TJPU
Operations Management

By Dr. Deng Hua

TEXTBOOKS:
Fundamentals of Operations Managemen(Fourth Edition)
Mark M. Davis ,Nicholas J Aquilano,Richard B. Chase
McGraw-Hill Higher Education
ISBN: 7-302-09879-4/F.987
REFERENCE BOOKS (Optional):
Operations Management, 11th
Richard B. Chase, Nicholas J. Aquilano, F. Robert Jacobs
McGraw-Hill Higher Education
ISBN: 0-07-232315-9
COURSE EVALUATION:
Attendance 30%
Final Assignment 70%
Total 100%

Case 1/4 BSB, INC.: The Pizza Wars Come to Campus Renee Kershaw, manager of food services at a medium-sized private university in the Southeast, has just had the wind taken out of her sails. She had decided that, owing to the success of her year-old pizza service, the time had come to expand pizza-making operations on campus. However, yesterday the university president announced plans to begin construction of a student center on campus that would house, among other facilities, a new food court. In a departure from past university policy, this new facility would permit and accommodate food-service operations from three private organizations: Dunkin’ Donuts, Taco Bell, and Pizza Hut. Until now, all food service on campus had been contracted out to BSB, Inc. CAMPUS FOOD SERVICE
BSB, Inc., is a large, nationally operated food-services company serving client organizations. The level of service provided varies, depending on the type of market being served and the particular contract specifications. The company is organized into three market-oriented divisions: corporate, airline, and university or college. Kershaw, of course, is employed in the university or college division.
At this particular university, BSB, Inc., is under contract to provide food services for the entire campus of 6,000 students and 3,000 faculty, staff, and support personnel. Located in a city of approximately 200,000 people, the campus was built on land donated by a wealthy industrialist. Because the campus is somewhat isolated from the rest of the town, students wanting to shop or dine off campus have to drive into town.
The campus itself is a “walking” campus, with dormitories, classrooms, and supporting amenities such as a bookstore, sundry shop, barber shop, branch bank, and food-service facilities—all within close proximity. Access to the campus by car is limited, with peripheral parking lots provided. The university also provides space, at a nominal rent, for three food-service facilities. The primary facility, a large cafeteria housed on the ground floor of the main administration building, is located in the center of campus. This cafeteria is open for breakfast, lunch, and dinner daily. A second location, called the Dogwood Room, on the second floor of the administration building, serves an upscale luncheon buffet on weekdays only. The third facility is a small grill located in the corner of a recreational building near the dormitories. The grill is open from 11 A.M. to 10 P.M. daily and until midnight on Friday and Saturday nights. Kershaw is responsible for all three operations. THE PIZZA DECISION
BSB, Inc., has been operating the campus food services for the past 10 years—ever since the university decided that its mission and core competencies should focus on education, not on food service. Kershaw has been at this university for 18 months. Previously, she had been assistant manager of food services at a small university in the Northeast. After 3 to 4 months of getting oriented to the new position, she had begun to conduct surveys to determine customer needs and market trends. An analysis of the survey data indicated that students were not as satisfied with the food service as Kershaw had hoped. A large amount of the food being consumed by students, broken down as follows, was not being purchased at the BSB facilities: Percent of food prepared in dorm rooms 20
Percent of food delivered from off campus 36
