MGT322 – Spring 2013

Tesla Announces Another Delay for Model X

Posted on by spr1332tmckenna

 

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Tesla Motors is an electric car company based in California.  Tesla is most known for its electric sports cars, which are high performance and industry leaders in miles per charge.  While Tesla’s sports cars have been successful, the company wants to expand to the SUV/sports crossover market.  The Model X is Tesla’s attempt to enter said markets.  The Model X is fully electric crossover (between and sedan and a SUV) with a four-wheel drive system.  The Model X would allow drivers to use their electric cars in the winter unlike Tesla’s sports cars.  (Berman)

Whether or not this is a good idea for Tesla is somewhat irrelevant at this point.  Tesla initially revealed its plans for production of the Model X in February 2012, claiming production would take place close to a year later.  However, it is now 2013, and production of the Model X is still yet to begin.   It is now said that the Model X will officially begin production in 2014.  Naturally, many consumers are skeptical as to why production of the Model X is delayed. (Berman)  Shanna Hendricks, a spokeswoman for Tesla said:

“I almost have trouble calling this a delay in Model X, because that makes it sound like we’ve run into problems with Model X, and it’s taking longer than we thought, and it’s out of our control,” She then wrote wrote. “When, really, we’re consciously pushing back timing to allow ourselves to focus on its production and product enhancements in Model S (one of Tesla’s sports cars).”   (Berman)

While Hendricks claims that production has purposefully taken longer than expected, many are skeptical because Telsa had delays when releasing both of its sports cars as well.  Normally this wouldn’t be a huge deal, but Tesla requires a $5,000 initial deposit for the very basic Model X and a $40,000 deposit for the signature Model x (not including down payment).  (Berman)

With this kind of money at stake, is it a good idea for Tesla to delay production on purpose?

 

 

Works Cited

Berman, Bradely. Tesla Model X Production Won’t Start Until Late 2014. 12 March 2013. 20 May 2013 <http://wheels.blogs.nytimes.com/2013/03/12/tesla-model-x-production-wont-start-until-late-2014/>.

 

 

Two minutes, does add up

Posted on by spr1331maviles

This past week American Airlines learned that the more suitcases are hauled onto the cabin, the longer it takes to get people on board.  Passengers boarding with American Airlines with items small enough to store on the floor will now be allowed to board before passengers with large suitcases. This in turn will help reduce all the traffic of roller bags down the aisle of planes. This new change in process should help planes depart gates faster along with improve on-time arrival rate.

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Before implementing this new change, American Airlines more than likely came up with a type of process improvement model like Deming Cycle, PDCA. Plan, is the first step on the cycle, where the airline had to describe the process, define customer expectations, identify causes of problems, develop potential solutions, and finally select the most promising solution. In this case, customer expectations probably included on time arrivals to destinations.

 

The second step to the Deming Cycle requires a pilot study to test the potential solution. In the article, it is mentioned that American Airlines conducted a four-week test demonstrating the new boarding procedure and proved to cut off an average of two minutes of flight loading time. Two minutes may not sound like a lot, but as Daniel Bellavigna, supervisor of continuous improvement, says “it adds up”.

 

The third step of PDCA, check, means examining the results of the study and determining if the new process performance has improved. In American Airlines case, their four-week pilot study performance did improve. It reduced boarding time by two minutes.

 

Act, is the last step of Deming’s Cycle. In this phase, the best solution is implemented with a process to monitor process performance. The airline company implemented the new way for boarding, passengers with small carry ons to board before those with suitcases, this past Thursday, May 16.

 

Along with the PDCA cycle, the company probably also came up with a process flow diagram in order to understand their process better and to help simplify and redesign the process. This process mapping most likely helped to come to their conclusion.

 

A cause and effect diagram could have also helped American Airlines. The effect being, late arrival flights, and one of the causes being, too much time spent on boarding passengers onto the plane.

 

In March, about 20 percent of U.S. airline flights were delayed, and about 7 percent of these delays were due to late-arriving aircraft. With American Airlines new boarding plan, it is hoped to bring down the percent of delayed flights.

