FORD is really “Shifting into Gear!”

Recently, Ford Motor Company has a announced they are putting a greater focus on their SUV and crossover cars to prepare for the future. You might ask, why? Well according to forecasts by IHS Automotive, one in five cars sold around the world annually in 2018 will be either a SUV or crossover. There is about 14 million vehicles sold world wide annually and a specific model taking up 20% of an entire market is a very large number.

Now after reading this article, I almost felt like I was ready the weekly courier, and analyzing the market conditions report from our simulation. Its really remarkable how this article pertains to the methods and leanings of the game we played in class.


Ford’s SUV and crossover sales were up 37%, which also outpaced the industry increase of 17%. This is exactly what we tracked in the statistics segment of the segment analysis. Ford is clearly putting a focus on a specific segment of the market, or in our game “product type.” The amount of models of SUVs and crossovers has risen from 180 to 370 from 2000 to the current day. This market is becoming very competitive and in the simulation we would have to go into R&D and tweak our product to become better and have an edge. We would also encounter situations where we would have to buy more capacity in our plant to account for higher demand. Ford is doing exactly this. The article states, “…Where it is spending $700 million to expand.” Ford has announced it will continue producing their crossover product, The “Edge”, and expand its production capacity by spending $700 million dollars in Oakville, Ontario where the car is produced. Ford ships this model to over 60 countries, which obviously can be concluded the demand is very high. This scenario right here is exactly like the decisions we had to make within the simulation, adjusting capacity to meet demand and forecasts, along with the segment demand fluctuations.

Just to show exactly how intense this increase in market demand for these SUV’s and midsized crossover is, utility cars sales grew 10% and crossover sales grew 16% last year totaling about 2.2 million units…but that’s just in North America! In 2000 1.8 million units of utility vehicles were sold outside North America, today that number is now 10 million!

Obviously the future of the automotive industry is leaning in a specific direction. I think it is very interesting to see how Ford Motor Company is planning all of this now, and how closely this scenario relates to our simulation. How do you think this market preference for SUV’s and crossovers will affect the industry as a whole? Do you think this will create entry points for new automotive companies? What do you think will happen to all the inventory of the less preferred sedan and cope model type of cars?

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-Evan Meador

How to know you’re doomed! (Not just for the nerds.)

Computerworld published a list: “11 signs your IT project is doomed”. Linked here. Interestingly, all 11 apply to normal-world projects as well. I may be biased because I have had my fair share of IT projects. My experience has been that most of them fail because of “Red Flag #4: Users have had little/no early involvement”. Around my parts, our IT department tries to solve problems we don’t have with solutions we don’t need. Lately I have spent hours in meetings sorting out the misdirection and miscommunication months after implementation has gone awry! In a parallel world, I have also been in a lot of meetings with Customers and Sales folks sorting out project details. My exact words in many of these meetings, “Guys, we cannot deliver it in the time-frame you are asking. Why did you sell that without asking me first, I need another 2 months before we even started.”

How many of these sound familiar to you Project Managers? Has your project…

  • Started without Sr. Management approval?
  • Started without a detailed project plan
  • Had Project Meetings scheduled without the key players involved (ignoring scheduling conflicts)
  • Had End Users not involved in project definition
  • Used minimum specifications as the project requirements
  • Tested as an afterthought
  • Never put a recovery (risk) plan is in place
  • Taken expert input and simplified/tweaked without understanding outcome
  • Committed to a Go-live/deliverable date that is on is on a holiday / vacation day / unrealistic time-frame

If you can say that one or more of these look familiar, there is a good chance that your project is going to struggle if it hasn’t already. But why?

I really want to answer ‘why’ with a simplified summary… but I don’t think that I can. Project Management has been the most difficult and yet most rewarding task that I have ever faced in my career. There is an incredible amount of complexity involve in any given project, with thousands of unknowns and an infinite number of outcomes. There is not one solution, there is no single answer. Project Management (IT or otherwise) is as complex as it is fluid. As a result there is no simple summary of what to do right.