Percent of food consumed off campus 44 The reasons most commonly given by students were (1) lack of variety in food offerings and (2) tight, erratic schedules that didn’t always fit with cafeteria serving hours. Three other findings from the survey were of concern to Kershaw: (1) the large percentage of students with cars, (2) the large percentage of students with refrigerators and microwave ovens in their rooms, and (3) the number of times students ordered food delivered from off campus. Percent of students with cars on campus 84
Percent of students having refrigerators or microwaves in their rooms 62
Percent of food that students consume outside BSB, Inc., facilities 43 In response to the market survey, Kershaw decided to expand the menu at the grill to include pizza. Along with expanding the menu, she also started a delivery service that covered the entire campus. Now students would have not only greater variety but also the convenience of having food delivered quickly to their rooms. To accommodate these changes, a pizza oven was installed in the grill and space was allocated to store pizza ingredients, to make cut-and-box pizzas, and to stage pre-made pizzas that were ready to cook. Existing personnel were hired to deliver them by bicycle. In an attempt to keep costs down and provide fast delivery, Kershaw limited the combinations of topping available. That way a limited number of “standard pizzas” could be preassembled and ready to cook as soon as an order was received. THE SUCCESS
Kershaw believed that her decision to offer pizza service in the grill was the right one. Sales over the past 10 months have steadily increased, along with profits. Follow-up customer surveys indicated a high level of satisfaction with the reasonably priced and speedily delivered pizzas. However, Kershaw realized that success brought with it other challenges.
The demand for pizzas had put a strain on the grill’s facilities. Initially, space was taken from other grill activities to accommodate the pizza oven, preparation, and staging areas. As the demand for pizzas grew, so did the need for space and equipment. The capacities of existing equipment and space allocated for making and cooking pizzas now were insufficient to meet demand, and deliveries were being delayed. To add to the problem, groups were beginning to order pizzas in volume for various on-campus functions.
Finally, a closer look at the sales data showed that pizza sales were beginning to level off. Kershaw wondered whether the capacity problem and resulting increase in delivery times were the reasons. However, something else had been bothering her. In a recent conversation, Mack Kenzie, the grill’s supervisor, had told Kershaw that over the past couple of months requests for pizza toppings and combinations not on the menu had steadily increased. She wondered whether her on-campus market was being affected by the “pizza wars” off campus and the proliferation of specialty pizzas. THE NEW CHALLENGE
As she sat in her office, Kershaw thought about yesterday’s announcement concerning the new food court. It would increase competition from other types of snack foods (Dunkin’ Donuts) and fast foods (Taco Bell). Of more concern, Pizza Hut was going to put in a facility offering a limited menu and providing a limited selection of pizzas on a “walk-up-and-order” basis. Phone orders would not be accepted nor would delivery service be available.
Kershaw pondered several crucial questions: Why had demand for pizzas leveled off? What impact would the new food court have on her operations? Should she expand her pizza operations? If so, how? Questions 1. How would you describe the mission of BSB, Inc., on this campus? Does BSB, Inc., enjoy any competitive advantages or core competencies?
2. Initially, how did Renee Kershaw choose to use her pizza operations to compete with off-campus eateries? What were her competitive priorities?
3. What impact will the new food court have on Kershaw’s pizza operations? What competitive priorities might she choose to focus on now?
4. If she were to change the competitive priorities for the pizza operation, how might that affect her operating processes and capacity decisions?
5. What would be a good flow strategy for Kershaw’s operations on campus to meet the food court competition?

