Is Your Company Tracking Employees With GPS?

OCTOBER 26, 2013

Schneider National drivers are tracked to see if they are breaking too hard

Dennis Gray suspected that workers in his pest-control company were spending too much time on personal issues during the workday. So the general manager of Accurid Pest Solutions in Virginia quietly installed a piece of GPS tracking software on the company-issued smartphones of its 18 drivers. The software allowed Gray to log onto his computer to see a map displaying the location and movement of his staff. One employee, he discovered, was visiting the same address a few times a week for a few hours during the workday. At that point, Gray told the driver he was being tracked.

“Blue-collar workers have always been kept on a tight leash,” writes The Wall Street Journal (Oct.23, 2013), “but there is a new level of surveillance available to bosses these days. Thanks to mobile devices and inexpensive monitoring software, managers can now know where workers are, eavesdrop on their phone calls, tell if a truck driver is wearing his seat belt and intervene if he is tailgating”.

A 2012 report found that 37% of companies that send employees out on service calls track the real time location of workers via their hand held devices or vehicles. High tech monitoring feels like a violation of privacy to some workers, but employers say such measures improve workplace safety and productivity while also helping to reduce theft, protect secrets and investigate harassment or discrimination claims. No federal statutes restrict the use of GPS by employers, nor force them to disclose whether they are using it.

Companies that keep quiet about tracking efforts may miss out on the benefits of deterrence. A recent study of NCR’s theft-monitoring software used in 392 restaurants found a 22% reduction in server theft after the software was installed and staffers were told about it. Drink sales, meanwhile, rose 10%. Being watched, researchers found, made waitstaff work harder.

This post provided courtesy of Jay and Barry’s OM Blog at www.heizerrenderom.wordpress.comProfessors Jay Heizer and Barry Render are authors of Operations Management , the world’s top selling textbook in its field, published by Pearson.

The Revolution in Vehicle Design

OCTOBER 24, 2013

Design software produces ideal shapes for vehicle parts like this motorcycle frame

A revolution in vehicle design that has been sweeping the auto industry, writes The Wall Street Journal (Oct. 21, 2013) . Advances in computer-aided engineering (CAE) and big investments in computing power have given manufacturers new tools to create designs and the ability to test their ideas in a fraction of the time and at far less cost than they could before. The result: many more design ideas are being conceived and tested, and the best are being adopted quickly, helping manufacturers improve the fuel efficiency and their vehicles. “This new process is allowing us to do a lot of innovation,” says Ford’s head of CAE.

Car makers are using computers to run through dozens of design possibilities in the time it once took to produce a single prototype. Only a few years ago, it might have taken as long as 8 months to get from the idea for a new cylinder head to the building of a prototype, and it would have cost millions of dollars. Today, the part is created in a computer simulation that comes up with the most efficient design possible. Engineers then alter that design to account for manufacturing constraints and test the revised design virtually in models that use decades of data on material properties and engine performance as a guide. The firm then creates the mold to make a real part that can be bolted onto an engine for further testing. The entire process takes days instead of months and cost only thousands.

In the past 4-5 years, car makers have been ditching physical prototypes as computer simulations of real-world conditions improved. Costs, performance and safety designs have been digitized so they can be weighed by design programs. The vehicle can be built, run through snow banks, started in frozen or hellishly hot conditions and crashed repeatedly—all inside a network of computers.

This post provided courtesy of Jay and Barry’s OM Blog at www.heizerrenderom.wordpress.comProfessors Jay Heizer and Barry Render are authors of Operations Management , the world’s top selling textbook in its field, published by Pearson.

Goldman Sachs cafeteria’s genius pricing plan?

OCTOBER 22, 2013

goldmanGoldman Sachs’ cafeteria has been described as something out of Gattaca, the 1997 science fiction film, reports The Washington Post (Oct.18, 2013).  It’s a wide-open space full of furniture that looks like it was smuggled from a utopian future in which nothing is ever dirty, broken or unintentionally asymmetrical. It isn’t just the physical design of the 11th-floor space that creates this impression. It’s the way Goldman administers it with a clever policy designed to economically engineer efficient eating.

The most crowded time of the day to eat lunch is, naturally, during lunch time. For most people, this falls around noon. This creates the phenomenon of the lunchtime rush hour. Goldman didn’t like the idea of its people waiting on long lines to get their lunch. People are capital to Goldman. It wants to use its capital efficiently. Standing on line waiting for a burger is not an efficient use of Goldman’s capital. So the cafeteria has a set of timed discounts. If you show up before 11:30 or after 1:30, you get a 25% discount on your food.

