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Merloni Elettrodomestici is a leading Italian manufacturer of domestic appliances. In 1986, an exposition for Merloni customers is scheduled at its Milano regional warehouse. During the two-month period preceding the event, when the warehouse must be free of inventory, the company conducts a "transit point" experiment. Each day, a truckload of products from the company's central warehouse is sent to Milano, where it is immediately transferred to small trucks for local delivery. At the conclusion of the experiment, the company is considering the replacement of its 17 regional warehouses with transit points. Students are asked to evaluate this proposal and recommend a configuration for Merloni's distribution network. Issues to be considered in the analysis of the case include the impact of different network configurations on customer service and on inventory, labor, operating, and transport costs.

Describes the circumstances surrounding Whistler Corp.'s decision whether or not to continue manufacturing operations in the United States. The company had been experiencing severe problems in its domestic manufacturing operations and was thus unable to compete with suppliers from the Far East. A pilot project organized by a consulting firm suggests a number of changes that could drastically improve the firm's manufacturing competitiveness. Management must decide whether these changes should be implemented or whether all products should be procured from offshore sources.

Very early in the history of biotechnology (about 1979), Monsanto made a major commitment to move into this field. This case recounts the history from the point of view of the eminent scientist hired to head up corporate R&D. He took Monsanto from a very traditional agricultural chemicals technology base to one of the world's finest biotechnology centers and oversaw the purchase of Searle Pharmaceuticals. Raises a number of issues: How can a company move into a totally new technology? What are the advantages and disadvantages of sourcing technology from small firms and universities? How should research be organized? Emphasizes the very long-term view that Monsanto took in justifying their huge investment.

Product "robustness" is a function of good design. Still, most traditional quality programs concentrate on the factory. Zero Defects says that when parts come in within tolerances, the product will be fine. But parts just within tolerances have no advantage over those that just miss; it is better to miss a target consistently than to hit it haphazardly. Robust products maximize "signal-to-noise" ratios of component parts. Product designers can maximize these ratios by running experiments according to orthogonal arrays, which reckon the average effect of each variation on all other variations.

Examines the entire product development process at a premier German company, focusing on the role of design as a key player in interdisciplinary teams. Braun is embarking on a strategic shift from exclusively high-end products to products suitable for the upper end of the mass market. At an early stage in this process, the company must decide what kind of plastic material is appropriate for a new coffeemaker by analyzing the myriad of implications surrounding this decision. At stake is its reputation and corporate image as represented by its kitchen appliances.

Describes the development of a fully automated production line for manufacturing radio pagers. The company regarded the project as highly successful; it becomes clear in the case, however, that there were some shortcomings as well. Some marketing issues were not properly addressed and, despite the claims of the company that the project was completed in 18 months, development of the line continued after the official end date for over a year. The student must analyze the situation to determine what lessons should be taken from the project and how best to apply those lessons to other projects.

Five trends shape the new competition: worldwide dissemination of scientific knowledge, growth in the number of global competitors, fragmented markets and shifting customer preferences, diverse and transforming process technologies, and proliferation of the number of technologies relevant to any product. Never has technology been so important, never has it been harder to gain a competitive edge by means of technology alone. Managers must link technical capabilities to customer requirements. Important principles of action are: know the technological core and link it to strategic intent, take a global view of technical competence, time is of the essence, discipline functions around the science of production, and integrate operations around the information system.

Many proponents of just-in-time manufacturing see MRP II systems as a thing of the past, believing that true JIT leaves control of production to computerless systems such as kanban. Many MRP II advocates fear that computer automation is under attack and perceive kanban as a replay of older systems. Advanced manufacturing companies do best with hybrid systems, both kanban and MRP. Managers must ask basic questions of manufacturing strategy to get the best mix.

Velcro USA received a complaint from a customer that it was inspecting quality into its products rather than manufacturing it in. Velcro was given 90 days to start putting its house in order. The company installed statistical process control for data feedback, drew up a quality manual, put its employees through a quality course, and set up a management steering committee. In the first year of the program, Velcro reduced waste by 50%; in the second year, by 45%.