That said; there are solutions and there are proven ways to work through the complex problems. There are best practices that each of us can apply to our field, there are take-aways and lessons learned. In my world, we have Lean/Six-Sigma. It’s not the end-all-be-all solution, but it could address many of the ‘red flags’ that the Computerworld article lists out. The five steps below are the standard steps which address many of the above issues:


Following a rigid process blindly is a waste of time, but following a broad and robust process intelligently can save time, money and headache. What do you think of these ‘red-flags’? Do they sound familiar? How have you addressed or avoided them in your experience?



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Mobile Age – Take it or leave it.

Mobile Age – Take it or leave it.

One of the things I have noticed recently is how everything is shifting to mobile. The younger generations don’t even know how to use any other device to communicate outside their cell phone or other hand held devices. Base on a post by Stephen Pierzchala on January 15, 2013, titled Mobile Commerce Has Come of Age. Are You Ready? It is obvious that there is a paradigm shift to mobile devices for personal use and commerce. Which made me think if there will be more mobile projects targeting mobile users of all ages. The mobile apps in the US have doubled in the past years. Stephen Pierzhala noted that “Mobile is the fastest-growing segment of the online commerce world”.


mobile                              gsma1

Figure 1.                                                                                                            Figure 2

This fact is backed up the Global Association of Mobiles companies (GMSA). See the figure below. Universities lecture are available online. Many students are used to listening to class lectures on their mobile device. There are several factors leading to this growth. There are so many apps for mobile devices. Almost all major banks, insurance companies and supermarkets have a mobile app to buy products and/or services online.

The cultural shift to mobile life style is global in nature but not at the same rate globally. The US is leading the paradigm shift followed by Europe. In the 2013 report by GSMA (link 2 below) shows that mobile wireless data use per connection in the U.S. is significantly higher than in the EU. In 2013, Cisco projects U.S. customers will use nearly twice as much data per connection as customers in the EU. Figure 3 in this blog show how much data US mobile consumers are using compare to European mobile consumer.


The mobile space will continue to grow there are endless providers of mobile devices and services. One of the major problems is the quality of service. The mobile space quality of service varies from one provider to another, even within the US which has the highest rating globally. Mobile users in the US still complain about poor quality of service depending on where you are located. While the mobile industry has grown significantly especially with products such as I-Phone, I-pad, etc, there are still room for a lot of improvement. With respect to project management it is interesting to know which of the project management principles or philosophy will not work very well when developing mobile products, applications (apps), or services. I have seen many DePaul students especially the undergrad playing video games on their mobile devices. Which make me to also wonder the type of problems these mobile devices introduces to our society and what educational project will be needed to build awareness against the dangers it poses. I believe don’t text while driving is clearly established as an example. ATT has developed an app to solve this problem see reference 4.




Tesla: Creating a revolution in the luxury car industry

If you are somewhat familiar even a little bit about stocks and have an interest in investing, you probably have heard about the recent boom of Tesla Motors (NASDAQ: TSLA) stock. Recently, the stock went as high as $110 a share; this was a 103% increase over a one month period and a 247% increase over a 3 month period.Source: AutoBlog

So you may be thinking, what caused this sudden increase and growth? Tesla stock first jumped 31% on May 8th when it announced its First Quarter sales to be $562 Million and recorded  first quarterly profit in its 10-year history of $15 million.  In a letter to shareholders, CEO Elon Musk mentioned that Tesla delivered 4,900 electric vehicles as well as other important figures. One of them being that their gross margin doubled from 2012 to 17 percent. This was made possible due to better use of raw materials, smarter inventory management, and a reduction in the hours required to build each car by 40 percent over the quarter.