Case 2/4 CRANSTON NISSAN Steve Jackson, General Manager of Cranston Nissan, slowly sifted through his usual Monday morning stack of mail. The following letter was one he would not soon forget. Dear Mr. Jackson:
I am writing this letter so that you will be aware of a nightmare I experienced recently regarding the repair of my 300ZX in your body shop and subsequently in your service department. I will detail the events in chronological order. AUGUST 28
I dropped the car off for repair of rust damage in the following areas: Roof—along the top of the windshield area
Left rocker panel—under driver’s door
Left quarter panel—near end of bumper
Rear body panel—under license plate I was told it would take three or four days. SEPTEMBER 1
I called to inquire about the status of the car, since this was the fifth day the car was in the shop. I was told that I could pick up the car anytime after 2 P.M. My wife and I arrived at 5 P. M. The car was still not ready. In the meantime I paid the bill of $443.17 and waited. At 6 P.M. the car was driven up dripping wet (presumably from a wash to make it look good). I got into the car and noticed the courtesy light in the driver’s door would not turn off when the door was closed. I asked for help, and Jim Boyd, body shop manager, could not figure out what was wrong. His solution was to remove the bulb and have me return after the Labor Day holiday to have the mechanic look at it. I agreed and began to drive off. However, the voice warning, “Left door is open,” repeatedly sounded. Without leaving the premises I returned to Mr. Boyd, advising him to retain the car until it was fixed—there was no way I could drive the car with that repeated recording. Mr. Boyd then suggested I call back the next day (Saturday) to see if the mechanic could find the problem. I must emphasize, I brought the car to the body shop on August 28 in perfect mechanical working condition—the repair work was for body rust. This point will become important as the story unfolds. SEPTEMBER 2
I called Jim Boyd at 10:30 A.M. and was told that the car had not been looked at yet. He promised to call back before the shop closed for the holiday, but he never did. I later learned that he did not call because “there was nothing to report.” The car sat in the shop Saturday, Sunday, and Monday. SEPTEMBER 5
I called Jim Boyd to check on the status of the car. It was 4 P.M., and Mr. Boyd told me nothing had been done, but that it should be ready by the next day. At this point it was becoming obvious that my car did not have priority in the service department. SEPTEMBER 6
I called Jim Boyd again (about 4 P.M.) and was told that work had halted on the car because the service department needed authorization and they did not know how much it would run. At the hint that I would have to pay for this mess I became very upset and demanded that the car be brought immediately to the mechanical condition it was in when it was dropped off on August 28. At this point Ted Simon, service department manager, was summoned, and he assured me that if the problem was caused by some action of the body shop, I would not be financially responsible. I had not driven the car since I dropped it off, and I could not fathom the evidence anyone could produce to prove otherwise. SEPTEMBER 7
Again late in the day, I called Mr. Simon, who said that Larry (in the service department) knew about the problem and switched me over to him. Larry said that they had narrowed it down to a wire that passed several spots where body work was performed. He said the work was very time-consuming and that the car should be ready sometime tomorrow. SEPTEMBER 8
I called Mr. Simon to check on the status of the car once more. He told me that the wiring problem was fixed, but now the speedometer did not work. The short in the wires was caused by the body work. Larry got on the phone and said I could pick up the car, but they would send the car out to a subcontractor on Monday to repair the speedometer. He said that when the mechanic test-drove the car he noticed the speedometer pinned itself at the top end, and Larry thought that someone must have done something while searching for the other problem. I asked him if there would be charges for this and he said there would not. My wife and I arrived to pick up the car at 5 P.M. I clarified the next steps with Larry and was again assured that the speedometer would be repaired at no charge to me.
The car was brought to me, and as I walked up to it I noticed that the rubber molding beneath the driver’s door was hanging down. I asked for some help, and Mr. Simon came out to look at it. He said it must have been left that way after the search process for the bad wire. He took the car back into the shop to screw it on. When it finally came out again, he said that he would replace the molding because it was actually damaged.
When I arrived home, I discovered that the antitheft light on the dash would not stop blinking when the doors were closed. Attempting to activate the security system did not help. The only way I could get the light to stop flashing was to remove the fuse. In other words, now my security system was damaged. Needless to say, I was very upset. SEPTEMBER 11
On Sunday evening I dropped off the car and left a note with my keys in the “early bird” slot. The note listed the two items that needed to be done from the agreement of last Friday—the molding and the speedometer. In addition, I mentioned the security system problem and suggested that “somebody must have forgotten to hook something back up while looking for the wire problem. On Monday I received a call from someone in the service department (I think this name was John), who said that the problem in the security system was in two places—the hatchback lock and “some wires in the driver’s door.” The lock would cost me $76, and the cost for the rest was unknown. The verbal estimate was for a total of $110. I asked him why he did not consider this problem a derivative of the other problems. He said that both the body shop and the mechanic who worked on the wire problem said they could see no way that they could have caused this to happen.
I told the fellow on the phone to forget fixing the security system because I was not going to pay for it. At this point, I just wanted the car back home, thinking I could address the problem later with someone such as yourself. I told him to have the speedometer fixed and again asked about charges for it. I was assured there would be none. SEPTEMBER 13
The service department called to say I could pick up the car anytime before 8 P.M. He also said that the molding had to be ordered because it was not in stock. The need for the part was known on September 8, and NOW the part must be ordered. This will cause me another trip to the shop.
When I went to the service department to pick up the car, I was presented a bill for $126. I asked what the bill was for, and I was shown an itemized list that included speedometer repair and searching for the security problem. I said my understanding was that there would be no charges. Somebody at the service desk was apprised of the problem and released the car to me with the understanding that the service manager would review the situation the next day.
My car was bought around to me by the same person who brought it to me September 8. As I got into the driver’s seat, I noticed there was no rearview mirror—it was lying in the passenger’s seat, broken off from its mounting. I was too shocked to even get mad. I got out of the car and asked how something like this could happen without anyone noticing. Jim Boyd said someone probably did want to own up to it. He requisitioned a part and repaired the mirror mounting.
Mr. Jackson, I realize this is a long letter, but I have been so frustrated and upset over the past three weeks that I had to be sure that you understood the basis for that frustration. I am hoping you can look into this matter and let me know what you think.
Sincerely,
Sam Monahan
555 South Main, Turnerville Questions
Answer the following questions from the perspective of TQM.
1. Categorize the quality problems in this case.
2. What are the probable causes of so many mishaps?
3. Prepare a cause-and-effect chart for “failure to remedy repair problem to customer satisfaction.”
4. What specific actions should Jackson take immediately? What should some of his longer-term goals be?

