Week 16

Our final exam is this week.  I've really enjoyed this class.  I think that keeping a journal about the insights I've gained in this class has proved to be a good memory aid.  I have a feeling that some of the material I've learned this semester will stick around in my retrievable memory longer than most information I acquire in school.

I'm going to miss the interaction and insights I've gained in class.  I know that pieces of this class, as with my other classes, will remain in my memory though for me to look back at with joy.  Good times!  I highly recommend the Jon M. Huntsman School of Business at Utah State University :)

Week 15

This was the last week we met for class.  Next week is the final exam.  Our final topic of study is Resource Planning, which lies at the heart of any organization and crosses all functional areas.  A big focus of this chapter is Enterprise Resource Planning (ERP) systems.  I think it is very interesting that I'm learning about ERP systems in my Accounting Information Systems BUS 4500 class right now too.

According to our textbook in this class, "ERP systems allow an organization to view its operations as a whole rather than having to try to put together the different information pieces produced by its various functions and divisions." 

ERP systems can be very expensive, so care should be made to design the system right to begin with.  It is important to involve all departments in the planning and design processes.  A good point to start is determining the outputs wanted and needed first, then determine the required inputs, etc.  Logical and Physical security measures and controls should be established to protect the system.

The topic of EOQ surfaced again in this chapter, in conjunction with Fixed Order Quantity (FOQ).  A FOQ rule maintains the same quantity or lot size each time an order is issued.  Periodic Order Quantity (POQ) was also discussed.  A POQ rule allows a different ordering quantity for each order issued but tends to issue the order at predetermined time intervals, such as every two weeks.  The order quantity equals the amount of the item needed during the predetermined time between orders and must be large enough to prevent shortages.

My favorite activity in this chapter was using a bill of materials and other information to develop a Master Production Schedule (MPS).  The process is a lot like solving a puzzle using math skills.  I think I'm inclined to enjoy these types of activities.  It seems that many fellow classmates of mine dislike math based problems.  I on the other hand prefer them, unless they are extremely time consuming problems that provide only busy work.  It's always good to practice, but sometimes I've felt overloaded with homework in some of my previous classes.

If I ever begin a manufacturing operation, I will definitely refer back to this chapter.

Week 14

This week we studied Inventory Management.  Our textbook describes it as, "the planning and controlling of inventories in order to meet the competitive priorities of the organization."  "Effective inventory management is essential for realizing the full potential of any value chain."  

Whenever an organization has more receipts of materials, parts, or finished goods than what is disbursed, inventory is created.  Inventory is depleted when disbursements exceed receipts.  There are advantages and disadvantages to maintaining low and high inventories.

The pressures for low inventories include elements that comprise what is termed Inventory Holding Cost:

• Cost of Capital
• Storage and Handling Costs
• Taxes
• Insurance
• Shrinkage

The pressures for high inventories include:

• Customer Service
• Ordering Costs
• Setup Costs
• Labor and Equipment Utilization
• Transportation Costs
• Quantity Discounts

One of the inventory management tools that made an impression on my mind is the mathematical formula called Economic Order Quantity (EOQ).  The EOQ helps identify the lot size that minimizes total annual cycle-inventory holding and ordering costs.  The EOQ is based on the following assumptions:

• The demand rate for the item is constant and known with certainty.
• No constraints are placed on the size of each lot.
• The only two relevant costs are the inventory holding cost and the fixed cost per lot for ordering or setup.
• Decisions for one item can be made independently of decisions for other items.
• The lead time is constant and known with certainty.

In reality such simple situations are rare, but the EOQ is often a reasonable approximation of the reasonable lot size, even when several of the assumptions do not quite apply.  The formula for EOQ is derived using calculus.  It is the square root of the quotient 2DS/H; where D=annual demand, in units per year, and S=cost of ordering or setting up one lot, in dollars per lot, and H=cost of holding one unit in inventory for a year, often expressed as a percentage of the item's value.

My reason for such interest in the EOQ is due to a casual conversation I had with a former bishop of mine the other day.  We were both doing some service at a Bishop's Store House in Magna, a few days after I learned about EOQ in class, when my former bishop asked me what I was studying in school.  I told him about my classes.  His response regarding this operations management class surprised me.  He knew what I was talking about.  He was very interested in the subject.  I found out that he's been using the principles and techniques I've learned in class in his own career.  EOQ was the most recent thing in my mind so I mentioned it to him.  He knew all about it.  The experience impressed EOQ into my mind even more.  If I'm ever responsible for inventory, I will refer back to EOQ and other tools that I've learned in class.

Week 13 - Happy Thanksgiving!

We didn't have class this week due to the Thanksgiving break.  Happy Thanksgiving!


My Dad showed me this picture. I think it's fun!