In the first quarter of the year, Tesla delivered more than 4,750 Model S vehicles in the US which when compared to the more traditional luxury car brands such as BMW 7-series and Mercedes S Class, is much higher. BMW sold 2,338 7-Series models in the first quarter while Mercedes sold 3,077 S-Class models. The demand for their most popular model, Model S, is projected to be around 20,000 units per year in North America and in Europe, the current order rate is 200 per week. In order to meet these demands, they have added some changes to their manufacturing process which should drive margins higher.

Some of these changes include:

(1) a reduction in temp workers since the beginning of the      year

(2) increased efficiencies and reduced scrappage both at supplier and in-house production sites

(3) a streamlining of operations leading to a further reduction in full time employee man-hours from 60-70hrs/week previously to 40-50 hrs/week currently

(4) a significant improvement in logistics costs.


Currently their body assembly and finished assembly are still running on a 2 shift basis so the main goal of the production team right now is to get production levels of 20,000 on a single shift across most processes.

With the Tesla Model S being a luxury car and priced at $62,400, I feel that its affordable and much better then other cars. Do you see Tesla continuing to be as successful as they are now and do you think their stock price will continue to go up as it is now? As I mentioned earlier, they out sold Mercedes and BMW luxury models, do you think that will continue to happen in the future as well? What would you rather have, Tesla or other traditional luxury car models?

Changing the Gaming Landscape


Recently Microsoft announced their newest version of its Xbox series, the Xbox One. The Xbox has been one of the most profitable products for the Microsoft in the last decade and with Xbox One Microsoft hopes to continue that tradition. When Xbox 360 was last released around eight years ago there were no iPads; we still had smart phones with keyboards and the smart phone app stores were still in there initial phase. But a lot has changed in the last eight years; today games can be played from virtually anywhere and on any device with everyone online.

Because of the rise in the mobile gaming and its low prices, gaming systems like Xbox, Play-Stations, Nintendo has started seeing decline in their sales.  According to a report released by a leading technology research firm IDC, they concluded that paying for games on smart-phones and tablets would outpace paid gaming on portable video game hand-held devices by the end of the year. According to Nick Wingfield’s article in the New York Times U.S retail sales of game hardware and software fell by 25 percent to $495.2 million in April from $657.3 million earlier last year. This means that more and more people prefer mobile gaming rather then the old traditional gaming methods. This also proves that the life cycle for these gaming consoles will be cut short drastically unless they innovate their products for more use then just gaming.

So to keep up in the race, companies like Microsoft has started innovating their gaming consoles into more useful ways. Microsoft noted saying that they want to see their Xbox product as a more useful tool in peoples living room then just for gaming purposes. So to achieve this they want the Microsoft’s technology to take the center stage of a home entertainment system, which would end up giving people access to online videos. Apart from that Microsoft is also planning to develop its own original live-action television series that would be accessible through the Xbox. To stay ahead of the competition and to stay in the market they are also working with National Football League to develop an app for Xbox that would let players interact with their fantasy football teams while watching the live game.

From all this innovation that Microsoft is bringing in to the new Xbox, it is clearly evident that they are trying to do more with their consoles then just using them for gaming purposes.

Surely technology has come way forward then it was then Microsoft’s earlier product was launched eight years ago but do you think that will this affect the products life cycle? Will the mobile industry have drastic effect to gaming hardware systems like the Xbox, Nintendo, or PlayStation? Will innovation in their product similarly to what Microsoft has done will help them stay survive for a long time as it previous products?



Microsoft’s Xbox One gaming console.

(Credit: James Martin/CNET)


Find a Beauty Expert at Your Local Target!

