Knowledge that Transforms

Product design efforts in recent years have focused on standardization and simplification of the product structure. It has been widely argued that savings, tangible and intangible, can be realized by simplifying the product design. In this study, we examine this belief and show that other issues like flexibility of process and design are important as well. We demonstrate that having process flexibility, e.g., of producing a product in two different ways, using two different product structures (as opposed to one), is advantageous with respect to components purchasing costs. This result is in contrast with the notion of standardization since the variety of components in the flexible design is increased. Properties of savings in purchasing costs associated with the use of this flexible design are provided.

There should be two distinctly different pom introductory courses (or even tracks) for MBAs. Course one (called pom) would consist of traditional pom materials emphasizing domestic POM course materials. Course two, called international production and operations management (ipom), would focus on international aspects of pom, emphasizing cross‐boundary operations. Training of instructors differs significantly for the two courses. ipom accentuates operations crossing borders where different languages, cultures and currencies apply. The ipom syllabus employs cases and examples based on companies and/or divisions located in a great variety of countries. Three important drivers of the international pom curriculum should be recognized: (1) supply chain management with ipom responsible for coordinating sources‐of materials as well as making and delivering goods and services across global boundaries, (2) portfolio management because ipom can reduce risks by geographically diversifying operations, and (3) capabilities management because ipom must spot, develop and implement special global opportunities. Teaching how these three international drivers interact challenges the pom field to provide proper curriculum development and instructor methodology.

This paper builds on a recent empirical study of the setup‐reduction process that suggests setup‐reduction proceeds through three major stages and that each stage is dominated by a particular type of investment function. Specifically, it examines the question of how to best prioritize investments during the stage that emphasizes standardizing setups across a work center. We compare different investment‐allocation rules in a multi‐item, capacity‐constrained, dynamic demand environment under a variety of cost, demand, and investment assumptions. This analysis shows that significant differences in benefits can be achieved depending on the way setup‐reduction investments are prioritized.

Lot streaming is the process of splitting a job or lot into sublots to reduce its makespan on a sequence of machines. The goal in the lot streaming problem is to find the optimal size of each sublot that will minimize the makespan. The makespan is defined as the time the last sublot completes its processing on the last machine. If the sizes of these sublots are restricted to remain the same on all machines, the solution is called a consistent sublot solution. However, if the sizes of the sublots are allowed to vary, the solution is referred to as a nonconsistent or variable sublot solution. Also, if the machines must be in operation continuously from the first to the last sublot, the solution is a no idling solution. When setups are explicitly considered in the problem, there will be two cases. If setups on each machine require some portion of the first sublot be present by the machine, the problem is referred to as the attached setup time problem. If setups can be performed ahead of time before the first sublot reaches the particular machine, the corresponding problem is referred to as the detached setup problem. Finally, if the machines are allowed to be idle between the processing of sublots, the resultant solution is an intermittent idling solution. In this paper, the consistent sublot lot streaming problem with intermittent idling and no setups is discussed. The models developed also assume that the number of sublots are fixed and known. The m machine two sublot lot streaming problem is reviewed. An algorithm for the three sublot, m machine problem is derived using a network representation of the problem. The complexity of the algorithm is O ( m 2 ). Finally, using the insights from three sublot problem, a heuristic algorithm is provided for the m machine, n sublot problems. The results on the proposed heuristic are very encouraging; average percent deviation from optimal makespan is approximately at 0.76% on 155 randomly generated problems with different m and n values.

This essay argues that it is difficult to justify intellectually a separate subject of international operations management. Nevertheless, courses with titles like that abound and other professional activities are centered on international operations, at least in the United States. Of course, there are real differences in management activities in different parts of the world that must be contended with. A comparison of European and U.S. managers' exposure to international business suggests that there is a higher startup cost for U.S. managers to do so. Drawing an analogy between the management of operations and the solving of a huge mathematical programming problem implies that there are few new variables introduced by going international, but that the weights on existing variables can change substantially. Therefore, even though difficult to justify intellectually, continuing to treat international operations management separately may provide us some short‐term advantages. By helping us focus our attention on the important variables that change, it may provide us the insights to help reduce the startup cost for U.S. managers entering international operations.

It has been more than a decade since the quality movement was reborn in U.S. industry, and there is widespread dissatisfaction with the results of some of these programs. At the same time, product and service R&D is on the rise. These trends are incorporated here into an extension of the Utterback‐Abernathy model to examine the quality, technology, and performance relationship. Six hundred durable goods firms in 20 countries were surveyed and it was found that technology significantly moderated the association of R&D intensity and total quality management (tqm) with market share, controlling for industry category. In high technology firms, R&D intensity was significantly associated with market share; in low technology firms, tqm was significantly associated with market share. R&D intensity and tqm were significantly and inversely related, while R&D intensity and computer‐aided manufacturing (cam) were significantly and directly related.

We study an economic order quantity/reorder point (EOQ/ROP) model with stochastic demand and backorders where options of investing in reducing setup cost, lead time, and variance of demand forecast errors are available. The model is quite comprehensive relative to previous models since it simultaneously addresses the strategic decisions associated with these three investment opportunities as well as the tactical decisions of determining both the lot size and the safety stock. We develop a simple search procedure to obtain the optimal values of setup cost, lead time, variance of demand forecast errors, order quantity, and safety stock multiplier. Computational studies are performed to determine the sensitivity of the optimal solution of the model to changes in the model's parameters.

Increasing globalization has affected the way that firms are managed today. While its impact on competitive strategy, marketing, and finance has been well accepted and well studied, its effect on the firm's technology and operations has not. This paper provides resources for research and teaching in international technology and operations management (itom). Included are an extensive bibliography of papers and an overview of large‐scale survey research initiatives in the area. By bringing together and categorizing this body of work, we hope to facilitate further work in the area and to help define ITOM'S scope.

The competitiveness of Western European manufacturing is slowly being eroded away and European firms must act decisively to halt this decline. Costs in Europe are high and getting higher. Productivity is not keeping pace. European manufacturers have adopted some of the ideas that have proved useful to manufacturers elsewhere around the globe, but they need to do more. Many European countries remain net exporters of direct investment. If the erosion is to be halted, European manufacturers must address overcapacity, particularly among the many small factories there, inappropriate plant locations, and company organizations that foster too much country‐specific independence.

Since Eli Goldratt first appeared on the scene in the late 1970s, his ideas concerning production management have generated a huge amount of interest, controversy, and misunderstanding. These ideas have been proliferated under several names such as optimized production technology (OPT), drum‐buffer‐rope (DBR), synchronized manufacturing (SM), and theory of constraints (TOC). Although there seems to be general agreement on the importance of how capacity‐constrained resources are scheduled, research aimed at advancing the state of the art for the specific problem addressed by DBR continues to be limited by prior misunderstandings and the lack of a rigorous examination by the academic community. This paper seeks “to advance the state of research on constraint scheduling in several ways. First, it presents a concise history of the evolution of DBR. It then explains the use of rods in constraint scheduling. Next, it presents in detail the solution algorithm incorporated by the Goldratt Institute in their production software and, finally, relates that algorithm to alternative methods. In the process of these activities, several lingering misconceptions are resolved.