Week 12

We didn't actually meet in class tonight because Mr. Allen had business to take care of out of town.  We still studied chapter 11 from our textbook on our own though.  Chapter 11 discusses Location.  In week 10, we covered chapter 8 on Process Layout.  This chapter is similar in that there are some mathematic equations to use for solving optimal location.  The major difference being that we are looking at building/plant/facility/warehouse location in the world versus process layout/location within a building.

Location plays a critical part in managing value chains.  Some of the dominant factors in determining where to locate manufacturing facilities include:

• Favorable Labor Climate
• Proximity to Markets
• Quality of Life
• Proximity to Suppliers and Resources
• Proximity to Parent Company's Facilities
• Utilities, Taxes, and Real Estate Costs

The factors for determining location for a service organization are the same as those for manufacturing with one important addition: the impact of location on sales and customer satisfaction.  "Customers usually care about how close a service facility is, particularly if the process requires considerable customer contact."

I've considered the possibilty of starting a small tax return preparation business.  The thought has come to mind to bring the service to the customer.  I'm sure it's not a new idea or concept.  It could save time to be in the customer's home where they keep their repository of records because sometimes people aren't sure what records to bring to the office.  Time is wasted contacting the customer for new needed information and then waiting for the new information to arrive.  Often times, multiple reminders are needed.  The customer's home would be a prime location to sit down and complete the tax return.  I only have one major reservation about the idea though--liability risk.  If my computer were to blow-up and start a fire, I would feel better about it happening to my office space versus my customer's home, etc.

Week 11

This week we learned about Lean Systems.  Our textbook defines lean systems as "operations systems that maximize the value added by each of a company's activities by paring unnecessary resources and delays from them."

Lean systems typically have the following characteristics:

• Pull Method of Work Flow
• Consistent Quality at the Source
• Small Lot Sizes
• Uniform Workstation Loads
• Standardized Components and Work Methods
• Close Supplier Ties
• Flexible Workforce
• Line Flows
• Automation,
• Five S (5S) Practices
• Preventive Maintenance

One of the things I found interesting about this chapter were the new Japanese terms I learned that the Japanese use to describe their application of lean systems principles.  One of the words I liked was "poka-yoke."  Poke-yoke are defined as mistake-proofing methods aimed at designing fail-safe systems that minimize human error.  A company could use the poke-yoke method by making different parts of the modular product in such a way that allows them to be assembled in only one way--the correct way.  I think that is such a good idea.  If I'm ever in charge of designing a modular product, I'll remember and try to apply this poke-yoke method.

The Kanban system was introduced in this chapter too.  Kanban is a Japanese word meaning "card" or "visable record."  I've heard the term  mentioned in my cost accounting class before, now I understand what it is better and that it's a word with Japanese origins.  I'm pretty sure we use a type of Kanban in our office processes of preparing tax returns.

Week 10

We took our second exam this week.  I experienced some technical issues with three of the exam questions.  The graphics didn't display properly, but Mr. Allen was very understanding and modified my test score to compensate.  They were my favorite type of problems too-Weighted-Distance Scores.

Week 9

This week we focused on Process Layout.  Our class textbook explains that layout planning "involves decisions about the physical arrangement of economic activity centers needed by a facility's various processes.  An economic activity center can be anything that consumes space...Layout has many practical and strategic implications.  Altering a layout can affect an organziation and how well it meets its competitive priorities."

Some of the ways that layout can affect an organizations and how well it meets its competitive priorities are:

• Increasing customer satisfaction and sales at a retail store
• Facilitating the flow of materials and information
• Increasing the efficient utilization of labor and equipment
• Reducing hazards to workers
• Improving employee morale
• Improving communication

Layouts are usually described as either flexible-flow, line-flow, fixed-position, or a hybrid.

One of the topics of the chapter I found interesting was the weighted-distance method, sometimes called hte load-distance method.  It's a mathematical tool that helps evaluate facility locations.  The objective is to select a layout that minimizes the total weighted distances.  I plan on trying this tool in the future.

The steps to arriving at a layout's weighted distance score are as follows:

• Calculate the distance (euclidean or rectilinear) measures between the economic centers.
• Determine the relative importance of each pair of centers being located close together.  The measure used to determine this can be a qualitative judgment on a scale from 0 to 10 or it could be the number of trips between each pair of centers per day, etc.  The number you come up with for each pair is their closeness factor or proximity score.
• Multiply the proximity scores by the distance between the centers.
• The sum of the products becomes the layout's weighted-distance score.

The problems we have done in class have been simple enough to do by hand.  There is an application that comes with the book that can help solve the problem too.  To this day, I haven't been able to get the application/add-in to work with my newer 2010 version of MS EXCEL.  I'm excited to say that I finally found an upgrade online and the system is working for me now.  I think it might be quicker to do it by hand for simple problems though.

