Trek Bicycle: How PM software can change an entire company

Trek Bicycle Corporation is a major multinational bicycle manufacture based in Waterloo, Wisconsin. Up until recently, different divisions used varying software programs and communication styles to perform its project management. This lead to constant delays in getting new products to market as well as missed sales due to stocking out at key times. When Kris Lamp took on the newly created position of program manager, she initiated a search for a unified project management software suite. There was a clear organizational need for a product that would allow for seamless communication amongst divisions around the globe.

The company chose AtTask (which in early 2015 rebranded as Workfront) as their Enterprise PMIS solution. Under Lamp’s guidance, the implementation was kept simple. They opted for a software-as-a-service (SaaS) model, which transferred the support risks onto the vendor. Also, the company opted for minimal customization to the PMIS and chose to implement the rollout to one group at a time. This slow start allowed for the project team to work out any issues as they came up and before larger scale implementations. This mitigated the risk of project failure by starting simple and allowing time in the schedule for early rework.

Trek and the PMIS project management team heavily relied on management buy-in to help with employee adoption of the new system. Because the PMIS was eventually rolled out company-wide in many different countries, the project management team utilized local managers to encourage and/or mandate employees to adopt the new PMIS. In return, the PMIS project team kept manager notified of changes far in advance and conveyed why and how the changes would happen. The overall consensus from employees was that the PMIS not only helped with daily work, but also helped them feel more connected with the company’s work.

The PMIS implementation was almost immediately considered a success. End-user buy-in was high and due to their slow but steady implementation, they were able to begin to introduce customization. On-time delivery rates improved 20 percent, which directly benefited the bottom line.   A few years after implementation, 800 projects were being managed using the PMIS. These projects were being managed much more smoothly than far fewer projects the company had prior to the implementation.

Lamp credits the PMIS’s implementation success to decisions made early on by the project team. Choosing a vendor that had an off-the-shelf product that fit most of their needs and was able to provide support alleviated much of the early risk of failure. By using a slow and careful implementation, group by group, change requests were minimal and easy to handle. Most importantly, the team was sure to provide ample advanced communication to managers about the software. This allowed managers to educate employees on why the change was happening and why it was so important to the company. Overall, the PMIS took Trek’s project management from an ineffective and redundant process that frequently went over schedule and budget, to a transparent and seamless linking of divisions.

Does your company utilize a PM software suite?  If so, which product do they use and what is your opinion of it?

Overby, S. (2014) Trek Bicycle Rides Project Management Tool to Efficiency. CIO Magazine, retrieved 7/23/15 from

Set-Back for Honda due to Recalls

The CEO of Honda Motors, Takanobu Ito states that due to the several recalls identified in recent Honda cars will cause a set-back to reach the company’s goal of selling 6 million vehicles a year worldwide by March 2017.

Honda has recalled the redesigned Fit subcompact vehicle 5 times in Japan for various issues since it went into the market in September 2013.
The CEO had to take a 20% pay cut for 3 months because of this.

Honda Recall

Due to the repeated recalls, Honda was forced to push back some of the product launches.Honda has recalled nearly 10 million vehicles globally since 2008.  The recalls have prompted Honda to set back vehicle launches including the Honda Legend which is already sold in the U.S. as the Acura RLX. Safety recalls include air bags on Honda cars to have caused deaths and injuries. The CEO said that it’s “painful” to think that the airbags have caused deaths and injuries.

This relates back to  our management class we can connect this to how their is an obvious issue in their supply- chain management process. It seems that if they keeping having these recalls, and the CEO is taking a pay cut makes it evident to us how there is something wrong in their process of building these vehicles. Honda needs to reevaluate their supply-chain process to catch what they are doing wrong in production of these vehicles that is causing this large amount of recalls on vehicles. As an owner of a Honda, I believe Honda should make this issue a priority to fix as soon as possible to save their reputation along with customers. Especially if they have recalled nearly 10 million vehicles globally since 2008, this is something big because it involves safety.

It can be assumed that Honda is not really making their vehicles as safe because the massive amount of recalls and this is one of the main reasons they are set-back on reaching their company goals.  Some questions to think of about Honda :

Do you think Honda should reevaluate their production process?

Can the management do things differently in their current supply-chain process to prevent recalls?



