MGT301-Sum12

“Au Revoir and Auf Wiedersehen” from GM and Peugeot!

Posted on by joaquind301s12

Let’s face it. The economy is still lousy, and many companies are trying to find ways on how to reduce their costs. For General Motors and Peugeot-Citroen, it is time to restructure their operations.

“GM removed the head of its European operations, Karl-Friedrich Stracke, after just seven months on the job and replaced him with Vice Chairman Steve Girsky amid growing frustration with the pace of the turnaround at its European business, which includes the German Opel/Vauxhall unit” (Terlep). “Peugeot plans to eliminate 8,000 jobs, or 8%, of its French workforce, and stop building vehicles at one of France’s largest car factories in 2014” (Terlep).

So what exactly are GM and Peugeot restructuring? Both companies are restructuring their operations management, specifically their capacity. In class, we learned about design capacity and effective capacity. Design capacity is the maximum theoretical output of a system, whereas effective capacity is the capacity a firm expects to achieve given current operating constraints.

“About 30 of the 98 European auto-assembly plants owned by major car makers are operating below 70% of their capacity, levels that typically cause plants to run up significant losses. European auto makers have the plant capacity to make 27 million cars a year but will only make 20 million this year” (Terlep). In operations management terms, 30 of the 98 European auto-assembly plants have a design capacity of 27 million cars, but they are operating below 70% of their design capacity. Their effective capacity this year is 20 million cars.

In order for GM and Peugeot to match capacity to demand and effectively compete in the auto industry, they will have to close some of their factories and lay off thousands of their employees. The general environment and the task environment change dramatically every day. Companies who do not build for change will experience what GM and Peugeot are experiencing today. There is a lower demand for cars, and costs are skyrocketing because factories are not operating at their full design capacity.

If you were the chief operating officer at GM or Peugeot, how would you restructure your company and “build for change”?

 

*If you would like to access my article, you can click on the link below:

http://online.wsj.com/article/SB10001424052702303740704577522053739434374.html?mod=WSJ_business_whatsNews

 

BIBLIOGRAPHY

Terlep, Sharon, and Sam Schechner. “GM, Peugeot Take Aim at Europe Woes.” The Wall Street Journal. Dow Jones & Company, 12 July

2012. Web. 12 July 2012. <http://online.wsj.com/article/SB10001424052702303740704577522053739434374.html>.

 

Successful Management: How to Prosper as a Booth Manager at the Taste of Chicago

Posted on by shanat301s12

 

Taste of Chicago is an immense enterprise in the City of Chicago, and its long running history is proof of how important residents of the city find it to be.  Part  of what makes Taste so successful every year is the management staff that runs each booth.  In order to be an effective manager one must have a keen understanding and awareness of their own product, and of their audience; management that understands their product, also is able to increase their profits, by communicating to their customers a direct message and advertisement about their varying food items.

Because Taste of Chicago is centered on food, it is imperative that a manager knows proper temperatures, food preparation, and how to handle items that have been pre-made. Food preparation for booths at a festival, is greatly different than food preparation in a restaurant. A successful booth manager is one that understands the difference between working in a high volume restaurant and outside at a festival, and is someone that can translate the work inside a restaurant to outside.  For example, when working outside all day in a booth, food temperatures can become essential to the customers experience. Also, proper packaging for items is important to the comfort level of each guest. Knowing they will be walking around all day with packages in their hand is something that a manager needs to consider. If a manager communicates well with his or her staff, then they will be able to provide great service to their customers, while empowering their staff to do the same.

In business, one must know how to steadily increase the marketing of their brand; in a struggling economy it is essential to know how communicate an effective message to your customers, and it is important to have one, clear and coherent directive about their product.  One way a manager will be successful at Taste is by aggressively advertising what their food is about, and what their style of food language is. A customer intuitively recognizes when a manager cares about their product, and understands if the manager is committed to promoting their own brand.

 

A strong manager is not only able to promote their product well, and to train their staff effectively, but is also able to understand how to promote their establishment and how to be detail oriented in a fast paced and challenging environment. Were one to miss important details, such as rental fees, food prices, and inventory, they would not find success as a booth manager at Taste of Chicago.

Inside Apple’s Go-Slow Approach to Mobile Payments

Posted on by brookem301s12

Apple is starting to jump on the bandwagon and follow what Google and Microsoft have done with mobile-payments. Right now Apple is known to be on the “sidelines” of the mobile-wars because they are letting their competition do the research for them. It is stated in the article that Apple is completely comfortable being “number two” right now. Mobile payment is a way that consumers can pay for their purchases with their smart phones instead of having to carry their wallets around.

