Course Outline

1 Introduction Course Introduction Trial by Fire, powerpoint on Ops Strat

2 Product Dev Dreamcast/Sega Chap 8 in Clkspd on 3-DCE, ABC's of CPM
3 Operations Burger King Types of Processes, EOQ, Newsvendor
Inven probs, Relevant costs, Whirlwind/Web,
4 Strategy Inventory Mgmt
Dell/Conqueror, Laptop King
5 Process Alaska Airlines Levitt
6 Technology Webvan They've got mail.
7 Cisco MRP note, ERP Technology Note
8 Process Process Flow Models Queueing Note & Inventory Buildup
9 Analysis National Cranberry
10 Univ Health Service
11 Process Quality Mgmt Deming, Juran, Crosby; 6sig, Berwick, Memory Jogger
12 Quality Toyota Lean Production, Karmarkar
13 The Goal
14 Bank of America Hammer & Cole Articles
15 Supply Hewlett-Packard SMR paper
16 Chain Barilla SPA
17 Sport Obermeyer
18 Wrap-Up Wrap-up
 15.760: Sega Dreamcast/CPM

1. What are the key elements of the value chain

for the home video game business?

2. What are the possible failure modes for Sega

and its Dreamcast product?

3. What capabilities does Sega require to succeed?

4. Whats the critical path for the CPM exercise?

5. Launch as scheduled or postpone?

6. What happened. Why?

7. Lessons learned.

15.760: CPM exercise

Task Description Duration (weeksPrecedence

A Market Study 14
B External Developer Focus Group 10
C Feature Selection 4 A,B
D Hardware Engineering 25 C
E Operating System Devlpt. 16 D,B
F Advertising Campaign 20 D,M,N
G Supplier Selection & Negotiation 20 D
H Component Inventory Buildup 45 G
I Assembly Facility Setup 18 D
J Finished Good Inventory Buildup 7 I,H
K Library & Programmer Toolkit Devlpt. 12 E
L External Development Support Setup 5 K
M Internal Game Devlpt. 30 K
N External Game Devlpt. 32 L,O
O Platform Promotion 6 K
P Publisher Selection & Negotiation 5 M
Q Website Setup 20 M
R Release Promotion Material Design 3 D,M,N
S Distribution Channels Devlpt. & Negotiation 9 R
T Carrier Selection & Negotiation 4 S
U Launch Event Organization & PR 5 R
V Hardware & Software Shipment 1 J,T,P,N
W Launch! 0 V,U,Q,F
 15.760: CPM exercise

1. What is the critical path and total duration for this

project?
2. Suppose that a marketing study finds that the Advertising
Campaign can be shortened to 15 weeks without
significant impact reduction. What is the new CP and
total project duration?

3. Suppose we would like to reduce the time until launch to

28 months, what would you recommend?

4. Bonus: Suppose that the duration of the development

tasks E, M and N are now random variables following
exponential distributions with means 16, 30 and 32
respectively.
What is the probability that the total project duration
will be more than 135 weeks?
 Setup Factory W
I FG Inv Build 0
Ship HW
18 J GO!
& SW
7 V
Supp Sel & Neg 1
G Setup
Mkt Study 20 Comps Website
A H Inv Q
14
Features 45 20
C D
25 Plan Launch
4 HW Eng Event
Int Dev U
E 5
B SW Dev Kit M P
10 16 5
K 30
12 Publisher
Ext Dev O/S Dev Distr Neg
Sel & Neg
Focus Grp Dev Supp S
R 9 T
L 3 4
5 N Release Carrier Neg
O 32 Promo
6
Ext Dev F
Platform 20
Mktg Advert Plan
 129, 129
W
43, 61
I 0
108, 115
18 J 129, 129
124, 125
103,121 7 V
43, 63 121,128 1
G 128, 129
0, 14 63, 108
A 20
H 101, 121
56,76 Q
14 18, 43 45 20
0,14 14, 18 D
C 76, 121
25 109,129
4
18, 43 111, 116
14,18 U
0, 10 43, 59 101, 106
E 71, 101 5
B M P
16 59, 71 124,129
10 K 30 5
4,14 43, 59 12 123,128
79, 109
111, 120
59, 71
108, 111 S 120, 124
71, 76 R 9 T
L 77, 109 3 115,124 4
5 N 112,115 124,128
71, 77
ES, EF 72, 77
O 32
77, 109 109, 129
6
71, 77 F
LS, LF 20
109, 129
 129, 129
W
43, 61
I 0
108, 115
18 J 129, 129
124, 125
103,121 7 V
43, 63 121,128 1
G 128, 129
0, 14 63, 108
A 20
H 101, 121
56,76 Q
14 18, 43 45 20
0,14 14, 18 D
C 76, 121
25 109,129
4
18, 43 111, 116
14,18 U
0, 10 43, 59 101, 106
E 71, 101 5
B M P
16 59, 71 124,129
10 K 30 5
4,14 43, 59 12 123,128
79, 109
111, 120
59, 71
108, 111 S 120, 124
71, 76 R 9 T
L 77, 109 3 115,124 4
5 N 112,115 124,128
71, 77
ES, EF 72, 77
O 32
77, 109 109, 129
6
71, 77 F
LS, LF 20
109, 129
Corporate Supplier Market Effects on

Decision Performance Dynamics Relationships

e ma nd H Retailers increase dedicated space

D Software development accelerate
v e rs Win-Win-Win !!!
r eco
NEC Deman Product is a dud

dL Reinvigorate or Exit.

Sales puts on the best face possible

Pressure/help NEC

nd H
h

Dema
fix a

NE Retailers unhappy with empty shelves

nc

n ek

Cl
t io s e

Disgruntled Customers

ate
lau

uc l y

Software developers anxious

Deman
od iv

dL
pr ust

Need to stimulate demand & NEC

Product may be a dud

ha
Ex

Software developers may quit

nd H
Dema
Production ramp-up crucial

rs Must maintain good communications

de un

v e
r eco Slow start is overcome: win-win-win

la ch

NEC
la

Deman
ye

dL Recrimination mode
d

Was product a dud or was lateness to

market the killer?
NE
Cv Deep trouble
ery Try to mend relationships and make new plan
lat
e or just exit.
 INDUSTRY CLOCKSPEED IS A COMPOSITE:

OF PRODUCT, PROCESS, AND ORGANIZATIONAL

CLOCKSPEEDS

Mobile Phone INDUSTRY CLOCKSPEED

THE THE

Mobile Phone Mobile Phone

product technology
THE MANUFACTURING

Mobile Phone COMPANY

organization
PRODUCTION

PROCESS

process technology
 Mobile Phone System CLOCKSPEED is a mix of

Transmission Standards, Software and Handsets

Mobile Phone System

TRANSMISSION
SOFTWARE
STANDARD
slow clockspeed APPLICATIONS HAND SET
medium clockspeed fast clockspeed
OPERATING SERVICES

SYSTEM fast clockspeed

slow clockspeed

ISSUE: THE FIRMS THAT ARE FORCED

TO RUN AT THE FASTEST CLOCKSPEED
ARE THE MOST LIKELY TO STAY AHEAD
OF THE GAME.
 Product
Process Supply Chain

Design Architect. Unit Mfg.Syst

S.C. Logistics
Detailed Modular Processes Functnl Architect. & Coord
Perform. vs. Tech. Cellular. Orgs Set System
Specs Integral & Equip. & Alloc. Auton vs.
& Funct. of Tasks Integrated

- Focus
A 3-D CE decision model

- Architecture illustrating the imperative

- Technology of concurrency