According to David Simchi-Levi, Professor of Engineering Systems at MIT Sloan, “a growing number of U.S. executives are moving some production operations back from overseas.” While there are a great number of factors driving that trend, one is the need for supply chain flexibility. Today’s global supply chain presents a significant amount of risk, mostly due to the combination of geographically diverse supply chains and Just-in-time (JIT) manufacturing that results in low inventory levels. Continue reading
As MIT Sloan Professor John Sterman told MIT Technology Review, “there’s no actual beer in the Beer Game.” Instead, it’s an exercise for MIT Sloan students that simulates the supply chain of the beer industry. The roles include retailer, wholesaler, distributor, and brewer; the goal is to make operating costs as low as possible.
The Beer Game demonstrates the fluctuations of inventories and backlogs and how they impact the bottom line. In the real world of the “beer game”—that of the craft beer industry—the stakes are very high. And, one wonders if they’d benefit from mapping their own risk by playing MIT’s Beer Game.
The return of manufacturing to the U.S., also referred to as the “repatriation” or “re-shoring” by American and non-American companies alike, on the surface sounds like good news for employment. However, this is not necessarily the case.
Although manufacturing output over the last 60 years has grown roughly by 3.7% annually, employment has stayed mostly flat during this time. Why does this continue to be true, even as many companies have been moving manufacturing back to the U.S. since 2010?
When was the last time you re-thought your operations processes? Are they still relevant?
Process innovation and creativity are key elements to successful operations strategies. Companies reluctant to rethink their operations processes can learn a lot from those companies that successfully applied process innovation and creativity to their value chain, including:
- IDEO, a small design firm that has incorporated creativity into its design and development process, resulted in the company holding more than one thousand patents and produced the first commercial mouse, the first commercial laptop, and the first stand-up toothpaste tube.
- McDonald’s Corporation, whose operations strategies include balancing certainty and discipline with creativity which resulted in franchises creating some of the icon’s most famous items, such as the Big Mac, Filet-O-Fish, and Egg McMuffin.
- CVS, where process design engineering principles were used to improve the pharmacy order fulfillment process.
- And, of course, Procter & Gamble (P&G).