 

With their new boarding plan, American Airlines is making passengers with lots of luggage pay, but not only in money but also in the amount of time spent in line waiting to get on board. They hope with this new plan, passengers start to carry less in their carry ons and that other airlines start to adopt the same procedures. What other ideas would you recommend for airlines to improve on time arrivals.?

 

 

http://www.businessweek.com/articles/2013-05-17/american-airlines-doesnt-want-your-bags-in-the-cabin#r=nav-r-story

Google Wallet… The Next PayPal?

Posted on by spr1332mhanson

gmail-google-wallet (1)

PayPal is known as “the world’s most loved way to pay and get paid”… but pretty soon it may not be the only way. PayPal pretty much has the market cornered when it comes to buying and selling online, but there are some problems with it. First off, PayPal requires you to have an account. Users of other applications, such as Venmo, must have an account and download a mobile application to be able to send money.

Enter: Google, who has decided to allow users to send money via Gmail. Whether you aim to send money to a friend or conduct a business transaction, this has thepotential to drastically change the way we send and receive money online. Similar to PayPal, users will be able to link their bank accounts to Google Wallet will be able to receive payments for free, while having to pay a 2.9% transaction fee when sending money from a debit or credit card. This is a bit different from PayPal, as the transaction fee has to do more with what type of payment it is (a gift or a payment for goods), rather than the method you are using to pay.

Either way, there are more people on Gmail than any other e-mail provider globally, and there seems to be a huge market for them. The thing about PayPal is that it seems a lot of people don’t know how to use it. With this new Gmail payment system, users will be able to attach their money in an e-mail the same way they would attach a photo, video, or any other document. As the article says, “this could help give mobile payments the push they’ve needed to go from being a novelty item to part of our everyday lives.”

Google Wallet announced, two years ago, that they were not able to implement Near Field Communication Technology. They could have given up, but the company is always looking for continuous improvement. This incremental improvement could lead to something bigger one day that could change the way we pay for goods. The change from NFC Technology to this PayPal “copycat” can be compared to the activity we did in class where we were being timed to pass around the ball. After going over the time limit, we glanced at more successful groups, took some of their ideas, and added them to ours until we beat the time. It’s kind of similar to what Google is doing here.

This new system hasn’t come without criticism, though. An Australian professor has called the payment system “dangerous”, citing the fact that hackers target Android systems, making the Gmail payment system vulnerable to their attack. He says that their password protection is not enough, and a two-factor authentication system would need to be implemented (theaustralian.com.au) People’s emails are hacked all the time, so I absolutely see his point.

 

 

Do you think Google can compete with PayPal? How susceptible do you think this system will be to hackers?

 

 

Sources: http://www.forbes.com/sites/laurashin/2013/05/16/google-to-allow-gmail-users-to-send-money-via-email/

 

http://www.theaustralian.com.au/australian-it/internet-expert-brands-gmail-payments-as-dangerous/story-e6frgakx-1226645045676

Is that an ISOlated case of the flu?

Posted on by spr1332gfleytlikh

Quality management standards seem rare to come across when you look at the health system in Iowa. Specifically their hospitals. Iowa Lutheran is the first hospital in Iowa to achieve their ISO certification.

ISO 9000 standards are well known to American manufacturers as they have used ISO for quality assurance in their products. ISO gives suppliers a peace of mind that what they are receiving, follow international standards in their quality management. That means that a company’s upper management has set up a processes for all steps of their respective system. Six procedures are required by ISO; control of documents, control of quality records, internal audit, nonconforming control, corrective action, preventive action. The organization’s mission is to set standards for goods and services, ensuring efficient processes.

Iowa Lutheran Hospital

 
Iowa Lutheran Hospital

When you look at healthcare and hospitals, quality care is necessary and could be the difference between life and death. Should it be troubling that this is the first hospital in Iowa that follows ISO standards? Not necessarily. Prior to seeking ISO 9000-certification hospitals were granted certification through the Joint Commission on Accreditation of Hospitals (JCAHO). The largest and oldest accrediting organization for healthcare, they set standards for the quality and safety of health care provided to patients.

What could be the implications of switching from a healthcare specific accreditation organization to an international standard organization? Is ISO 9000 a better quality tool overall for healthcare?