As it turns out, Goldman folks are both especially attuned to economic incentives and ruthless about capital efficiency. Some take pride that they’ve never eaten lunch inside the “cost penalty window,” as one trader referred to the 2 hours when the discount isn’t in effect. In the cafeteria around 1:20 pm, the lines at the pay registers are empty. So are many of the tables. But the area between where the food is collected and where you pay is quite crowded. The Goldman lunchers are chatting with each other, waiting for the final minutes to tick down until they can save a dollar or two.   When its spokesman was called about Goldman’s lunch market manipulation, neither he nor anyone else in his office was available around 1:30. “Goldman approves of employees using their capital efficiently,” he said later.

This post provided courtesy of Jay and Barry’s OM Blog at www.heizerrenderom.wordpress.comProfessors Jay Heizer and Barry Render are authors of Operations Management , the world’s top selling textbook in its field, published by Pearson.

3-D Printers vs. European Guns Laws

OCTOBER 21, 2013

The Liberator hand gun's files were downloaded 100,000 times in 2 days

The gun fired four shots into a gelatin block,” writes The New York Times (Oct. 18, 2013). Each nine-millimeter bullet punched deep into the substance, which was meant to mimic the density of a human body. For the experts at the Austrian Interior Ministry performing the test, it was a clear sign: This was a deadly weapon. But it was no ordinary gun. The officials had downloaded the gun’s digital blueprints from the Internet and “printed” the weapon on a type of 3-D printer that any person could buy online for about $1,360. It took the Austrian authorities $68 worth of plastic polymer, built up layer by layer according to the software instructions, to make the gun.

Law enforcement agencies across Europe are on alert over the proliferation of gun-making software that is easily found on the Internet and can be used to make a weapon on a consumer-grade 3-D printer. In May, after a 25-year-old law student from Texas posted designs for a 3-D-printed handgun online, the files were downloaded more than 100,000 times in just 2 days before the State Department demanded they be removed. Stoking the anxiety have been well-publicized examples in recent months of people evading airport-style security scanners with 3-D-printed plastic weapons, whose only metal components are firing pins no bigger than a short common nail. Last summer, an Israeli TV reporter successfully toted a 3-D-made handgun into the Israeli parliament, where Prime Minister Netanyahu was giving an address.

The manufacture of weapons using 3-D printers is already banned by a European Union directive to member nations. Enforcing that rule, however, may prove a challenge. A total of 35,508 personal printers were sold worldwide last year, up nearly 50% from 2011. Most of these machines were sold to hobbyists, engineering students, and colleges. Tightening airport security might be one possible response, according to the German Police Union. “It is quite conceivable that this technical development will make full-body scanners at airports mandatory.”

This post provided courtesy of Jay and Barry’s OM Blog at www.heizerrenderom.wordpress.comProfessors Jay Heizer and Barry Render are authors of Operations Management , the world’s top selling textbook in its field, published by Pearson.

 

Amazon Moves In With P&G

OCTOBER 18, 2013

amazonAt the end of a road in Tunkhannock, PA., called P&G Warehouse Way, sits a warehouse stocked with Pampers diapers, Bounty paper towels and other items made by  P&G. Inside the distribution center, reports The Wall Street Journal(Oct.15, 2013), is another company: Amazon.com. Each day, P&G loads products onto pallets and passes them over to Amazon inside a small, fenced-off area. Amazon employees then package, label and ship the items directly to the people who ordered them.

The e-commerce giant is quietly setting up shop inside the warehouses of a number of important suppliers as it works to open up the next big frontier for Internet sales: everyday products like toilet paper, diapers and shampoo. The under-the-tent arrangement is one Amazon’s competitors don’t currently enjoy, and it offers a rare glimpse at how the company is trying to stay ahead of rivals.

Logistics have long been crucial to success in retail. Years ago, Wal-Mart set up a system that lets suppliers monitor what needs to be replenished. Amazon instead is going out to its suppliers by piggybacking on their warehouses and distribution networks. Amazon is able to reduce its own costs of moving and storing goods, better compete on price with Wal-Mart and club stores like Costco, and cut the time it takes to get items to doorsteps. P&G began sharing warehouse space with Amazon 3 years ago and has expanded the practice. Amazon is now inside at least 7 P&G distribution centers world-wide,

The economics of the arrangement benefit both sides. For Amazon, “co-location” reduces the cost of storing bulky items like diapers and toilet paper and frees up space for the Web retailer to stock higher-margin goods in its own distribution centers. P&G, meanwhile, saves on the transportation costs that it would have incurred trucking products to Amazon’s regional distribution centers. Plus, it gets Amazon’s help in boosting online sales, a priority for many in the industry.