The Chipotle of Pizza

The Chipotle of Pizza

Blaze Pizza assembly line

Look Familiar? Well, it’s no accident. Just when you thought you couldn’t be exposed to anymore of it, Chipotle comes back into your life-this time in the form of another operations management related blog post. But fret not; this post is not solely about the burrito king itself. No, it is about Blaze Pizza- its quick handed pizza-making counterpart where customers can choose from over 30 various topping to craft their own 11 inch pizza in just under 180 seconds- made possible through the utilization of a Chipotle-esque assembly line.  For co-founder Ray Wetzel, who along with wife Elise Wetzel founded Wetzel Pretzels, it is no secret how they formulated their business model. He recalls in an interview with QSR a past lunch outing where he failed to find pizza with his wife and actually ended up at a Chipotle that, “It was sort of this ‘aha’ moment when we looked at it: ‘Why can’t we do this to pizza, do what Chipotle did to the burrito or Mexican food?’”

Well they did just that, and they’re not the only ones. It seems that Chipotle inspired restaurants combining fresh, quality ingredients and a preparation platform with enough haste to meet the demands of today’s on-the-go consumer has caught on- giving chains like Blaze Pizza a competitive advantage. According to a recent Business Insider article by Ashley Lutz, “Growth of fast-casual chains like Chipotle is outpacing traditional restaurants,” while sales at chains like Pizza Hut “…declined 2% last year.” This chart below, from the same Business Insider article perfectly captures this alarming trend for traditionally paced casual diners.

Source NPD Crest,UBS
Source NPD Crest,UBS

The layout and process design at Blaze Pizza is flawless and something the consumer can count on. It’s literally as if customers are viewing a mini supply chain process in front of them as they watch their pizza being made. With easy functions for employees to carry out by simply listening to what the consumers would like on their pizzas, it is easy and inexpensive for Blaze to hire and train cheap labor- an aspect which often burdens others in an industry rampant with high employee turnover which is further complicated by the frequent introduction of new technology and alterations to the menu.

With Chipotle inspiring companies such as Blaze Pizza, where else do you think this type of setup could catch on, and is it strictly limited to the food service industry?


The Deep “Down” Dark truth behind the Feather Plucking Business


The North face is a popular American outdoor product company that specializes mostly in winter gear such as coats, jackets, fleece, hats, gloves, etc. It is a well-known and respected brand, yet recently it has been facing some ethical challenges in their operations. There has been a lot of controversy over down insulation. Down insulation is used due to the benefits it has of providing warmth during extreme cold weather. Yet the process of collecting these feathers is not so nice and simple. Basically many of the ducks and geese are often plucked alive, and “many of the fine feathers in comforters and puffy coats come from birds that were force-fed to make foie gras” (Stock). The North Face is one of the brands to recognize this problem in their supply chain and their goal is to create one that all customers can have a positive thought of. This relates back to our class since we discussed some of the new challenges that operations managers face, such as the increasing global focus, ethical, social responsibility and sustainability challenges. Basically companies are expected to develop products that are of high quality and sustainability. This could be seen in the actions North face is taking by changing their operations into something much more ethical, sustainable that affects everyone around the world. In the article it states, “We’re trying to change the down industry on a global level,” says Adam Mott, director of sustainability at North Face, a unit of apparel conglomerate VF Corp. “And we’re trying to create a standard that’s inclusive enough that anyone can use it”(Stock). Northface is changing its certification standard to become more environmentally focused, the birds that the feathers come from cannot be raised in harsh conditions. They need appropriate food, water and living conditions. Northface is going to have this supply chain documented clearly so that only qualified feathers will be turned into down insulation in their products. By next year a lot of products will be labeled with “RDS” which stands for “renewable down standard”. Recently a lot of other companies such as H&M, Eddie Bauer and Marmot have caught on with this major change, while Patagonia has been having clean down program for over six years. Yet the biggest challenge companies such as the Northface have to face is to convince duck and goose farmers in China and Eastern Europe, who provide most of the feathers, to change their operations and become environmentally focused, since most of the money they make, comes from meat of the birds and not the feathers. Even though there are still many obstacles along the way, Northface is following a new more sustainable path through it’s RDS program that they hope will raise consumer interest and allow them to compete with their biggest rival Patagonia.