According to the article, “Iowa Lutheran has implemented a quality management system that includes review of acute medical, surgical, critical care , rehabilitative, obstetrical, emergency care, laboratory and radiology services.” It is obvious to see that the hospital is striving for excellence in healthcare and providing the patients with the best services, as any hospital should. It seems to me that any hospital would have the best possible standards set in place for all their different systems. Not only does ISO set up certain guidelines, but it also allows for collaboration between members for best practices, and this is an international group. Iowa Lutheran specifically attained 9001:2008 ISO certification. It takes a process-oriented approach. The requirement ensures ‘what’ an  company must do to meet customer needs and expectations. ‘How’ this is done is left up to the company, or in this case, the hospital. Hospitals are a lucrative business in the way they charge for a doctor to visit a patient, to take and x-ray, virtually everything they do. Insurance companies, healthcare systems and providers, and pharmaceutical companies. There are so many systems, guidelines, and protocols to follow. The four sections that make up ISO 9001:2008 would really benefit a hospital and how it is run. The sections include management responsibility, resource management, product and/or service realization, and measurement, analysis and improvement.

The other metropolitan hospital in Des Moines refuses to change to ISO 9000 standards.   How else can ISO 9000 benefit hospitals?

Article: http://www.businessrecord.com/Content/Health—Wellness/Health—Wellness/Article/Iowa-Lutheran-is-first-Iowa-hospital-certified-for-quality-management/174/836/58139

Source: http://www.ada.org/2702.aspx?currentTab=2

Rugby to the NFL

Posted on by spr1332mmadrid

The NFL hopes to capitalize on New England’s strong Irish roots when it partners with Premier Rugby League to bring the London Irish to Gillette Stadium this summer. (image via S&B Media)

 

 

The NFL is hands down the most popular sport in the United States. From lucrative media contracts and billionaire dollar stadiums, the NFL is also one of the most professional and forward thinking businesses in the U.S. With that being said, as of recent the NFL has teamed up with the Premier Rugby League to create a professional rugby league here in the U.S. Accordingly, scheduling has already been made to have an exhibition game played at the New England Patriots stadium, which will be televised on the NFL Network in August.

 

Not surprisingly, rugby ranks as one of the top sports in the entire world. Seemingly crushing American football in a popularity contest. Consequently, with the heightened growth of the sport in the United States, mainly at the collegiate level, NFL management saw this as an opportunity to capitalize on the market share and potential media assets. For many, this partnership did not come as a shock because in 1970 NFL owners invested in a soccer league, which eventually grew into what is now Major League Soccer (MLS). Essentially, the MLS investment gave birth to the idea of creating this rugby league.

 

What’s even more intriguing about this is the NFL’s plan to use the empty professional stadiums not utilized during the offseason. More or less exploiting already NFL owned properties to pursue the growth of a professional league. While the NFL is by and large a mogul in the marketing department, this would be a crucial time for not only them, but management as well. The issue lies at two decisive parts, which could affect the new founded partnership. First off, management would have to ensure that the quality of play is legitimate for fans to watch. Secondly, they would have to garner television contracts with the likes of FOX and NBC so common people could watch. That being said, getting those contracts won’t be especially hard due to the NFL’s popular track record. However, by just showing rugby on the premium NFL Network channel management may lose potential fans.

 

All of the above issues can be resolved with carefully strategy planning. However, if proper steps to grow the sport are not taken than the NFL with ultimately lose the partnership and potentially the cost to its own market share. Surely then the question arises at wondering whether or not this is a step in the right direction for the NFL and Rugby. Should management have pursued this partnership instead of investing the time and money on developing a larger worldwide audience for the NFL? What other issues can you see with this partnership? In due time we will all find out if this panned out well for the NFL and rugby.