Case 3/4 The Tao of Timbuk2

Case 4/4 Wyatt Earp - The Buffalo Hunter The legend of Wyatt Earp lives on largely based on his exploits as a gunfighter and Marshall of the frontier West in the 1880s. The classic tales of the shootout at the O.K. Corral in Tombstone or his sawed-off shotgun duel with Curly Bill are possibly the most celebrated gunfights of frontier history and can not fail to stir the reader's imagination. Wyatt lived to be over 80 years old, long enough to recount his story to Stuart Lake for the book Wyatt Earp: Frontier Marshall (published by Pocket Books).

Apparently, Wyatt was quite a financial success long before he became a marshal. He learned how to hunt and shoot buffalo when only 15 years old. By the time he was 20, the Kansas City and Caldwell buffalo hunters knew him as one of the best in the west. His methods for hunting buffalo were very different from the established practices of the time.

Outside the marshal's office in Caldwell, veteran hunters would meet to compare the season's hunt. Success was measured solely by animals killed and cash received for the hides and meat. Wyatt realized that what was important was the gain after expenditures for horses, wagons, supplies, and skinners' wages were considered. Any hunter could boast of the money in his pockets at the end of a season, but few could say accurately how much was gain.

The Ways of the Veteran Hunters
The buffalo hunter of 1871 set out for the range with five four-horse wagons, with one driver, the stocktender, camp watchman, and cook; and four others to skin the kill. The hunter provided horses, wagons, and supplies for several months. Money received for hides and meat would be divided into two equal parts; one went to the hunter, and from his share, he paid all expenses. The second was again split into as many shares as there were drivers, skinners and helpers with each getting a share as his seasonal wage. It was believed that no really top-notch buffalo hunter would stoop to skinning the animals he shot. Each person in the party had a specific assigned job, and none would do something below their level of dignity.