Stock, Kyle. “North Face and H&M Try to Clean Up the Down Business.” Bloomberg Business Week. Bloomberg, 20 Oct. 2014. Web. 21 Oct. 2014.

Do you think there are other challenges that operations managers of companies such as Northface are going to face?

Do you think by refocusing its ethical approach to down insulation and creating new standards will benefit Northface as a Company? Will the sales and consume interest increase, even though Northface will be competing with sustainable brands like Patagonia who have their own clean down program (PDF) as early as 2007?

The ‘Walmarting’ of the Airline Industry

Norwegian Air Shuttle’s ambitious plans involve some complex logistics
Norwegian Air Shuttle’s ambitious plans involve some complex logistics

Many companies choose to employ a global strategy where different pieces of the process are completed in different regions of the world. These global processes can be accomplished in numerous combinations and it is up to the company to find the most effective one.

In this article, Norwegian Air Shuttle, an airline that specializes in low-cost flights around Europe, is bringing it business model to the United States and Asia, to the dismay of U.S. airline companies.

Their strategy is a complex one that has different cost-effective parts. Norwegian is “moving its long-haul operations from Norway to Ireland, basing some of its pilots and crew in Bangkok, hiring flight attendants in the United States, and flying the most advanced jetliner in service — the Boeing 787 Dreamliner.” Other airlines have tried but failed to do a low-fare approach on long-haul flights.

Bjorn Kjos, Norwegian’s CEO, is confident that they can offer fares that are 50 percent cheaper than the competition’s, which will ultimately drive out competition. American Labor groups, “see it as a backhanded attempt to outsource cheaper labor and undercut competition” as well as taking advantage of the open-skies agreement made with the EU (even though Norway isn’t part of the EU).

“United Airlines and American Airlines said the low-cost airline wanted to skirt labor laws by resettling its long-haul operations in Dublin, while using a Singapore-based company to hire pilots on its behalf in Thailand. The result would give it ‘a competitive advantage on trans-Atlantic routes in direct competition with U.S. carriers.’”

In class, we talked about competitive advantages in relation to globalization. According to the lecture there are many reasons to globalize:

  1. Improve the supply chain
  2. Reduce costs
  3. Improve operations
  4. Understand markets
  5. Improve products
  6. Attract and retain global talent

I think that the way that Norwegian Air Shuttle is globalizing falls in line with these points and it is effectively improving supply chain, reducing costs, and improving operations better than their American counterparts. They improve the supply chain by finding the most beneficial process to establish their airline. They lower direct and indirect costs by eliminating unnecessary expenses and finding the cheapest way to provide labor, and reducing taxes and tariffs. They also improve operations by understanding differences in how business is handled in different countries, and using it to their advantage.

There are also strategies for competitive advantage: differentiation, cost-leadership, and response. I believe that the Norwegian Air Shuttle company is competing on cost; they are they are providing the maximum value as perceived by the customer at the lowest cost and it is creating the most demand.

Do you think that the way Norwegian Air Shuttle handles their business model is considered a strategic competitive advantage or is it an unfair advantage? Why?

Source:  Long-Haul Expansion by a Norwegian Carrier Upsets U.S. Airlines

Lego-lution: The Early 2000s were a Disaster and Now

Continue reading “Lego-lution: The Early 2000s were a Disaster and Now”

The Hunger Games: Apple Edition

Since Apple’s latest press conference, who hasn’t been talking about the iPhone 6? It is easy to say that Apple products are incredibly popular in the U.S., and it is no secret that Apple has been trying to break into other markets abroad, especially Asia. However, few seem to realize the importance Apple has in countries in Asia, not because of their products, but because of the materials that make up their products. In “There’s a Downside to Making Parts for Apple,” Adam Satariano and Peter Burrows give readers a glimpse into the cutthroat negotiations Apple goes through with these companies, and how dependent they are on Apple products. Some companies simply exist because of Apple’s products. For example, 79.6% of Dialog Semiconductor’s, who makes chips within phones, revenue comes from Apple’s revenues. As scary as that sounds, the revenue from Apple is huge; their 79.6% revenue translates into almost $180 million. This seems like a lot of money and the benefits are obviously huge, but the suppliers worry that if Apple switches to a different supplier, as they did with Audience, who makes “mobile audio processors,” they will lose a ton of revenue. In Audience’s case, they not only lost 82% of their revenue from Apple products when Apple decided to use a different company to supply those audio processors, but their shares dropped from $22 to $6. Audience did find a new buyer in Samsung; however, their stocks never reached their heyday of $22 like they did with Apple. TPK Holding, which supplied Apple with the touch controls for the first iPhone, even held an IPO in 2010 because they felt so comfortable and reliable on Apple’s business. However, two years later, Apple decided to change its iPhone design, and began buying the same screens and controls from a rival. TPK Holding’s income fell by 50% in the last year, and its shares fell 73%. All of these companies lost majorly because they thought they could keep Apple around, but they could not.