 

 

 

Source:

http://www.forbes.com/sites/jasonbelzer/2013/05/17/nfl-plays-offensive-with-move-into-rugby/

 

 

 

 

 

 

 

 

 

 

 

McDonald’s goes on a McDiet

Posted on by spr1331edanos

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Most people associate McDonalds with the traditional meat and potatoes menu that they started with, the traditional cheeseburger and french fries.  However, in recent times the Oak Brook based chain, with its 68 million daily customers in over 119 countries has expanded their menu to include items that can satisfy all different types of taste buds   By implementing these new items, like the snack wraps, angus burgers, and steak bagels  McDonalds has tried to cover all territories of the fast food market.  They have even offered rib sandwiches and the most recent offering of mighty wings (traditional chicken wings). Since 2007, McDonalds has added over 60 items to their menu.

Lately, however McDonalds has started to eliminate items off of their menu.  Starting with the Angus Burger last month, McDonalds claims that 4 more items will soon be off their menu including the Caesar salads, McSkillet Burritos, Southern Style Biscuits and steak bagels.  This is in an effort to better manage a menu that has grown in the past 7 years.

Because McDonalds is such an excellent example of quality and process management, this article serves as a good example to look at the way the McDonalds handles and controls its processes.  The traditional idea of McDonalds was that it was a company that could do the basics and do them better than anyone else meaning serve traditional Cheeseburgers and fries in a quick, clean, and friendly restaurant and atmosphere better than any of its competitors.  Clearly it has done this as it is the biggest fast food chain in the world and as a matter of necessity for an ever expanding target market, the menu has swollen to a size the original owners would have never thought.

Therein lies obvious potential problems which I believe McDonalds has realized.  By having so many different products, it becomes difficult to effectively offer the same consistent quality of all of these items across the board.  This I believe is because of the numerous different processes each different item must go through before it reaches the consumer.  This ranges from ingredient storage, cooking, preparing, and delivery.  This also can cause process variation in McDonalds training process as the menu becomes harder to master for its employees.  With new items so frequently being added, McDonalds lends itself to a host of possible errors in everyday preparation of these items to its customers.

What McDonalds is doing by reducing its menu items slowly is going back to basics somewhat.  By creating a more manageable menu, McDonalds can better focus on improving on its continued improvement of processes already associated with existing menu items.  By Improving their base menu items, McDonalds should see an increase in customer satisfaction across the multiple countries it occupies.

Do you think that eliminating the numerous menu items listed and more will help McDonalds achieve a higher quality standard for its other items and improve more so on its current operations? How else could this move help McDonalds achieve higher quality across the company.

 

Sources:

Crains ” More food disappearing from McDonalds”

http://www.chicagobusiness.com/article/20130517/BLOGS08/130519794/more-food-disappearing-from-mcdonalds-menu

” WikiPedia McDonalds”

http://en.wikipedia.org/wiki/McDonald’s

Bloomberg New “McDonalds Cutting its Menu”

http://finance.yahoo.com/news/mcdonalds-reduce-menu-bloomberg-reports-101556997.html

Business Insider “McDonalds to Start Cutting Menu Items”

http://www.businessinsider.com/mcdonalds-to-start-cutting-menu-items-2013-5

 

Higher Price Better Healthcare?

Posted on by spr1331acortez

Healthcare is one of the most talked about topics especially recently with Obama care being introduced. Most of us have yet to pay a medical bill but as we are closer to the real world we will be forced to start paying for it .If you were told that if you payed more for healthcare you would receive better quality what would you think? If you couldn’t afford it how would it make you feel to know that the wealthy would be more healthy than you? Most of us probably have never really thought about the link between cost and quality of healthcare.  Research was done on whether or not the link  existed.

healthcarePeter S. Hussey, PhD, from RAND Health, Arlington, Virginia, and colleagues conducted a systematic review of 61 studies and “found inconsistent evidence on both the direction and the magnitude of the association between health care costs and quality,” they write. “To our knowledge, there has been no previous systematic literature review of evidence on the cost–quality association in health care.” (McReady, 2012) The research  that was conducted included studies from bibliographies of selected papers, informal searches and consultations with experts. In order to assess the quality measures they used 5 categories such as structure, process, outcome, patient experience, and access. The measures of cost were put into 4 categories such as: accounting cost, charges expenditures, and a “care intensity index.

The results were that there was a link of higher cost and better quality of care. They did 61 studies and of them 21 said that their was a positive link between the two. Also, 18 of those studies showed a negative relationship and 22 showed no relationship at all. So we can assume that it is still somewhat unclear as to whether or not paying more money results in better healthcare. Still, more data is needed to come to this conclusion.

