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UNIVERSITY OF ILLINOIS AT URBANA-CHAMPAIGN
COLLEGE OF COMMERCE AND BUSINESS ADMINISTRATION
BADM 467 - PROCESS MANAGEMENT
SUMMER 2003

Dilip Chhajed
chhajed@uiuc.edu
323 DKH
office hours:

Nick Petruzzi
petruzzi@uiuc.edu
328D DKH
office hours:

Description
Process Management includes a myriad of activities: insuring that a product or service is of high quality, choosing the
appropriate design and technology for producing a good or service, planning and controlling the flow of materials or
customers so that lead times are minimized, and distributing finished goods or services. Relevant decisions range from how
much material to order for making a product, to determining how much capacity is needed to provide a good level of service,
to evaluating which technology will best meet a company's needs. In short, this course focuses primarily on developing and
applying tools and techniques to ensure that the right products and resources are at the right place at the right time so as to
maximize profit within a business process or supply chain. The products could be either goods, services, or both; and the
resources could be either material, people, money, information, or any combination of the four.
In the first part of this course, we will focus on process design and improvement issues by studying the relationships between
key process parameters such as capacity and throughput, and by analyzing processes in order to identify and eliminate
bottlenecks. And, in the second part of the course, we will focus on process coordination issues by studying methods for the
efficient planning and controlling of critical resources.
Specific objectives are:
To describe an operating system or a business process and how it can be used as a competitive weapon in a variety of
manufacturing and service organizations.
To understand decisions faced by operations managers, the skills required to make these decisions effectively, and how
these decisions integrate with the overall strategy of the firm.
To highlight many of the interfaces between the operations function and other functions of the firm such as finance,
accounting, and marketing.
To develop skills in analyzing operating processes, assessing economic trade-offs, and defining planning and control
mechanisms.
Design
The approach to this course is both lecture and case analysis. We will develop concepts and tools in class, but the true test
in learning a new concept or tool is whether or not it can be applied.
Working in teams of 5, you will have the opportunity to hone skills and explore application possibilities through homework
problem sets and case studies. The team aspect is important because group deliberation often opens avenues of thought
otherwise not considered even to exist. Of the cases that we study, some are geared toward stimulating thinking about an
issue (e.g., Toyota Motor Manufacturing), and others present a business problem that requires diagnosis, analysis, and
development of a plan of action (e.g., Sea Pines Racquet Club). However, all cases have been chosen to illustrate basic
concepts of process management as they apply to a variety of organizations and to stimulate discussion between you and
your classmates. Therefore, class participation is a necessary element in the process.
You may organize yourself into teams of 5, but try to have your team in place by the second session so that you will have
sufficient time to collaborate before the first assignment is due. If your team is not established by the third session, please
let me know by the beginning of class; I will help.

Materials (Required)
(1) Ritzman and Krajewski (2003), Foundations of Operations Management, First Edition, Prentice-Hall, New York.
(Abbreviated as KR.)
(2) Goldratt, E.M. (1992), The Goal: A Process of Ongoing Improvement, Second Edition, North River Press.
(3) Readings and Cases:
Michigan Manufacturing, HBS Case Study (# 9-694-051)
Dore Dore HBS Case Study (# 6-689-030)
Manzana Insurance Fruitvale Branch, HBS Case Study (#9-692-015)
Toyota Motor Manufacturing, U.S.A., Inc., HBS Case Study (# 9-693-019)
Benihana of Tokyo, HBS Case Study (# 9-673-057)
Sea Pines Racquet Club, HBS Case Study (# 9-674-011)
Johnson Controls, Automotive Systems Group HBS Case Study (# 9-693-086)
Grading
Your course grade will be based on two exams and 4 homework assignments. The homework assignments comprise problem
sets and case reports; they are to be completed by your team. Each exam must be an individual effort (surprise, surprise).
A letter grade for the course (A+, A, A-, B+, B, B-, C+, C, C-, F) will be assigned based on a relative scale.
Homework Assignments
40%
Exam I
30%
Exam II
30%
TOTAL
100%
Homework Assignments
Each team is required to submit 5 homework assignments (each case is worth 5% and each problem set is worth 10% of the
grade). The purpose of the homework is to provide a structured framework for applying concepts and tools from class and
to serve as practice for the exams.
The due date for each assignment is as follows:
Homework 1: Case Report (Dore-Dore)
Homework 2: Case Report (Manzana)
Homework 3: Problem Set
Homework 4: Problem Set
Homework 5: Problem Set

Sessions 6 (Jun 24)

Sessions 9 (Jun 30)
Session 10 (Jul 1)
Session 18 (Jul 15)
Session 25 (Jul 28)

All assignments are due at the beginning of class. You may want to bring an extra copy for yourself.
Case Reports and Preparation. Some of the homework assignments will be in the form of case reports. In addition, cases
often will be assigned as preparation for classroom discussion.
Case reports should not be more than one page in length (single-spaced, font size 12, one inch margins) with up to two
additional pages of exhibits. Divide your report into three sections:
Background (What is the case about? Identify one or two major problems.); Analysis (what are the causes of the problem(s)
identified? What are the alternatives to solve the problem? , and Recommendations (what is your recommendation to solve the
problem in short term and long term? Address any implementation concerns.). A grading penalty will be assessed for
reports/outlines that do not conform to these formats. Additional pages will be ignored, so please adhere to the page limits.
A list of case discussion questions has been prepared to guide your analyses of the cases, both written and otherwise. In
general, these questions are not all-inclusive or exhaustive. They are intended to guide your analysis of the case, but not
preclude you from exploring other avenues or questions that may occur to you. On the other hand, it is usually true that clear
and comprehensive answers to the assigned questions will comprise a good written analysis of a case. So, if in doubt, cover
the questions thoroughly first, then explore other avenues for an excellent report.
No outside research is expected for any of the case reports.