The suppliers of Apple products are in a dangerous game. Their rises and declines come and go “in large chunks.” Companies often taste the sweet victory of signing a supplier contract with Apple almost immediately. For example, the revenues the companies involved in the iPhone 6 will receive will be huge, especially with a record setting opening weekend. However, there is a scary reality that a lot of these companies, in a few years, could lose Apple’s business, and depending on how reliant they are on Apple, it could be catastrophic.

How do you feel about Apple’s negotiating tactics? Do you think it is smart for these suppliers to go into business with Apple, knowing they could lose a ton of business in the next few years? What do you think the suppliers could do  in order to prevent losing Apple as a client?



Going Green to Put You in the Black

Climate change, environmental protection, carbon footprint; all of these phrases are familiar to us. But what do they have to do with operation management? A lot, actually! We can see this in the concept of sustainability, “meeting the needs of the present without compromising the ability of the future generations to meet their needs.” (Heizer 189.) Sustainability is important to operation managers because of how it affects things outside of the company. From the beginning of the supply chain to the end, managers have to consider how the product and the operations will affect not only consumers, but also the environment. To do this, managers can look at raw materials, product design, suppliers, disposal of material and waste, and transportation to reduce the impact on the environment. If the managers do not practice sustainability, the company can receive bad press from different stakeholders. Not only that, if the company is not meeting regulations, the company can be fined. According to our text, “if a firm wants to be viable and competitive, it must have a strategy for corporate social responsibility and sustainability.” (Heizer 199.)

There are many examples of companies changing the supply chain to be more sustainable. For instance, bottle companies using recycled plastic or companies reusing wastewater. Recently, even more companies have promised to reduce their environmental impact. Last week the New York Times reported more companies are supporting greener supply chains, renewable energy, and stopping the destruction of the tropical forests. According to the article, these promises have been a growing trend for a number of years, “…with virtually every major company now feeling obliged to make commitments about environmental sustainability, and to report regularly on progress.” (Nytimes.) This goes back to why sustainability is important for operations management. Because of the growing expectations, managers are looking for ways to make the supply chain sustainable. It also supports the fact that companies have to be sustainable to be competitive. Apple has committed to looking for ways to practice renewable energy and reduce emissions from their suppliers in the supply chain. For instance, Apple has been building solar farms and wind arrays in the United States. Other companies in the article have pledged to stop deforestation. Including Unilever, who has pledged to “…trace all…palm oil to known sources by the end of this year.” (Nytimes.)

Personally, sustainability was really interesting to read about. Though I have chosen to only talk about sustainability in regard to the environment, sustainability also includes other dimensions, as well. I think what surprised me most about sustainability is how companies really do have to practice it in order to stay viable and competitive. I realized that company sustainability influences how I think about a company. I am more willing to buy the company’s products and I think most other customers are like that too.

What are your thoughts on sustainability? Do you agree with the statement that companies need to practice sustainability in order to be viable and competitive? Why or why not?


Gillis, Justin. Companies Take the Baton in Climate Change Efforts. New York Times, 2014. Web.

Heizer, Jay, and Barry Render. Principles of Operations Management. Upper Saddle River. 2013. Print.

Counterfeit Drugs Enter the Pharmaceutical Supply Chain

According to the article “Secure The Pharmaceutical Supply Chain From Risky Counterfeiters,” leading members of the House and Senate have proposed a legislative draft to establish a national ‘track and trace’ program for prescription drugs. The Food and Drug Administration has been dealing with an increasing number of cases involving counterfeit prescription drugs. In 2010, the FDA’s Office of Criminal Investigation opened 72 cases involving fake drugs. This is highly problematic for the pharmaceutical supply and very risky for the health of individuals. Some of these cases have involved counterfeit Adderall, Vicodin, Xanax, flu medicine, and cancer drugs. One reason counterfeit drugs are able to enter the nation’s pharmaceutical supply chain is the contradicting state regulations that are in place. Each state has varying compliance rules. There is not a federal level system in place, and the FDA does not have the authority to implement federal standards that can ensure the authenticity of prescription drugs from the manufacturer into the hands of prescription drug users.