The weapon of choice at the time was the Sharps "Fifty" rifle. These rifles, which all right-minded buffalo hunters carried, weighed more than twenty pounds. The gun shot a slug of lead two inches in length, a half-inch in diameter, weighing approximately an eighth of a pound. The Sharps was the best weapon obtainable for long-range shooting, but notable among its drawbacks were the cost of ammunition and the fact that the rifle's accuracy was seriously affected by continued rapid fire. To prevent damaging the rifle, the wise user, ran a water-soaked rag through the barrel after every second or third shot and let the metal cool.

Wyatt recounted that "early white hunters had followed the Indian practice of shooting buffalo from the back of a horse galloping full tilt at the edge of a stampeding herd. In skin hunting this did not pay. Shooting from horseback could not be as accurate as from a stand, and the animals killed during a run would be strung for miles across the prairie, making a lot of travel for the skinners, with the added certainty that many hides would be missed. Also, every buffalo left alive would be stampeded clear out of the country in a day's hunt, and the killers would have to move camp or wait for another herd.

"In stories about Buffalo Bill Cody and other Western characters who went into the circus business, I've read of a single horseman holding a bunch of buffalo stock-still by riding around and around them for hours and shooting as he rode. That was an impossibility. Two minutes after the horseman started his riding and shooting, there would not have been a buffalo within rifle range. Buffalo would stampede instantly at the sight or smell of a man on horseback; they would ignore a man on foot, or eye him in curiosity. That was why hide hunters shoot from a stand.

Wyatt goes on to recount the methods of current hunters. "A Hunter would drag his Sharps to a rise of ground giving a good view of the herd, pick a bunch of animals, set his rest-sticks and start shooting. He aimed to hit an animal on the edge of the bunch, the leader if possible, just back of the foreleg and about one third of the way up the body. If the slug went true, the animal would drop in his tracks or stagger a few steps and fall. Strangely enough, the buffalo paid no attention to the report of the rifle and very little, if any, to one that fell.

"A first-class hunter would kill with almost every shot, and if he was good, he could drop game until some buffalo still on his feet chanced to sniff closely at one that had fallen. Then it was up to the hunter to drop the sniffer before he could spread his excitement over the smell of blood. If he could do this, the slaughter might continue, but eventually the blood scent became so strong that several animals noticed it. They would bellow and paw, their frenzy would spread to the bunches nearby, and suddenly the whole herd was off on a wild run. The hunter could kill no more until he found conditions suitable for another stand.

"Where large parties of hunters were working the plains by such methods in fairly close quarters, the periodical scarcity of buffalo was a certainty. With the best of luck, a single hunter might kill one hundred buffalo in a day, from several stands. That would be all that four skinners could handle. I found that the average bunch would stampede by the time thirty or forty had been killed. Only the best of hunters could average 50 kills a day, thirty to forty was more common.

Wyatt Earp's Buffalo Hunting Method
The first flaw which Wyatt Earp saw was that the average hunter outfitted in expectation of killing one hundred buffalo a day, and selling each animal's hide and meat for two to five dollars, depending upon size and quality. In place of five wagons and twenty-odd horses, Wyatt purchased one wagon, four sound animals for harness and one to ride. He engaged an experienced skinner in a straight profit-sharing scheme. Wyatt was to finance the hunt; the skinner would drive and cook; and, greatly to the disgust of older hands, Wyatt was to assist in skinning and butchering. At the end of the hunt, Wyatt was to keep the team and wagon, deduct all other expenses from the gross receipts, and share any net equally with his skinner.

In contrast to the use of the Sharps rifle, Wyatt killed buffalo with a shotgun. Wyatt was well acquainted with the buffalo's idiosyncrasy of stampeding at the sight or scent of a man on horseback, but generally ignoring one on foot. He intended to make use of this in reaching shotgun range of the herds. He purchased a breech-loading gun, with apparatus for reloading shells, and this, with a supply of powder, lead, and caps, was to constitute his hunting arsenal. He loaded a single one-and-one-half-ounce slug to the shell. He knew that at any range under one hundred yards he could score as accurately with his shotgun as any rifleman.