This note provides a brief history of the origins of return-on-investment measurement at Du Pont and its close link with operations management. The Du Pont chart approach to calculating return on assets is described, and the chart is presented in work-sheet form to facilitate application by persons unfamiliar with the financial concepts. Use of ROA and ROE for performance measurement is discussed, and average measures of two samples of top U.S. and Japanese companies are presented.

U.S. manufacturers spend, on average, 56 cents of every sales dollar on purchased goods. They need fewer, smarter suppliers whom they can turn into production partners. At companies such as Xerox, Hewlett-Packard, and Ford buyers put together interfunctional teams of engineers, quality specialists, and purchasing agents to evaluate suppliers. When negotiating price, buyers need as much information as possible about production costs. However, they must not abuse this access by shaving suppliers' margins to the bone.

Manufacturers that thrive into the next generation will compete by bundling services with products. The factory will be the hub of their efforts to get and hold customers. Some companies are already exploiting their factories' service potentials. Upstream activities like marketing, design, and quality, are folding into downstream activities like sales, repair, and aftersales support.

A few years ago, Northern Telecom, Inc. (NTI) set up a council of division heads and headquarters managers to devise a manufacturing plan for the 1990s. It began by listing things NTI had to do--surprisingly, all items had to do with meeting customer needs faster. New pay incentives, profit-and-loss statements, and training sessions supported the new direction. NTI's experience shows that time-based strategy is achievable and rewarding; the receiving cycle is shorter, inventories and defects are down, and customer satisfaction is fast approaching the 1990 goal.

Illustrates the difficulty of effective production planning and production control in a multistage production process affected by seasonal demand. A rewritten version of an earlier case by S.C. Wheelwright.

Describes the forces that led to the development of a logistics analysis program by the Burlington Northern Railroad. The first half of the case describes changes in industrial structure, technology, demographics, shipper practices, and government regulation that led to the general decline of the railroad industry following World War II. The remainder contains the Burlington Northern's competitive response to its changing environment, including the company's decision to develop a logistics analysis program to improve their employees' and their customers' understanding of logistics. Also contains an example of logistics cost tradeoffs.

Describes the experiences of a seasoned Burlington Northern (BN) sales representative after the introduction of ShipSmart, a decision support system developed by the BN to help its employees and customers analyze logistics problems. After a brief description of a logistics training program for sales representatives, the case describes an opportunity for new business for the BN (shipping beer from a brewery to beer distributors by rail, rather than truck) identified by the sales representative. Realizing the new business will require the coordination of logistics channel partners (the brewery, the distributors, and the railroad) as well as interfunctional coordination (between marketing, engineering, and operations) within the railroad. The sales representative weighs the complexities of the problem and considers the use of ShipSmart to demonstrate the value of switching to rail transport to the distributors and the brewery.

Describes a multiechelon distribution system for the distribution of automobile spare parts. An analyst has been hired by the Norton Auto Supply Co. to improve the company's inventory planning and control techniques. Includes demand, cost, weight, and supplier lead time information for a set of parts. Students are asked to devise an inventory control system that distinguishes between different parts based on relevant characteristics.

This case considers the EPA's bubble policy, which allows pollution to be managed on a plantwide basis rather than stack by stack. A pollution constraint is added to a linear-programming model that may be used to plan production and the control of pollution.

Managers who commit their companies to designing more manufacturable products encounter the problem of how to organize their professional staff. How should design and manufacturing engineers be encouraged - or made - to work together? What changes does the team approach to design entail? Here are four organization approaches to designing for manufacture, each with advantages and drawbacks: 1) the manufacturing sign-off approach; 2) the integrator approach; 3) the cross-functional team approach; and 4) the product-process design department. Hybrid approaches may well be better than any individual one.

The owner and general manager of the Cedarbrae Volkswagen dealership is concerned about the Kundendienst Index (KI) used by Volkswagen Canada to measure customer satisfaction with new vehicles and service work. The case details Cedarbrae operations and the KI, and focuses on the issues of What is quality of service?, and How do you devise a management control system that reinforces and measures service? From a marketing research perspective, case discussion could center around a technical evaluation of the customer survey process design.