In order to combat the introduction of counterfeit prescription drugs into the nation’s pharmaceutical supply chain, there needs to be compliance standards at the federal level put into place. The ‘track and trace’ program proposed by members of the House and Senate calls to rid of the contradictory state regulations and increase the security of the pharmaceutical supply chain by setting up countrywide standards. Many industry participants, such as manufacturers, chain drug stores, wholesalers, and distributors, have expressed their support for this proposal.

A downside to this national ‘track and trace’ system is that it will be more costly for pharmaceutical companies. The high compliance costs that the pharmaceutical companies may incur could cause these companies to decrease operations, limit distribution, or even shut their doors entirely. More supply disruptions and drug shortages could occur as a result of the higher compliance costs. However, complying with the regulations of each of the individual states can also run costly for this industry as well.

Although the proposal for a unified national system of security for prescription drugs that Congress is putting forward may be costly, it would ensure that patients are receiving legitimate prescription drugs instead of counterfeit ones. This ‘track and trace’ system, when implemented at a national level instead of state-by-state, may be more cost effective in the long run.

A uniform system for the national pharmaceutical supply chain would decrease the ability for counterfeit prescription drugs to enter and be distributed to patients. Even though it could impose higher compliance costs for this industry, the benefits of ensuring safety for prescription drug users cannot be ignored.

Do the costs of implementing a uniform system for the pharmaceutical supply chain outweigh the benefits? Or do the benefits of a uniform system outweigh the costs?




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American Security and the Supply Chain

A recent report for the Alliance for American Manufacturing claims that the U.S. is risking its national security with its growing reliance on raw materials, parts and finished products purchased from sometimes unreliable foreign sources.  It concludes that the Pentagon relies too heavily on imports to keep the armed forces equipped and ready.


  • The U.S. solely relies on a single Chinese company for the chemical Butanetriol, needed to produce the solid rocket fuel used in HELLFIRE missiles.
  • The U.S. imports 91 percent of the rare earth element lanthanum, needed to make night-vision devices, from China.
  • Production of Neodymium-Iron-Boron magnets has migrated offshore, where China now fabricates 75 percent of these high-tech magnets.
  • The U.S. share of semiconductor fabrication has decreased from 50 percent to 15 percent in the last 30 years.

The disappearance of a U.S. industry for many of these products has eroded U.S. leadership in patents and our ability to design new applications.  The reliance on foreign suppliers for critical defense materials undermines the ability to develop capabilities needed for the future.  The risk here is that a vulnerable supply chain will cause us to lose our technological advantage over time.

It also raises quality concerns as it puts commercial and military products at risk for counterfeiting and higher rates of defects.  These could very well be intentional depending on which suppliers we pick as well as the current and future conflicts we choose to involve ourselves in.  Suppliers in other countries may be unsympathetic the causes of the United States.  The U.S. must also be prepared for the future if there ever comes a time when we must rapidly equip our armies.  Foreign suppliers may not be ready or willing to provide for our increased needs.

We talked in class about the recent push to globalize in operations management.  There are many good reasons for globalizing.  The most important being reduced costs since foreign locations with lower wage rates can lower direct and indirect costs.  Globalization should also, in theory, improve the supply chain as facilities are closer to unique resources.  Because of objective characteristics of goods, we could also expect better quality goods.

The United States spends more on defense than any other country on the planet; about $690 Billion dollars per year.  U.S. defense spending accounts for 40% of the world, and is greater than the European Union, China, Russia, United Kingdom, Japan, India, and Saudi Arabia combined.

It also needs to be noted that China and Chinese corporations are in fact our largest suppliers of raw materials, parts and finished products used in U.S. Defense.  Is there a reason for us to be concerned about China having so much power and influence in supplying for U.S. Defense?

Is it worth risking American Security to save a billion dollars?  How about 100 billion dollars?

Is it important that this report was prepared for the Alliance for American Manufacturing?