This post provided courtesy of Jay and Barry’s OM Blog at www.heizerrenderom.wordpress.comProfessors Jay Heizer and Barry Render are authors of Operations Management , the world’s top selling textbook in its field, published by Pearson.

GM Discovers the Importance of Logistics

OCTOBER 15, 2013

GM's stamping plant is now next to the existing Arlington TX assembly plant

For years, General Motors pounded out hoods, fenders and doors for its Tahoe and Yukon SUVs at plants in Ohio and Michigan and shipped them to its assembly plant in Arlington, Texas.Yesterday, reports The Wall Street Journal (Oct. 14, 2013), the auto maker officially opened a $200 million metal-stamping plant adjacent to the Arlington factory that reduces that travel to about 20 feet from machine to welder.Estimated savings: about $40 million a year in shipping costs.

The new plant, is part of a broader rethinking of logistics by GM CEO Dan Akerson to generate hundreds of million of dollars in new profit. “Any savings I can get by cutting my logistics bill goes right to my bottom line and makes us more competitive,” says Akerson.  GM now sees logistics as representing the biggest potential opportunity to squeeze new profit from operations.

Co-locating parts-making and auto assembly promise higher quality and greater profit. GM and other auto makers say they can no longer put up with parts that arrive scratched or dented and have to be repaired.  “Now, with the reset of labor costs, especially in the U.S., more efficiency in the plants and the importance of quality, we can finally evolve,” adds the CEO of GM’s largest parts supplier.

“The best way to describe logistics is waste,” says GM’s manufacturing chief. “It is moving productive materials from point A to point B. It has no value and guess what; it doesn’t mean anything to the customer. If you can squeeze that waste of the system then you can tactically improve your profit margins.” In addition to moving its own production, GM is encouraging parts makers to move or build new facilities closer to GM assembly plants.

This post provided courtesy of Jay and Barry’s OM Blog at www.heizerrenderom.wordpress.comProfessors Jay Heizer and Barry Render are authors of Operations Management , the world’s top selling textbook in its field, published by Pearson.

The Disappearing Supermarket Self Check-Out

OCTOBER 14, 2013

Self checkout machines at supermarkets require a lot of human intervention

Computers seem to be replacing humans across many industries, and successfully so in the service sectors such as bank and hotel lobby ATMs and airport kiosks, reports The Wall Street Journal (Oct. 6, 2013). But these tasks—along with more routine computerized skills like robotic assembly lines—share a common feature: they’re very narrow, specific, repeatable problems, ones that require little physical labor and not much cognitive flexibility. In supermarkets, self-checkout machines’ deficiencies illustrate the limits of computers’ abilities to mimic human skills.

The human supermarket checker is superior to the self-checkout machine in almost every way. The human is faster. The human has a more pleasing interface. The human doesn’t expect us to remember or look up codes for produce, she bags the groceries.

Self check-out works well enough when you want just a handful of items, when you don’t have much produce, when you aren’t loaded down with coupons. What’s so cognitively demanding about supermarket checkout? Checkout people all point to the same skill: identifying fruits and vegetables. Some supermarket produce is tagged with small stickers carrying product-lookup codes, but a lot isn’t. It’s the human checker’s job to tell the difference between green leaf lettuce and green bell peppers, and then to remember the proper code. “It took me about three or four weeks to get to the point where I wouldn’t have to look up most items that came by”, said one clerk.

National supermarket chain Jewel-Osco is getting rid of self-checkout lanes from some of its stores. The firm said it’s an effort to reconnect personally with all of its customers despite the higher costs the shift entails. Theft is also a concern driving some grocers away the unmanned check-outs, as are hassles such as liquor and other purchases that require an employee to step in. Self check-outs generally have one staff member assisting customers at 4-6 stations at once.

This post provided courtesy of Jay and Barry’s OM Blog at www.heizerrenderom.wordpress.comProfessors Jay Heizer and Barry Render are authors of Operations Management , the world’s top selling textbook in its field, published by Pearson.