Wyatt described his approach: "My system for hunting buffalo was to work my way on foot nearer to the herds than the rifle users like to locate. The shorter range of my shotgun made this necessary, but I could fire the piece as rapidly as I wished without harming it. I planned to get within fifty yards of the buffalo before I started shooting, and at that range pick off selected animals. I would shoot until I had downed all the skinner and I could handle that day. I figured to offset the danger of a stampede by finishing my kill before the animals smelled blood and then working the herd away quietly in the direction I wanted it to go. To do this, I would stand up, wave my coat in the air, and shout. The buffalo would probably move away quietly if I got them started before they scented blood. Then the skinner and I would get to work. In practice, my idea worked out exactly as I had calculated it would.

"Some people called my method foolhardy. To me, it was simply a question of whether or not I could outguess a buffalo. The best answer is that there never was a moment during my three seasons as a buffalo hunter when I was in danger from a stampede, nor a day when I hunted that I did not have a profitable kill. My lowest score for a single stand was eighteen buffalo, the highest, twenty-seven. I shot one stand a day, which meant twenty to thirty-five dollars apiece for the skinner and myself every day we worked. That was cash in hand, not hopes.

"No wonder the average buffalo hunter was glad that the code forbade him to skin his kill; skinning was hard, dirty work. My skinner kept out of sight with the wagon until I had finished shooting. Then he came on the job. In skinning a buffalo, we slit down the inside of each leg and along the belly from neck to tail. The legs and a strip along each side of the belly-cut were skinned out and the neck skinned all the way around. The head skin was not taken. We gathered the heavy neck hide into a bunch around which we looped a short length of rope, and a horse hitched to the other end ripped the hide off. We did it every time this way.

"In camp, we dusted the hides and the ground nearby with poison to keep off flies and bugs, and pegged out the skins, flesh-side up. In the dry prairie air, first curing took but a day or so. The hides were then turned, and, after they had cured so water would not injure them, they were stacked in piles, hair-side up, until we hauled them to a hide buyer's station, or a buyer's wagon came to our camp.

Wyatt Earp - The Legend
The success of Wyatt Earp's venture against cherished customs became legend to the ranks of the buffalo hunters. Time after time on checking tallies, the lone hunter found that, while some had killed greater numbers than he from the given stands, or had larger seasonal totals, his daily count of hides was well above average. Rudimentary arithmetic proved that his profits were much higher.

Wyatt recounts the inevitable demise of the great buffalo herds: "With all the buffalo I saw in the days when they roamed the range, I shall never forget a herd we sighted in the fall of '71. We had seen a few small bunches, but none that I stopped for, as I wanted to make camp as permanent as possible. We had crossed the Medicine Lodge when the plenticity of buffalo sign indicated that we were closing on a sizable herd. I went to a rise possibly three hundred feet above the creek bottom. The sight that greeted me as I topped the hill soon disappeared for all time.

"I stood on the highest point within miles. To the west and south, the prairie rolled in mounds and level stretches pitted with buffalo wallow as far as I could see, twenty or thirty miles. For all that distance the range was packed with grazing buffalo.

"... I signaled my skinner to join me. 'My God!' he said, 'there must be a million.'

"It might give a better idea of the results of buffalo hunting to jump ahead seven years to 1878, when Bill Tilghman, Bat Masterson, and I went buffalo hunting for sport. We traveled due west from Dodge City more than one hundred miles along the Arkansas River, south to the Cimmarron, and east to Crooked Creek again, at the height of the best hunting season over what in 1871 had been the greatest buffalo ground in the world. Grass was as plentiful and as succulent as ever, but we never saw a buffalo. The herds were gone, wiped out."

Questions:
* Compare Wyatt's buffalo hunting to the approach used by the old timers?
* What are the key elements of business success from an operations perspective?
* Relate these ideas to Wyatt's approach.
* Were the buffalo hunters irresponsible in killing off the great buffalo herds as they did? 8