These mobile payment transactions from the smart phones are suppose to exceed $600 billion by 2016 and just this year reach $172 billion. Google first started this mobile payment, which for their Androids is called the Google Wallet. Last month Microsoft said they are going to release a digital wallet service that will store the credit card information of the handheld user and their mobile payment information. Apple will release their part for mobile payments once they research more about that market. Right now they are just using the wait and see approach. If and when Apple enters the mobile payment arena they will have an advantage over the other companies because they have sold more than 200 million iPhones. They also have 400 million credit cards registered with their apple store.

When Apple decides to launch their mobile payment application do you think they will succeed over Google and Microsoft because of their market share now?

 

 

http://online.wsj.com/article/SB10001424052702304830704577493261395358658.html?mod=WSJ_mgmt_LeftTopNews

Outsourcing in Operations Management

Posted on by irmal301s12

Modern organizations, in order to reduce operational costs and become more competitive, have designed and implemented several key strategies. One is that of outsourcing.
Through Outsourcing is contracted and delegated one or more processes, not business critical, a specialist provider, to achieve greater efficiency in carrying out the mission. Outsourcing produces multiple benefits, the most important being the following: reduced costs, reorganizing the staff structure, increase the level of working capital, improve the quality of products and services and reducing the level of business risk. It also eliminates some conflicts with the workers (with the Outsourcing the number of workers will be less), while decreasing some wasteful activities such as payroll processing.
But, as the outsourcing have advantages; it also has some drawbacks that are necessary to take into account before making a decision on its implementation. The main disadvantages are: dependence on third parties and possible loss of control, increased risk to the confidentiality level of the organization, and possible conflict with the outsourcing provider.

Therefore, it is necessary to take into account some important considerations for successful outsourcing agreement. The s most important are the following: develop appropriate agreements, taking into account the location of the service to be provided, should determine the level of technology use in the Outsourcing, check before you hire Outsourcing provider capacity to provide efficient service; include in the contract of outsourcing the relevant training to employees of the company, check the quality of the service Outsourcing, and establish the potential of vendor to support and network integration.
When management of an organization decides to use outsourcing services, you should consider what can be arranged and must not be hired by this system. In general, these activities can be contracted by Outsourcing: information technology, collections and marketing, general maintenance services of installations, consulting and training, and recruitment and settlement of payroll.
It is not recommended to hire these outsourcing activities: management of strategic planning, financial management, consulting services to senior management, control of suppliers, and quality management and the environment. These are all functions inherent to the company that cannot be delegated.
Anyway, hay otras ventajas importantes que deben ser consideradas en la contratación del Outsourcing, tales como las siguientes: disponer de más tiempo para enfocar la empresa en sus objetivos estratégicos; interactuar con empresas de clase mundial; disminuir los niveles de riesgo al poder compartirlos con terceros; mayor atención a los trabajadores de la empresa y fomento del trabajo en equipo; y requerimiento de menor espacio físico en la empresa.
Anyway, there are other important advantages that should be considered in the agreement of outsourcing, such as: more time to focus the company on its strategic objectives; interact with world class companies, reduce risk levels to be able to share with third, greater attention to company employees and promoting teamwork, and less physical space requirement in the company.

Home Depot Margins Higher Now Than Before Housing Crash – Thanks Logistics!

Posted on by kathrynb301s12
After over 30 years in business Home Depot admitted their supply chain processes were not a priority for many years. The main priority was expanding the business. When the housing market crash began in 2006 they knew they had to shift their focus. As Home Depot CEO Frank Blake explains, “A downturn is a terrible thing to waist.”

Most Home Depot stores are large warehouse stores with ample extra room for inventory and storage, but they began opening smaller stores in smaller markets that could not hold the same amount of inventory. This lead to stock-outs and unhappy customers. They realized it was time they completely changed their supply chain processes starting with centralizing operations by rebuilding their distribution process. Before 2006 only 30% of the orders were store-centric, while managers made 70% of the orders. The transportation model had its own similar shares of changes to be made. They started with the construction of 24 new rapid deployment centers located throughout the country, each would serve about 100 stores. These facilities were to be flow-through facilities for quick cross-docking and little storage. The RDCs allowed their products to be shipped with 24 hours of arrival now. Currently, one third of the RDCs are built and being used. Home Depot is already seeing the benefits.

It seems Home Depot may have chosen the perfect time for their restructuring because now that their new processes are beginning to run the housing improvement and construction markets are growing. Home depot’s margins increased 35%, net income for the fourth quarter increased 32%, and sales rose 6%. Ms. Tome, the chief financial officer of Home Depot, claims the restructuring of their supply chain processes is the reason for these large increases.