Week 8

This week we focused on Process Performance and Quality in chapter 6 of our textbook.  I got a refresher course in some statistics tools and we watched another video about the Starwood line of hotels/resorts.  This video explored the goal of The Phoenecian, a resort in Scottsdale, Arizona, to achieve six sigma quality in their customer check-in service process, which involves other nested processes such as housecleaning.  It is often very costly to establish six sigma quality.  A six sigma quality program requires time an commitment.  The six sigma quality program was developed by Motorola and adapted by General Electric and others.

The thing that really made tonights class interesting was when my friend, Eduardo Franco leaned over and told me that all he's been dealing with at work this last week revolved around this same subject of quality.  They manufacture custom plastic bottles, etc. for shampoo, etc. where he works.   The company doesn't have a lot of extra discretionary income to use in applying a six sigma quality program, but they still want to maintain quality in the products they produce, and maintiain customer relationships. 

They've been having some bad product come through lately, and there is danger of loosing important customers.  The debate at his office is how to resolve the issue in the least costly way.  The sampling inspection process is failing them at the moment, but some say it is too costly to do a complete inspection, and it probably is.  Some say it is too costly to loose their customers due to bad products.  I'm kinda glad I'm not in Eduardo's shoes right now.  I don't think I could handle such manufacturing decision making stress.

Week 7

This week we covered chapter 5 in our textbook.  Chapter 5 focuses on Process Analysis.  There's a systematic approach to process analysis.  Our textbook breaks it down into six steps.

1. Identify Opportunities
2. Define Scope
3. Document Process
4. Evaluate Performance
5. Redesign Process
6. Implement Changes

I learned some valuable tools to assist in evaluating process performance.  A couple of my favorite tools are the checklist and the fishbone diagram (also called a cause-and-effect diagram).  The fishbone diagram helps you identify potential causes to your performance gap issue. 

I hope I remember to use this tool in my personal life when I'm trying to figure out what the causes to some of my occasional dissatisfactions are.  A visual diagram could be a useful tool.  I might discover that I haven't taken a walk in a while, or that I forgot to get on my knees and pray, or I haven't thought of another besides myself in a while, etc.  Pinpointing some of these issues can help me take appropriate action to remedy the situation.  I'll always remember what my uncle Bryan once told me..."Change what you can, except what you can't change; accept it and move on."  He wrote it on a piece of scratch paper and used the triangle symbol signifying "change."  It made a visual impression in my mind.  I have the paper still buried away in my keepsakes.

Week 6

This week we covered chapter 4 in the textbook, which by the way you can learn more information about our class textbook here.  Chapter 4 focuses on Process Strategy, "which specifies the pattern of decisions made in managing processes so that they will achieve their competitive priorities."

One of the concepts in the chapter that stuck out to me was service process structuring.  Most of my work experience has been in the service industry.  There are "three process structures, which form a continuum to choose from: (1) front office, (2) hybrid office, and (3) back office."  I started thinking about my work experiences in this matter.  I leaned over to a friend of mine in class, Eduardo Franco, and told him that I work in the front office.  Sometimes things can get a little complex and there is considerable divergence.  There are always exceptions, and  there are exceptions to the exceptions.  Sometimes this can be stressful, but sometimes it livens things up.

I've also had experience in the back office.  Processes are more standardized in the back office.  You don't necessarily have the stress of making decisions on what to do in each situation.  On the other hand, there is usually little variation and sometimes minimal contact with others, which can get boring.

When I think about my work experience I think of the adage, "The grass is always greener on the other side."  Sometimes I think to myself,  "I want to work in the back office instead of the front office, it's far less stressful."  Other times I think to myself, "I want to work in the front office where the action is, the back office is boring and makes me tired."

Taking all of this into consideration, I will seek out work in the hybrid office in the future.  As Hannah Montana says, "You get the best of both worlds."  I don't want to do quarterly performance reports though, like the example given in our textbook of a hybrid office process!

Week 4 & 5

Week 4

We studied chapter three this week, which covered Project Management.  There are a couple of things that stuck out to me in this chapter.  The first thing that stuck out to me was the idea of making sure there is cross-functional interaction in an organization’s project management when appropriate.  From the class text, “Even though a project may be under the overall purview of a single department, other departments likely should be involved.”  Each department brings a different perspective to the overall operations of the organization.  There are valuable insights to gain from all participants.

The second thing that stuck out to me, are the qualities needed in a good project manager and project team members.  A project manager must play facilitator, communicator, and decision maker.  I think this is important to remember when selecting a project manager.  One candidate for the job of project manager may be really smart, informed, competent, and dedicated to the project; but if this same candidate struggles with their communication skills or making decisions, they probably fit better as a member of the team.  They have much to offer to the project, but lack some important skills needed to manage and lead.  While some management and leadership skills can be learned and developed, some people naturally make better managers and some people are naturally better leaders.  Some people are fortunate enough to be both.  I think this is why I stepped down from middle-management before.  I am not a natural.  I have a hard time communicating with others, especially when I play the role of what I like to call “middle man.”  My thoughts are always, “Why tell me, tell them yourself.”  Another problem I run into is sometimes I get more zealous (I think that’s the correct word for it.) about a project then my peers, inevitably they all want/need me to “chillax.”  It’s not always easy for me to relax.