Generic beauty-products2Target is one of our go-to stores when we are in need of practically anything you can think of-a hair brush, a summer dress, groceries, a plasma tv, makeup, face cleansers and much more. Recently, an article in the Chicago Tribune reported that Target would soon be expanding its “beauty concierge” within the Chicago area. The company’s goal is to expand this program from 28 to 44 stores. The uniqueness of this program is that associates are dressed in black aprons equipped with iPads, as well as mirrors and product samples to provide shoppers with guidance and expertise when they are browsing through the aisles of the beauty section looking for beauty products. According to this article, Chicago was selected as the test market for this program due to its shopping population. Specific locations Target is hoping to expand this program include Cicero, Vernon Hills and West Schaumburg while shutting the program in other locations such as Palatine, Bedford Park, Joliet, Villa Park, Oswego, Plainfield, North Aurora and Romeoville. Further, Target is also expected to expand its program into three additional markets: Los Angeles/Orange County, Minneapolis and Washington, D.C

The implementation of Target’s Beauty Concierge program is part of a trend in the beauty industry in which department stores and specialty retailers are helping and giving customers the opportunity to try their products before buying them. Since the skin care market grew 10 percent in 2012, Target is anticipating this program to boost sales. This new personalized beauty service is allowing Target not only to compete with stores such as Walgreens, who offers most of these products, but also to beauty retailers such as Sephora and Ulta Beauty. Hana Ben-Shabat, a partner at a global management consulting group commented on Target’s strategy by saying that at the end of the day fashion is a product and department stores are competing with beauty retailers and vice versa.

Operation managers at Target are certainly trying to keep up with the industry by coming up with these unique strategies. I think that the implementation of this new service can be a great success in very populated Target stores across the city, for example in downtown Chicago.  As this program matures, I think Target will gain a competitive advantage over other popular department stores such as Wal-Mart, Walgreens and CVS. The success of this program will largely be dependent on the type of associates that are being hired and the level of training they receive. Customers nowadays are always looking for advice when they are shopping for products, especially make up because not everyone is a beauty expert. Having someone to help you choose which specific foundation matches your skin, which mascara would help your lashes stand out, or which lipstick would look nice with an outfit, is certainly a service customers will appreciate. In my perspective, operation managers should place great emphasis on the increase of sales from beauty products to ensure that this project is being managed efficiently and can perhaps be used as a basis to provide a reasonable forecast to other Target stores across the nation.

What is your opinion? Do you think this program would attract more customers?,0,7813736.story

Hog-wild for Factory Farming: Hot Dogs Made in China

As the Chinese population and economy continue to grow, safer and more efficient industrialization practices are necessary to keep up with the demands of a hot dog hungry China. This is not an exaggeration as China is “the world’s largest consumer of pork.” A recent takeover of Smithfield Foods by Shuanghui Holdings Ltd., “China’s biggest meat processor,” will provide valuable insight into industry practices that are commonplace in the U.S. Current processing methods in China lack quality control as the majority of meat is produced by small farms that process less than 500 hogs per year.

From Hog to HotdogThese “conditions on smaller farms can be squalid, with a lot of physical contact between farmers and animals, which can transmit disease.” This type of environment can become a breeding ground for contamination leading to outbreaks of diseases like swine flu and foot-and-mouth disease, having major health implications on Chinese consumers. Authorities blame irresponsible farming practices and the disjointed meat processing system that is not easy to “regulate and makes it more difficult to avoid bad practices.”

In contrast, the highly sophisticated and streamlined systems of pork production in the U.S. is often viewed negatively by Americans and referred to as “factory farming.” Smithfield’s facilities have the “capacity to slaughter as many as 110,000 hogs a day,” and most U.S. farms are much larger than their Chinese counterparts, raising over 2,000 hogs annually. Ironically, these modern processing techniques are the envy of Chinese authorities who are looking to utilize the “expertise of Smithfield’s management team to enhance its pork-processing facilities.” Skeptics claim that the Shuanghi-Smithfield partnership “will exacerbate such problems as complex supply chains and food-contamination risks.”

Although the trend in U.S. agriculture is to go “back to the start” as expressed in marketing campaigns by environmentally conscious companies like Chipotle Mexican Grill, this is not the reality in China. As health out-breaks are more widespread in this Asian country and regulation lacking, efforts to “control food safety” and create more modernized processing methods are a welcomed site.