Home Depot is not only the leader in the improvement industry, but is the second largest retailer in the country, second to Wal-Mart. Can we expect to see greater growth as the last two thirds of their RDCs are implemented? How can other retailers learn from Home Depot’s changes?

http://topics.nytimes.com/top/news/business/companies/home_depot_inc/index.html

http://www.dcvelocity.com/articles/20090801verticalfocus/

Managing Hollywood

Posted on by billd301s12

The Bachelorette, Keeping Up With the Kardashians, and The Jersey Shore are names that have made it into our households throughout the years. I find it interesting that our (millennial) generation is fascinated with reality television. Do we enjoy people making fools out of themselves? Do we really believe that these are people that have it all and we should be idolizing them?

Recently I was watching a program and someone commented that being a celebrity today comes with a different status than it did ten years ago. Now we compare The Situation to Clint Eastwood, and looking at the amount of money that they are ranking in compared to one another. Every thirteen-eighteen year old girl that I have met has viciously defended The Kardashians. “They are smart businesswomen, they know how to make America happy,” one said to me. Do we need to start looking at Management differently? Our world is changing by the day, but does that mean that our management needs/focuses change as well? We see the glamorous lifestyle behind a celebrity, but is their any management skills that are needed? I’m asking this question to the class because I feel there are many opinions here. Kris Jenner has been praised by some with her superb management skills, ultimately bringing in over fifty million dollars for the Kardashian Empire in 2011. This is something that I can’t help but be jealous of? You sit around with your family, eating, drinking, and vacationing, and you become a millionaire. I was recently out to dinner with my parents and the Kardashians came up in conversation, my mother barely pronounced the name correctly. I look at my generation compared to theirs. Then again our lifestyles are different; they are focused on running and growing their businesses in the corporate field, while I am in school, learning how I will do that some day.

Managing a Celebrity could relate to managing a business. The Celebrity is the product, and you need to do whatever is necessary to make sure that everyone knows who that product is. Then the Celebrity could have endorsement deals, with fragrances. You would need to know the demand that would be needed so that the product is still being made. You need to control costs, travel, and expenses. If they are on a movie set then planning becomes a big part of the entertainment industry. It takes a specific amount of time to shoot each scene. Then you need to look at how many scenes are in the movie and accurately break up the amount of scenes with the amount of time that you have budgeted for each actor.

I’ve started to realize that celebrities are not just famous people who don’t work. Although I still think some of them are famous for no reason, they are a product from a business standpoint. Managing a product human or non, is difficult.

Am I correct on this, is it work to manage a celebrity, or is it an easy job?

Fashion Forward JCP? Haven’t Seen That in a While

Posted on by swathin301s12

The last time i shopped in JC Penney and left satisfied was when i bought eyeliner that was at a Sephora inside of a JC Penney.  To my knowledge their clothes were so kiddish that they seemed to have two little girl sections located in two different parts of the store.  Instead I went to Kohl’s, Forever 21, or Charlotte Russe.  That is where i shopped.  Recently, however, I walked into a JCP and was immediately attracted to the clothes and in my head I though “When did this happen??”  Take about taking fashion forward seriously.

The new strategy that JCP is taking seems to be working and if sustained it will keep the company growing.  Much of the new strategy has to do with the new executive, Ron Johnson.  Ron Johnson is a former executive on the Apple and Target board of directors. What he has done was bring the store back to the original saying “Giving Everyone a Square Deal”.  You can see it in everything from the new logo to the clothes that are offered at a price that seems very fair.

If the company continues it can turn the corner and possibly become an industry leader in fashion.  I wonder what other Clothings stores can benefit from a little bit of an improvement.

What’s In Your Bag?

Posted on by nathanl301s12

 

Golf, one of the greatest games ever invented; enjoyed by millions of people across the world. With advancements in technology and designs, golf clubs have evolved into complex equipment that was completely unimaginable in just a few decades ago. Twenty years ago golfers would go to the store and purchase a set of clubs that feels good to them. These clubs were put together on an assembly line through the use of a product focus strategy that yielded high volume and low variety. As the game evolves over the past couple of decades so have the taste of golfers and the production process of golf clubs manufacturers.

 

Got Ping!

Founded in 1959, Ping Golf has become a powerhouse in the golf industry. They are well recognized by their innovation in custom club making. When Ping introduced their fitting system 10 years ago, they offered golfers with custom made clubs based on their physique and swing type. This was made possible by utilizing a repetitive focus strategy in their production process. Ping would make different clubheads with various lie angle and offset, shaft with different length and flexibility, and grips of different diameters. By measuring a golfer’s physique and analysis his swing, Ping is able to use the data to create a unique set of clubs by combining various components already manufactured. Ping’s production process is similar to that of Harley Davidson, where modules are combined to form many output options. Although Ping’s production process costs more than the traditional continuous flow process, it gives them a competitive advantage that is well worth.

Click here for more information on Ping’s fitting system: http://www.ping.com/fitting/5steps.aspx

 

Is not your daddy’s old club!

