Martin K. Starr

Synchronized manufacturing as in OPT: from practice to theory

Abstract Synchronized manufacturing as in the OPT system (Optimized Production Technology, by Creative Output Inc.) is a relatively new concept for production management. This paper analyses the nine OPT rules, the OPT concepts and OPT philosophy in order to establish an analytical, theoretical basis for the OPT system. The analysis is based on systems theory concepts, mathematical programming theory and techniques, as well as queuing theory, the Pareto rule, and the Japanese production experience. It is shown that the OPT rules reflect substantial integration of well established MS/OR techniques with the whole OPT philosophy. The paper analyzes the OPT classification of VAT plants and the Drum-Buffer-Rope concept used in OPT. Our analysis makes a clear distinction between BIG OPT (the management system) and its subsystem SMALL OPT (the scheduler). The paper suggests that while the BIG OPT concepts may be applied in all types of processes, job shop processes and very complex assembly lines are the most suitable ones for the SMALL OPT scheduling system. The paper then shows the management by constraints methodology as a natural enhancement of the OPT concepts.

Modular production – a 45‐year‐old concept

Purpose – The purpose of this paper is to update an article written by the author in the Harvard Business Review almost 50 years ago.Design/methodology/approach – The paper evaluates the present status of the phenomena of modularity (for both product and service components). This is done by reviewing all existing literature on multitudinous facets of the subject and discussing applications with practitioners.Findings – Modularity remains a splintered concept, perhaps because so many different types of application exist. Heterogeneity stymies systemization. Nevertheless, successful applications exist. This International Journal of Operations & Production Management, dedicated to modularity, testifies to significant facets of accomplishment and continued challenges (e.g. optimum shoe sizing and modular construction). Also, production managers have not become boardroom planners (as was expected 45 years ago). Potential cost savings of modularity do not occur because off‐shoring provided another way to dramat...

Application of POM to e‐business: B2C e‐shopping

Can operations management impact significantly the profitability of consumer‐based businesses on the Internet (called B2C)? During the past two years, Internet retailers have not provided satisfactory financial results. Whereas, leading in‐store retailers have been profitable using traditional modes for selling and delivering goods to customers. The research underlying this paper focused on analyzing the costs of doing business which are affected by operations management decisions. We wanted to determine if the criteria for best practice normally used by operations managers applied to firms engaged in e‐tailing (Internet B2C). To do this we singled out a well‐known dot.com retail failure, Webvan. Cost data were studied from startup (1998) to bankruptcy (2001). It was found that operating costs were way out of line with (even) good practice. Under in‐store retailing circumstances, the inability to reach breakeven would not have been tolerated. While concentrating on Webvan, this paper uses information about other firms to provide additional insights.

The role of project management in a fast response organization

Abstract In response to fundamental competitive changes in the 1990s, organizations are being redesigned to provide faster responses. Timeliness has become the major competitive objective, while low unit costs and high quality are crucial constraints. To understand the role that project management plays with respect to timeliness, it is useful to observe how two different organizational reaction levels characterize fast response organizations (FROs). The first reaction level of FROs is tactical and internal. The emphasis on process-orientation means a just-in-time focus for minimum work-in-process, coordinated vendor deliveries, near-zero defectives, fast repair, appropriate preventive maintenance, rapid changeovers, minimum lead times, and efforts to achieve continuous, value-added production of goods and services. The tactical aspects of FROs have been covered in the literature. The second action level of FROs is strategic. Strategies create markets and are technology-driven. The development of new products and processes requires project management methods that are competitive, i.e., fast to learn about and respond to market oppurtunities and emerging technological developments. Since the 1950s, traditional project management methods have emphasized project time reduction, as well as controls for time and costs. This paper explores two new project management approaches that are being used by industry to translate innovative ideas rapidly into better processes, goods and services. The first approach, as in rugby, has many players working together in a fully-coordinated team effort. The goal is to reduce the project development time. This is done by restructuring team assignments so that (within practical limits) everyone knows a great deal about the status of the entire project. Since many stages can be worked on at the same time, we call this simultaneous management of project stages. For this case, milestone triggers are generally not heeded, and there are broad team responsibilities for coordinating project stages. The second approach uses continuous project management, in contrast to single-product project management. With single-product development (such as producing one new car) there is a start-up time, and an ending time that signals the projects termination. Continuous project management, on the other hand, takes the form of an on-going effort to manage a stream of multiple new products (such as the development of a succession of new cars). Teams are permanently assigned to project development activities. Often the goals are targeted incremental improvements, but they also can be directed toward significant “breakthrough” versions to radically alter a previous product design. Since project teams are permanently engaged, there is no project termination, which is why this approach is often called “on- going project management”. The system has a memory for ideas with potential utility that had to be shelved the first time around because they did not fit the schedule and/or match the prior goals. The capacity to reexamine and learn from prior project steps that were taken is very important.

Business in Japan and the United States of America; some implications for management science and operations research

Significant differences exist between United States-managed and Japanese-managed organizations. - - U.S. firms are epitomized by surplus behaviors (emphasis on profits and returns on assets, investments and equity).- - Japanese firms are characterized by scarcity behaviors (emphasis on husbanding resources and reduction of waste).- - Management Science has been used in the generally surplus-oriented Western-world. Western values drive its application, or the decision not to apply it.- - Management Science can work effectively within a scarce-resource framework, as well as within a surplus-resource framework.- - Management Science has been barely used by the Japanese, although they might use it effectively. A possible explanation is that the Japanese culture is pervasive and consistent in dealing with scarcity.- - Management Science, when combined with a severe distaste for waste, may enable Western-world management to develop better strategies to achieve Global Competitiveness.- - The scarcity-oriented value system elevates the importance of people as resources. Management Science, to be effective, must do the same.

The decision to adopt new technology—Effects on organizational size

FMS is new technology with many considerations that differ from those familiarly applied to job shop, flow shop and automated flow shop work configurations. A major obstacle to using FMS is that little is known about how to co-ordinate flexible work and transfer activities to obtain a relatively constant flow of marketable output. In the past year, articles on FMS have appeared with increasing frequency. Their emphasis highlights the reduction in variable production costs that FMS promises. This paper describes a different approach, namely, to uncover the effects of FMS technology on optimal organizational size. To achieve this end, we must consider factors other than variable production cost savings. This enlarges the scope of the decision model required to evaluate FMS configurations. The investigation proceeds along two diverse, but complementary paths. One is based on a theoretical model, using non-linear breakeven analysis. The second employs empirical data obtained from industrial users. The theoretical model indicates that FMS requires a larger total output than the system it replaces. Empirical results tend to confirm this finding. In addition, FMS alters other managerial considerations, including appropriate marketing strategies.

Educating Managers to Compete: The Role of Operations Management

Conventional methods for managing firms — which worked for U.S. firms from the 1950s through the 1980s — are not so competitive in the final decade of the 20th Century. Traditional schools of business — which evolved from the 1950s through the 1980s — provide the MBAs that practice the not so competitive, conventional methods of managing.