In such an industry, operational expertise will prove essential in restructuring the pork processing system in China. They will likely face challenges like determining adequate process and capacity design for farming facilities and distribution channels; forecasting to meet the demands of a growing population; Slaughter Pigs in Chinaand improving inefficient and broken supply chains. Improved product quality will likely be most prominent and follow a manufacturing-based definition as increased standards will ensure a safer finished product.

On a personal note, I am an advocate for more naturally produced food in smaller farming environments, yet I understand that the demands and current conditions in China are quite different from the U.S. All criticism aside, the majority of the U.S. population relies on the safe meat supply provided by corporations like Smithfield to ensure peace-of-mind at the dinner table. How do you think that the new deal between Shuanghi and Smithfield will impact Chinese and U.S. consumers, respectively. Will the Chinese citizens have a similar sentiment toward industrialized farming practices in future decades?

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Domestic Flight Leaders Only

The airline carrier line of business has been a very popular topic in the last few years.  Many changes have taken place such as bigger and better planes, new competitors, mergers, and some not so good news.  The U.S. carriers have been dropping in their ranking internationally over the last several years.  Asian and Middle Eastern competitors have been dominating the international market.  However, it was recently noted that the U.S. seems to be switching its gears and is taking a position to head into the international game stronger than it ever has.  The bigger U.S. carriers have closed their mergers and have adjusted their managerial approach and are on the rise again.

While all of these mergers were going on with the U.S. carriers, Asia and the Middle-East took advantage of the time to take over the international air traffic.  Both Asian and Middle-Eastern airlines dominated the international markets while all of this was going on in the U.S.  Also because of all of the mergers that the U.S. carriers have been going through, it has been noted that they have fallen a bit behind on the aircrafts they are using although this may be changing quickly with Boeings new product.

The chart below shows the ranking of airlines done by the World Airline Awards.  The first U.S. airline in the ranking was Virgin America ranked 26th.








Qatar Airways



Garuda Indonesia



Asiana Airlines



Virgin Australia



Singapore Airlines






Cathay Pacific Airways






ANA All Nippon Airways



Qantas Airways



Etihad Airways



Korean Air



Turkish Airlines



Air New Zealand






Swiss Int’l Air Lines



Thai Airways International



Air Canada



Malaysia Airlines



Hainan Airlines


The issue now is for the U.S. to enter the international market and make its presence known.  Latin America and Africa both had an increase in demand for air traffic but the U.S. missed the opportunity to enter the market during that team.  It seems that with all of the upgrades to the U.S. carriers, they should be able to hit the international market much more effectively the next time an opportunity like that arises.  It would be interesting to see how the U.S. carriers choose to enter the international market considering the different routes they can take to do it.  One of their many options is to rush into the situation to try and make an impact as soon as possible.  The concern with this is that they may try to cut corners to enter the market quicker.  This type of strategy usually comes at the cost of the customer.  Another option they have is to upgrade their fleets and then enter the market.  The downfall with this is time.  While they are upgrading their fleets, other international carriers may be upgrading their own fleets and pulling farther ahead which would make it more difficult for the U.S. to enter later.  They would also have to take into consideration the opportunity cost of taking an even longer time than they already have been.

If you were a U.S. carrier, what strategy would you use to enter the international market?  This does not have to be one of the methods listed above and can be your own idea.

Would you even consider waiting any longer to enter the market considering the state of carriers currently?

It’s Amazing What Soup Can Do!


CAMPBELLCampbell’s Soup Co. is the leading maker and marketer of soup. But for two straight years, the soup business was struggling, alerting the stakeholders about the possibility of its fate to collapse. However, this past year, Campbell has featured its new skillet sauces line in hopes that it can expand out the dinner segment in 2014.  Denise Morrison, the president and chief executive officer explained that even though it is difficult to create new market segments, she is confident that Campbell’s Skillet Sauces is a “break-through” concept that has a “high potential for reward.” As a result, Campbell Soup Co. has seen the U.S soup business stabilize after the sales dramatically increased by 14%.