Some advice was given to physicians such as learning more about the cost and price of services that they provide.  The article also gives advice to “payers that they should reconsider the extent to which they shift financial risk onto provider organizations, and incentives for quality targets should be offered to promote processes of care that are well supported by evidence.” Lastly, the article states that everyone should participate in monitoring of care processes both  spending and clinical, as well as the patient experience and the outcomes that result for them.

Overall, this article was interesting because it allowed us to think of the results we are receiving from healthcare for how much we pay for it. I would be furious if the quality of healthcare was better if I payed more for it. Imagine all the families that can’t afford it, should we just leave them to receive less healthcare treatment? This would be horrible if it was a huge connection between the two.

http://www.medscape.com/viewarticle/776951

Can Quality be Bought?

Posted on by spr1332umoroz

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BaselWorld Video

BaselWorld is a prestigious watch show, where the world’s top watchmakers and designers present their newest models. Most of these watches, naturally, cost more than my DePaul tuition. This brings a question to my mind; does a higher price guarantee better quality? It depends how you view quality.

Most of these watches displayed in the video are designed by huge names such as Hermes, Hamilton, Bentley, and Omega. The dimension of quality that is most appropriate for these brands is the Transcendent definition. This definition means excellence. In class we discussed this in detail, stating that many people assume a certain product is of better quality just because of the name that is associated with it.

The man in this video says that the American watch brand, Hamilton, got their big break when Elvis Presley wore it. From then on they became a popular watch, which let them charge hefty prices. A standard Hamilton watch is over $1400! Now, the watch presented in the video, from the Jazzmaster collection, is special for one reason: it has a two-in-one feature, two watches that you can flip over in one overall watch. The point of this is to let the wearer match the watch to his or her mood. Does this make it a better quality watch? Not necessarily, but they are taking into consideration what some of their customers might want.

The next watch the video talked about was one made by Hermes. This was very brief because Hermes is mostly known for their scarves and handbags, but not their watches. There is nothing that distinguishes them from other cheaper watches, such as Fossil or Michael Kors, buts its name. It had a sleek finish so that it would not weigh down on the wearer’s wrist. Omega is another brand that was named which had a watch that was made of “senda” which is just another name for rose gold. The Swatch group, a company known for their quality watches, but with a more affordable price tag, developed this term.

The only watch that was really worth its expensive price tag was the Type 22. The prices weren’t listed, but this watch had chrome finishes, real Italian leather, and a special feature. In each watch there is a pendulum that swings about 28,000 times a minute, which makes its time 72 times more accurate.

I think many watches especially Hamilton, Omega and Rolex are able to have such steep price tags because their reputation, primarily, performance, service and performance, which are all important dimensions of product quality.

Based on all this information, are these watches better quality than something cheaper? If yes, is it because of the name of the maker or is it because of some features? If no, why not?

 

 

Photo source: http://gearpatrol.com/2013/05/02/best-of-baselworld-2013/

Video Source:http://live.wsj.com/video/what-makes-a-luxury-watch-worth-its-price-tag/2EBED16E-ED6F-491C-A174-5A5DAABE0F4E.html?mod=WSJ_article_outbrain&obref=obnetwork#!2EBED16E-ED6F-491C-A174-5A5DAABE0F4E

Improving the boarding process is like reinventing the wheel – it won’t work

Posted on by spr1331jdelatorre

Airlines constantly find ways to make their operations more efficient. They take action by leasing planes with high fuel efficiency, reducing airplane turn time, and in some cases, cutting an average of two minutes from a 40-45 minute boarding process for narrowbody aircraft (Reed).

American Airlines claims they found a way to cut an average of two minutes from a 40-45 minute boarding process for their narrowbody aircraft. American’s new method involves allowing passengers who are traveling light, with only a carry-on item that fits under the seat in front of them, to board early, before “group two” (Reed). American’s narrow bodies take off about 3,000 times a day, so this new boarding process can reduce a huge amount of time.