I’m going to definitely try to remember these points if ever I’m asked to lead or manage a project.  I will speak up and say, someone else will probably do the job better, but I’m more than happy to supply my other skills to the project such as technical competence, detail orientation, organizational and classification skills, and dedication.

A fun thing about this chapter was drawing network diagrams and calculating the earliest start, earliest finish, latest finish, and latest start times of activities in a project.

Week 5

We took our first exam this week.  It was open book and notes.  I missed one question.  I still don’t know what the correct answer is.  I’m glad it was just one I couldn’t figure out J

Week 3

This week we covered chapter 2 - Operations Strategy.  We focused a lot on competitive priorities and capabilities.  There are nine broad competitive dimensions, which fall into four groups:

• Cost
• Quality
• Time
• Flexibility

Cost basically speaks for itself.  There are two dimensions of quality- top quality, and consistent quality.  Time has three dimensions- delivery speed, on-time delivery, and development speed.  There are also three dimensions to flexibility- customization, variety, and volume flexibility.

Competitive priorities are the dimensions one aims to compete on.  Competitive capabilities are what one actually possesses and is able to deliver.  As we discussed these competitive dimensions, I was reminded of what a good friend of mine said last weekend. 

Her husband owns a small business that provides services such as embossing, piecing, gluing, and die-cutting.  I asked her about some of the local scrapbooking companies, and if they used her husband’s services.  She replied that work has been done for some of these scrapbooking companies.  I inquired as to whether a lot of these companies are going to China for manufacturing.  She replied that some of them have.  She added that sometimes these companies need something faster than what they can get through their regular manufacturing operations in China.  These companies will approach her husband for the job.  He tells them he’d be happy to help them.  They express their gratitude and add a request.  They wonder if my friend’s husband can drop the price to match what they pay through their regular operations in China.  My friend’s husband knowing his competitive capabilities, that he cannot compete on the cost, kindly replies that he understands there are three things they want- low cost, quality, and speed.  He then points out that they can have only two of these three desires at present.  They must choose between a combination of quality and speed or quality and low-cost.   Ultimately they go for the quality and speed he has to offer.  He understands that speed is what they are after right now.

I’ll try to remember this for the future when negotiating price- there are more competitive dimensions than just cost.  I won’t forget that cost is a big dimension though, and  always strive to keep my costs down.

Week 2

We discussed chapters 1 & 2 from our textbook tonight.  Chapter 1 focuses on Operations as a Competive Weapon. Chapter 2 focuses on Operations Strategy.  I really enjoyed class tonight.  We watched a video clip about Starwood Hotels that I found very enlightening.  Starwood Hotels owns at least nine different hotel brands including the Sheraton, St. Regis, Aloft, Le Meridien, and Westin.  A part of one of Starwood’s operations management processes includes seeking feedback from their clients.

 

Conferences, meetings, and special events are a big part of the company’s business offerings.  Starwood learned about the frustrations of the various meeting planner clients they work with; each hotel location had its own method of operations, causing continuous confusion.  In response, Starwood created and implemented a standard for all its brands.  Now meeting planner clients don’t have to guess what they need to do at each hotel, the process is uniform throughout.  Starwood even developed a Preferred Guest program which rewards their loyal clients.  Most importantly, Starwood set standards for itself in client feedback ratings and the company monitors the ratings very closely.

It made me take note of the customer value that can be added in providing uniform customer relations processes.  It’s all part of the brand image.  I know I would be confused if I ever walked into a Wal-Mart and there was nobody there to greet me when I walked in.

The company that I work for now does not have multiple locations.  It is a small business office with only five regular employees.  I will remember what I learned for possible future growth.

Week 1

Class started tonight.  I’m excited.  I think this will be a great class.  Tonight Mr. Allen introduced himself (nice guy), and introduced the course.  We discussed the four pillars of the Huntsman School of Business at Utah State University (Entrepreneurial Spirit, Ethical Leadership, Analytical Rigor, and Global Vision) and the connection to the course content.  I think I’ve heard about the pillars before, but this time they really made an impression on my mind.  I think they are very valuable concepts to follow in my life.

Mr. Allen has a plane.  I wonder if he was in the military to learn how to fly?  I’d like to learn to fly someday.  I took an aviation history class once at Salt Lake Community College's airport satellite.  It was very interesting.  I couldn't afford the actual flight training classes at the time. 

Mr. Allen