Campbell is currently collaborating with its customer base to create an entirely new category of “unique, convenient and versatile” dinner sauces, while experimenting with existing soups to improve taste. This would be an example of product design. Furthermore, Campbell took the process a step further and came up with an innovated product featuring soup in pouches that attract younger and more affluent consumers. Campbell’s competitive advantage over its competitors is its brand name which consumers keep coming back for more. The soup giant has built its brand name upon its Simple Meals platform featuring the popular Go Soup. In addition to the new dinner sauces, Campbell has announced it would be launching the Campbell’s Slow Cooker Sauces.

Despite its recent success, Campbell faced a problem with the product’s location placement and shelving; but the company said it has found the best way to shelve. However, Campbell continues to struggle in two categories which are U.S. beverages and North America Food service.  The self stable juice category sales have been declining due to overwhelming competition against Campbell’s V8 V-Fusion line and decreasing demand from restaurants. Ms. Morrison proposed a solution to this dilemma, by planning to apply the exact business model for its soup business to its beverage business. The plan consists of improving the taste of its existing vegetable juice while adding new products such as V8 energy drinks to attract a more diverse consumer base.

Most importantly, Campbell’s optimistic future is emphasized on management’s attention to the basics and expansion in faster-growing segments. For example, the V8 is considered a strong brand with high benefits such as promoting health, so Campbell’s management team is figuring out ways to improve its product. Campbell has invested in a new manufacturing line to increase the capacity of creating fresh soup to tackle the issue of structural changes in the food service sector. Campbell’s simple business strategy which is to keep costs low while improving its quality has proven to be successful in achieving its short term goals as well as laying a foundation for its long term goals.

If you have ever bought a Campbell product or is an avid consumer of Campbell, what made you choose their products?

Do you think that Campbell’s expansion of new products will maintain or increase its sales and revenue?


Flying Through Quality

Boeing 787 (Google Images)

Quality is an important factor when producing goods and services. Each organization sets its own quality standards based on customers’ demands and needs. If we look at quality from the customers’ perspective we will want to have products that we can rely on when using them, otherwise if the product is defective we might want to stop using it. On the manufacturers’ perspective if the customers are unsure of quality on their products, it is their job to make the necessary adjustments to make the product attractive to the customer again.  When the situation is created by defect on fabrication it can mean big amount of money losses for the manufacturer, therefore it should work on fixing the defects as soon as these are detected in order to avoid bigger losses and not get their reputation hurt.


An example of a company restoring confidence in its product is Boeing and the battery problems that its passenger jet 787s has been facing since January and that it cost them to stop flying them. According to an article in the New York Times by Christopher Drew and Jad Mouawad, the Federal Aviation Administration approved in April the company’s plan to fix the batteries of 50 jets that where delivered at that time. The authors explain that the lithium-ion batteries problems were detected when two of them had overheated in two different jets. As soon as the problem was detected its engineers worked on finding the causes of the defective batteries and the best approach to fix it. Collection of data was necessary to support the changes and come up with a plan.  Luckily, the 800 orders that were already planned for the plane were not affected, the authors explain, since it promised a 20 percent fuel savings. After collecting data and analyzing it, the company decided to send several technicians around the world to fix the batteries and install the new system which includes better insulation and other features to prevent batteries incidents (Drew and Mouawad). The article goes on by explaining that even after this efforts by the company to fix the problem, Japanese airlines have asked for more assurance that the incidents will not be likely to happen again or at least detected by introducing monitoring systems for the batteries that would send information about the batteries conditions and replacement of them every certain time period. All this efforts are done in order to recover the customer’s confidence.

We can see in this example how a defect might represents serious consequences in the company’s reputation and generate monetary losses. This illustrates the importance of having systems that monitor the quality and processes on production and if problems are presented look for the causes and fix them as soon as possible.

Do you think Boeing’s approach to solve the problem was appropriate? Should the company provide monitoring systems that Japanese airlines demand or do you think is enough just by replacing the batteries and the insulation system implemented?