American’s new boarding method involves process management and an attempt to engage in breakthrough process improvement. Process management is planning and administering the activities – design, control, and improvement – necessary to achieve a high level of performance (Class Session 5-6). They used a Process Flow Diagram (PFD), which is one of the seven tools of quality, to easily visualize the entire boarding process and identify trouble spots. Process mapping (flowcharting), as it is called, is the use of a diagram to present the major elements of a process (Week 4). It is the ideal methodology by which to begin analyzing a process.

After American engaged in process mapping, they discovered that the current boarding process for their narrowbody aircraft can take up to 40-45 minutes. Rather than engage in incremental improvement, which is improvement implemented on a continual basis, they decided to engage in breakthrough improvement, which solves chronic problems through one-time major reengineering of change.

Virgin America tried this new boarding process for half a year. However, the results were lousy, and they eventually abandoned the new process. The new process may be more efficient, but it is very difficult to manage. For example, some passenger can abuse the loopholes, such as putting their bags in an overhead bin after they told the gate agent that they do not need one, or whether or not a carry-on is too big to place under a seat.

So if Virgin America abandoned the new boarding process, why would American follow in the same footsteps? Every airline is different. What does not work for one airline may work for another airline. America is about to become the world’s largest airline once its merger with US Airways is finalized, and its global status puts the company in the position to taking more risks. American should not engage in breakthrough improvement by radically changing their boarding process because it did not work for Virgin America, and there is a huge possibility that it will not work for American. Instead, American should engage in incremental improvement so it will not be as costly as breakthrough improvement, especially since airlines already have sky-high costs.

Do you think American should try to improve its boarding process even though the new process did not work for Virgin America, which is a very successful airline?

 

Sources:

http://www.forbes.com/sites/tedreed/2013/05/18/will-americans-new-boarding-process-work-it-failed-at-virgin-america/

If Michael Jordan can’t do it, it can’t be done!!

Posted on by spr1331pahuja
THE GOAT
THE GOAT

Every person in this world has their forte, their individual strengths that differs them from other human beings around the globe. So as a management student it is really important to use an individual’s strength in a right way. Louis Efron,the writer of this article  talks about something similar. Louis had a privilege  of working with a  certified R&D rockstar, he named him Tom but i will name him MR X.

MR X  had lead teams that  had created great revenues and sky rocketed sales for the organization. The company saw so much potential and  promise in their Superstar employee  that they put him through a top MBA program to extend his potential, resulting in him becoming the president of the organization. But, here is the twist after six months as the president, he failed miserably and resulting in declining sales and revenues and also had issues with the people in the organization. He was relieved from his duties making him unemployed.  Fortunately for him and his exceptional work he did at his previous organization,  he was hired by a competitor and soon back in work force.

But the question that arise in my mind are: How did this happen ? Was a mistake promoting him ? HOWWWWWWW?

Mr X core strengths was to inspire engineers to produce top selling products and he was really good at it but making decisions  by as  president was not his strong suit that is the reason he and company failed. The organization put him in a position, which he had no clue  about that resulted in him getting fired from his job. Every individual in this planet have an ability to do something, it is really hard fro every individual to max out or do something beyond their ability. This error is repeated time and time again by organizations around the world. Organizations, use these talented individuals and put them at a position, where their ability to perform at the same level decreases.

This was an example of just a normal human being, let me tell you a story about THE GOAT, MICHAEL JORDAN. As a Chicago native, every body knows, whether you are a basketball fan or not, about the greatnessss. After winning three finals MVP’s and three rings, he left professional basketball to play baseball for a minor league baseball in Birmingham, AL . He followed the same work ethic by working hard and practicing every day at the batting cage but he was just average batter and could not achieve the same level as he had while he was playing basketball. So, in 1995 he dropped his bat and went back to United Center. This is a perfect example of no matter how talented or hard working you are, if you are put in a wrong position, you will fail miserably and will never be able to achieve the same greatness.

A 2012 gallup study  indicated that only 50% of U.S. workers use their strengths throughout their day. So, if organizations better understand their employees strengths, they can not only maximize the employees potential but also maximize their companies potential.
AS FUTURE MANAGERS OF THE ORGANIZATION, WE SHOULD LEARN FROM THIS.