Category Archives: Domestic Business

Why the VW Vote to Reject a Union is Big News

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FEBRUARY 19, 2014

vwThe presence of labor unions can have a major impact on a company’s decision where to locate a manufacturing plant. So when workers at the Tennessee VW auto factory voted 712 to 626 last week against joining the United Automobile Workers, it was national news. VW did not oppose unionization, reports The New York Times (Feb. 17, 2014), and seemed to give tacit approval for unionization as a step toward establishing a “works council” at the plant. A works council is a committee, common at German factories, in which white-collar and blue-collar workers elect representatives who establish policies on issues like work hours, vacations and standards for firing workers. But it would be illegal under U.S. law for a company to establish a works council unless workers first voted to have a union represent them. Had a works council been set up at the VW plant, it would have been the first in the U.S.

U.A.W. officials were stunned by the defeat; they had expected to win because VW was not fighting the effort and, just months before, a majority of the plant’s employees had signed cards saying they favored union representation. One industry expert called the loss “a very serious setback for the union, a setback that will resonate throughout the South.” The U.A.W. campaign was clearly hurt by the anti-union sentiment common in the South, as well as an intense campaign by anti-union workers inside the plant who argued that they did not need a union or union dues because VW already treated and paid them well. Wages at the plant average $19.50 an hour.

Union officials accused Tennessee Senator Bob Corker of poisoning the atmosphere and preventing a fair election before the vote. Corker had told the media that VW had assured him they would add another production line at the plant (instead of going to Mexico) to make a new SUV if the factory’s workers rejected the union.

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.

The Logistics of Valentine’s Day Roses

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FEBRUARY 15, 2014

Valentine_Rose

U.S. consumers buy the most flowers on Valentine’s and Mother’s Days–and getting fresh roses to market takes speed, the right temperature, and skill. Like all perishable products, flowers require specific temperatures to maintain freshness, without which they will lose their bloom.

Complicating this need for the ideal temperature, flowers travel a long way from field to store reports Supply Chain 24/7 (Feb. 13, 2014). Eighty percent of all flowers sold for Valentine’s Day are shipped from Latin America, with 12% coming from domestic production and 8% arriving from other locations. In 2013, 231,466 1,000-stem-count bushels of roses were imported into the U.S. from Latin America. Most of these came from Colombia (142,000) and Ecuador (79,000).

Shipping starts weeks before the holiday and the best flowers arrive early. The graphic shows the 2-week path of a rose, from the fields of Latin America to the hands of its recipient.

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.

Chipotle’s Operations Strategy for Faster Service

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FEBRUARY 10, 2014

chipotle-service

Lines snaking out the door at lunchtime have long been a bottleneck to growth at Chipotle, the burrito chain, writes Quartz.com  (Jan. 31, 2014).  But the fast-food firm managed to speed up service by 6 transactions per hour at peak times this past quarter by implementing what it calls the “four pillars of great throughput.” Here they are:

+“Expediters” That would be the extra person between the one who rolls your burrito and the one who rings up your order. Her job? Getting your drink, asking whether your order is for here or to go, and bagging your food.
+“Linebackers” The people who patrol the countertops, serving-ware, and bins of food, so the ones who are actually serving customers never turn their backs on them.
+“Mise en place” What in a regular restaurant means setting out ingredients and utensils ready for use means, in Chipotle’s case, zero tolerance for not having absolutely everything in place ahead of lunch and dinner rush hours.
+“Aces in their places” A commitment to having what each branch considers its top servers in the most important positions at peak times, so there are no trainees working at burrito rush hour.
Chipotle is also mulling incorporating a Starbucks-style mobile payment system (the chain already accepts online orders for pick-up), which the company is hopeful will help funnel customers in and out of its lines a bit faster. But the company is open to a number of other options, too, so long as they help speed up service.

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.