As other manufacturers try to gain competitive advantage in customization, a new evolution in club making has begun. TaylorMade just launched their new R-series driver, which embodies full customization while maintaining a low cost continuous flow production process. The R11S Driver offers loft, clubface, and center of gravity adjustments by having tuning devices build within the clubhead. This innovated design allows golfers to adjust the club to a specification suitable for them, and changes to previously set specification can be made again at any time. In terms of production process, TaylorMade only has to manufacture one type of clubhead, which greatly reduce production cost. Of course, the production of such elaborate clubhead requires additional research and development, and the cost of each clubhead is more than the traditional non-adjustable clubhead. But in the long-run, utilizing a continuous flow process will be less expensive in meeting market demand of customization.

Click here for more information on TaylorMade R11 Series Driver: http://taylormadegolf.com/taylormade/R11S-Driver/DW-JN721,default,pd.html?start=1&cgid=taylormade-drivers-r11s

 

The R11 series by TaylorMade is a great example of achieving customization while maintaining a low cost continuous flow production process. Do you know any products that can also do that?

 

 

Works Cited

Ping. (2012, 07 09). Custom Fitting. Retrieved from Ping Golf: http://www.ping.com/fitting/default.aspx

TaylorMade. (2012, 07 09). R11S Driver. Retrieved from TaylorMade Golf: http://taylormadegolf.com/taylormade/R11S-Driver/DW-JN721,default,pd.html?start=1&cgid=taylormade-drivers-r11s

 

Whole Foods Taking Over

Posted on by jamesonh301s12

Whole foods is probably the most well known company for selling organic products.  The companies strategy of selling natural foods has paid off and they have grown into an impressive organization.  The company is growing so large that it has been looking for smaller organic only companies to acquire.  Whole Foods recently had a merger with Wild Oates, a competing organic only store.  Although this may be a good thing for whole foods and advocates of all natural diets, it may hurt the farmers that have been supplying the smaller stores.  Because of Whole Food’s rapid growth they plan to consolidate their suppliers so that their supply chain will be more efficient.  This will mean that some of the farmers providing organic products will be dropped and they will not have another market to supply.  This would be very costly to these farmers because they most likely have dedicated much of their lives to their farm and a career change may not be an option.  Many people support organic products not only for the health benefits, but also for the benefit that it provides to small farms.  It makes them feel good to know exactly where their food came from and grew it.  They also feel good that they are contributing to the farmers livelihood.  Organizations like the Organic Monitor are worried that the lack of competition that whole foods faces will mean that many farmers may be out of work.

http://grist.org/article/the-whole-foods-behemoth/

http://www.organicmonitor.com/

Instead of maintaining the many relationships that they now have with suppliers, whole foods wants to stream line and go with a few long term suppliers.  The fewer competitors that Whole Foods has the more power they have to choose who they buy from.  If they think a farmers prices are too high then they can just move on to the next farmer.  That farmer will have no one to sell to and other farmers will be competing for whole foods business.  Advocates of organic food are concerned that Whole Foods is monopolizing the natural foods market.  They are worried about the effect on the suppliers and also about smaller organic food stores. Whole Foods’ strategy may ultimately lower the price of organic foods and make it more widely available.  The could mean that it may be beneficial as a whole for our country, but it may hurt some smaller communities.  Would it be worth sacrificing some farms to make organic food more affordable and accessible? How could Whole Foods make their supply chains more efficient while still maintaining all of it current suppliers?  Would the opening of more organic food stores solve this problem by increasing competition for suppliers? Could the consolidation of suppliers compromise the quality of organic products or would it make them more reliable?

JetBlue Valentine’s Day Breakup

Posted on by jamellea301s12

 

Valentine’s Day, 2007, a winter ice storm hit New York. Weather conditions were being predicted to cease and people continued about their travel day to John F. Kennedy airport. The conditions never cleared and and many passengers waited for up to 6 hours to return to an open gate traveling in. That day only 17 of the 156 flights left which left many passengers frustrated, furious, and stranded. It seemed to be a disaster for management who was trying to figure out what to do. Even pilots, flight attendants, and staff from the airport who were staying in the in NY wanted to help but there was no direction as to what management was going to do.

Eventually management had decided to give their passengers who waited more than 3 hours full refunds and a free voucher for a round trip flight. They also issued the Customer Bill of Rights which offers explicit compensation for passengers who involuntarily have to take a different flight.

Overall, I think that what JetBlue could have done was perhaps have an emergency backup plan when weather conditions do not cease. It is always extremely important to have a backup plan just in case the unfortunate happens. JetBlue publicly apologized for the mishap and it seemed to be made a bigger deal than it actually was. Yes, weather conditions and delays happen. However, if they publicly apologized and had a compensation system in place it would have been significantly cheaper for them.

If you were a manager of JetBlue, what are your ideas and strategies into dealing with the mishap?

http://hbswk.hbs.edu/item/5880.html