (and their control), and quality standards must be addressed.

Spreadsheet supplement for case 693047

Out of a sense of corporate responsibility, many of today's manufacturers are making commodity-like components to preserve jobs. This single-minded focus on preserving jobs can become a self-defeating objective. It often results in insourcing parts that are easy to manufacture, largely to make work, while outsourcing those that are hard to make. Over time, fixed costs rise, product differentiation declines, and manufacturing performance remains stagnant as employees become complacent. The very survival of the company is threatened. Companies must learn how to not make things: how to not make the parts that divert a company from cultivating its repertoire of skills--parts its suppliers could make more efficiently. Managers must gain the confidence to make strategic discriminations among the thousands of parts they know mostly in terms of cost, not function or importance to the product.

L.L. Bean must make stocking decisions on thousands of items sold through its catalogs. In many cases, orders must be placed with vendors twelve or more weeks before a catalog lands on a customer's doorstep, and commitments cannot be changed thereafter. As a result, L.L. Bean suffers annual losses of over $20 million due to stockouts or liquidations of excess inventory. Provides a context in which buying decisions that balance costs of overstocking and understocking when demand is uncertain are made and implemented on a routine basis.

A paper company is unable to compete on cost as a result of the installation of three very efficient paper machines by competitors. Prices for its products are falling by the day, and the company is making a loss. In the face of such competition, management feels that the only course of action is to improve "flexibility" and/or take advantage of the flexibility they already have. The problem is that no one knows quite what flexibility is, let alone how to implement an improvement plan. The case describes four improvement paths, each of which might be considered to improve "flexibility." The conflicts between these plans are also considered by the company. In addition, the sales force gives a look at the flexibility requirements of the company from the customer's viewpoint.

McDonald's has over many years built an operating strategy based on consistency and quality through a limited product range. Competitive forces have drawn the company into a much wider variety of foods and services in order to maintain growth. Now, new competitors threaten to beat McDonald's at its own, original game. In addition, McDonald's faces unprecedented challenges in its environmental policy. The case teaches approaches and dangers arising from flexibility, and the identification of capabilities that support different types of flexibility. The integration of environmental concerns with operations strategy is also addressed.

American Connector Co. is forced to reexamine operations at its Sunnyvale plant when a Japanese competitor announces plans to build an "ultimate" plant in the United States. Case examines issues related to benchmarking a competitor's manufacturing capabilities and productivity. Allows students to compare two companies' manufacturing strategies and their implications for productivity and flexibility.

Spreadsheet supplement for case 693-035.

Presents a plant manager's proposal to improve operations at American Connector Co. The plan attempts to imitate operations at DJC Corp., a successful Japanese competitor. Requires students to consider how changes in manufacturing impact productivity, flexibility, and overall strategy.

Describes Kodak's decision regarding a manufacturing site for some of its products. Compares several types of products (with different cost structures) and several worldwide locations (with different characteristics). Provides a framework (model) for comparing and evaluating the options. Identifies relevant factors in evaluating manufacturing sourcing decisions and illustrates how the complexities can be addressed and handled effectively.

On May 1, 1992, Doug Friesen, manager of assembly for Toyota's Georgetown, Kentucky, plant, faces a problem with the seats installed in the plant's sole product--Camrys. A growing number of cars are sitting off-line with defective seats or are missing them entirely. This situation is one of several causes of recent overtime, yet neither the reason for the problem nor a solution is readily apparent. As the plant is an exemplar of Toyota's famed production system (TPS), Friesen is determined that, if possible, the situation will be resolved using TPS principles and tools. Students are asked to suggest what action(s) Friesen should take and to analyze whether Georgetown's current handling of the seat problem fits within the TPS philosophy.

An expansion in the bottling plant of a brewery leads to a reassessment of the manual palletizing operation. It is possible to purchase expensive automatic equipment and a choice of makes is involved.

ChemBright is a small start-up company that manufactures private-label household chemicals. The company sells its products to grocery chains in the New England area. Its strategy is based on a significant logistics-based cost advantage. The primary case decisions are 1) how the company should respond to a price war initiated by a strong competitor, and 2) how the company can continue to exploit its logistics advantages as it pursues different growth alternatives. Acts as an effective introduction to logistics, and, in particular, to the fact that logistics is not a purely tactical function, but can be used as a powerful competitive weapon.

Manufacturing companies now face the challenge of globally integrating their operations. Multinationals can no longer rely on sheer size and geographic reach to dominate the volatile global arena. By integrating far-flung plants into tightly connected, distributed production systems, companies can seize the opportunity for a new manufacturing scale advantage. In becoming globally integrated, companies must balance the tension between a central authority and independent units. They must also focus specific changes in functions by articulating a vision shared by the entire organization.

This is an MIT Sloan Management Review article. Do you consider distribution and inventory costs when you design products? Can you keep your customers informed of when their orders will arrive? Do you know what kind of inventory control systems your dealers use? If not, you've succumbed to the pitfalls of inventory management. You're not alone. Manufacturers have been concentrating on quality of incoming materials and outgoing products, but they haven't been paying as much attention to the costs associated with transporting and storing them. Describes 14 pitfalls of supply chain management and some corresponding opportunities. The more complex your network of suppliers, manufacturers, and distributors, the more likely you can gain operational efficiencies by attending to inventory.

Describes three subsequent generations of product development effort at an equipment firm supplying the semiconductor industry. The firm is partway into the third generation development and must decide whether and how to accelerate product development to respond to competitive pressures.

Explores BMW's decision about how to manufacture prototype vehicles. Historically, BMW's prototypes were handcrafted by highly skilled artisans in the company's shop. A proposal has been made to alter the process so that prototypes are made in a way that can better uncover potential problems that may arise during final production. While the new approach is expected to make production start-up of new models smoother and reduce quality problems, there is some concern within the company that it will lead to less flexibility to change (and improve) designs during the development cycle. Explores different ways of competing on quality in a luxury product segment and how the product development process affects each of these. A second objective is to examine the notion of a prototyping strategy and the role prototyping plays in linking development strategy and manufacturing strategy.

Describes the adoption and evolution of product development teams and business teams at Quantum. Emphasizes integration of team capabilities with product development and competitive advantage in a rapidly changing environment.