Author Archives: AccountMate

Trying to Shutter a French Auto Plant

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SEPTEMBER 10, 2013

peugeot plantAt Peugeot’s soon-to-close car factory just north of Paris, writes Barron’s Business (Sept.9, 2013), management is grappling with an ambitious year-end production quota: finding jobs for the factory’s nearly 3,000 workers. This was the promise Peugeot made to win government and union approval for closing the largest French auto plant in 2 decades. The job placement effort, costing $749 million, underscores how expensive and time consuming it is to close even a single factory in Western Europe, when it is politically feasible at all.

Peugeot joins companies, including GM and Ford, that have begun the process of closing plants in Western Europe, where a glut of excess production capacity has made many factories unprofitable. But even though more shutdowns are necessary to adapt to depressed European sales, tough experiences for all 3 car makers may give others pause.

“It can cost a billion euros ($1.31 billion) or more to close a vehicle-assembly plant in Western Europe,” said one expert, who said companies have put off closing plants because of the cost. “That’s not an environment that encourages investment.” (U.S. factory shutdowns were quicker and cheaper to pull off. In the U.S., auto makers culled 24 factories during the 2008 economic meltdown.)

Peugeot has been through a year long wringer, with political obstacles followed by union protests that at times turned violent. In the end, the company agreed to give its workers a package of retraining, job placement and severance benefits that are generous even by French standards. As an example, a dozen auto workers were taking shifts driving a bus in a parking lot to train for future jobs Peugeot has lined up for them at Paris’s transit agency. Peugeot is paying for the $13,000-a-person training. “It is the least they can do,” said one worker.

“The alternative to shutting down capacity is being more flexible with capacity,” said Peugeot’s HR chief.

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

New Looks at Loading and Boarding Planes

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SEPTEMBER 9, 2013

alaska air jetwayLoading an airplane quickly and efficiently isn’t an easy task. “It should be, and could be, but the humans involved can’t seem to get with the program,” writes Wired Magazine (Aug. 28, 2013). Better loading means more time in the air – which is where airlines make their money. The boarding process is far from standard – there are almost as many boarding procedures as there are airlines. This problem has long been pondered by operations managers, without a definitive answer. But there have been a few promising experiments.

The most unusual and deceptively simple idea is opening the door at the rear of the plane in addition to the door at the front. Alaska Airlines is trying this. The idea isn’t entirely new–many airlines open the front and rear doors at those airports where there is no jetway, only a staircase leading to the tarmac. Alaska has a new tool to help facilitate using both doors–a solar-powered ramp. Mounted on wheels, the ramp can be driven to the backdoor of the airplane, and passengers make two switch-back turns down the ramp to the ground, providing an alternative to stairs for easy suitcase rolling and wheelchair access. Using the aft door to unload passengers can reduce the turnaround time by 10 minutes.

One of the big reasons boarding has slowed to a crawl is people are carrying more bags aboard to avoid baggage fees. So American Airlines is experimenting with letting those who checked their bag board first. Ideally, these passengers will simply walk to their row and sit down. The airline says that overall it has shaved a few minutes off the boarding process.

Although airlines commonly board by sections, it’s generally a free-for-all with regard to where in that section you are. United uses the “outside-in” method of seating window passengers first, then middle, then aisle seats. The airline has been organizing passengers in better defined lines at the gate for each group, with the hope is there will be less of a bottleneck.

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

3-D Printing on Paper

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SEPTEMBER 6, 2013

Printing of the head, from the movie "Bring Me the Head of Alfredo Garcia"

The exciting topic of 3-D printing continues to evolve, now with a new process called “Selective Deposition Lamination” (SDL). Each 3-D printer builds up objects, layer by layer, but what the layers are made of varies from one to another. Some extrude filaments of molten plastic. Some spray special “inks,” such as liquid polymers that solidify when exposed to ultraviolet light. Some use powdered plastic or powdered metal that is then fixed in place with a laser or an electron beam.  For all of these, the process can be expensive, as manufacturers put a high markup on their printing materials, just as the producers of 2-D printers do on their ink. Now, reports The Economist (Aug. 10, 2013) there is yet another way.  Office supply company Staples is introducing machine prints that are made of a substance that Staples has in abundance: sheets of paper–at 5% of the cost of the materials for other 3-D systems.

In the case of SDL, the process starts by the machine applying drops of adhesive to a sheet of paper. Then the machine slides a second sheet of paper on top of the first and presses them together to bond them. The process continues, layer by layer, until the object is complete. It is then removed from the machine, the supporting material is peeled away, and the finished item, which has a consistency similar to wood, is revealed. Adding color involves old-fashioned 2-D printing. Each sheet, before it is put in the stack, is printed top and bottom with appropriate ink in a pattern that follows the edge of the item at the level this sheet of paper will occupy.

Staples hopes people will use their imaginations and print all sorts of other things as the firm expands the service throughout its chain. One day, as more office documents migrate to cyberspace, 3D printing with paper may even overtake the 2D sort. (For a lengthy overall look at 3-D printers, see The Economist –Sept. 7, 2013).

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