CASE DISCUSSION QUESTIONS

MichiganManufacturing
1. StudyExhibit2inthecasecarefully.Canyouexplainwhyoverheadcostsvarysogreatlyfromplanttoplantin
MichiganManufacturingssystem?
2. WhyhavemanagersintheHeavyEquipmentDivisionunderinvestedinthePontiacPlant?
3. ShouldNoelleAllenclosethePontiacplant?Ifso,whatshouldshedowiththeproductscurrentlymanufacturedin
Pontiac?Shouldshefollowtherecommendationsofhertaskforce?Ifyoubelievesheshouldcontinuetooperatethe
plant,whatifanything,shouldshedototransformitintoaprofitableoperation?
Dore Dore
1.
How does the performance of the traditional operation and cellular manufacturing system in the childrens
knitwear operations differ?
2.
Should Dore-Dore implement cells in its hosiery production area? If so, would you suggest any changes to the cell
design as currently proposed by M. Enfert? If not, what alternative approaches could Dore-Dore take to address the
concerns M. Marguet raises in the case?
Manzana Insurance
1. What is the basis for competition in the market that Fruitvale serves?
2. What is your assessment of the rules used to assign priorities at Fruitvale?
3. What are the important measures of operating performance for the Fruitvale branch? How well has the branch been
performing according to these measures?
4. Why have profits been deteriorating over the past year?
5. What are your recommendations for managerial action? In particular, how should Manzana respond to Golden Gates
new policy of one-day service?
Toyota Motor Manufacturing
1. As Doug Friesen, what would you do to address the seat problem? Where would you focus your attention and solution
efforts?
2. What options exist? What would you recommend? Why?
3. Where, if at all does the current routine for handling defective seats deviate from the principle of the Toyota Production
System?
4. What is the real problem facing Doug Friesen?
Benihana of Tokyo
1.
What is the Benihana concept (what differentiates Benihana from other restaurants)?
2.
Consider the typical flow of customers through Benihanas. How well thought out is Benihanas operating system?
Sea Pine Racquet Club
1.
What is the dilemma facing John Baker? What are his options? (Think in terms of supply and demand.)
2. What should he do for the coming season? For next year?
Johnson Controls
1.
Analyze the process flow at the Georgetown Plant. How does the flow of information fit in?

TENTATIVE COURSE OUTLINE

Jun 16

Session 1

Topic:
Readings:

Introduction to Process Management

1. Chapter 1 (KR).

Jun 17

Session 2

Topic:
Readings:

Process Types
Chapter 2 (KR); LFKHS and Chaparral Steel plant tours in CD-ROM

Jun 18

Session 3

Topic:
Case:
Readings:

Process Strategy
Michigan Manufacturing, prepare answers to the Case Discussion Questions
Chapter 2 (KR)

Jun 19

Session 4

Topic:
Readings:

Process Management: Bottlenecks

Chapters 1-12 of The Goal

Jun 23

Session 5

Topic:
Readings:

Process Analysis; Line Flow

Chapters 13-20 of The Goal

Jun 24

Session 6

Topic:
Case:
Submit:

Process Analysis I: Cell Process

Dore Dore, prepare answers to the Case Discussion Questions
Case Report

Jun 25

Session 7

Topic:
Case:
Readings:

Process Quality Management

Cranston Nissan in CD-ROM. Prepare questions at the end of the case
1. Chapter 5 (KR)

Jun 26

Session 8

Topic:
Readings:

Process Quality Management: Statistical Process Control

1. Chapter 5 (KR)

Jun 27

Plant Trip (8:00 am 12:00 noon)

Jun 30

Session 9

Topic:
Readings:
Case:
Submit:

Process Analysis II: Service Application

1. Chapter 6 (KR)
Manzana Insurance, prepare answers to the Case Discussion Questions
Case Report

Jul 1

Session 10

Topic:
Readings:
Submit:

Lean Production
Chapter 13 (KR)
Homework 1 (Problem Set)

Jul 2

Session 11

Topic:
Case:

Lean Production
Toyota Motor Manufacturing

Jul 3

Session 12

Topic:
Readings:

Exam I

Jul 7

Session 13

Topic:

No class in lieu of the plant trip

Jul 8

Session 14

Topic:
Case:

Integrated Operations
Benihana

Jul 9

Session 15

Topic:
Reading:

Waiting Line Management

1. Supplement 6S, pages 181 186 (KR)

Jul 10

Session 16

Topic:
Case:

Capacity Planning
Sea Pines Racquet Club

Jul 14

Session 17

Topic:

Coordinating Supply and Demand

Jul 15

Session 18

Topic:
Reading:
Submit:

Resources Planning
1. Chapter 12, pages 399 409 (KR)
Homework 2 (Problem Set)

Jul 16

Session 19

Topic:
Readings:

EOQ Decision Framework

1. Chapter 10, pages 323 334
2. CD-ROM Supplement H, H.4 H.7

Jul 17

Session 20

Topic:
EOQ Application
Challenge: To be issued

Jul 21

Session 21

Topic:
Readings:

Continuous Review Systems

1. Chapter 10, pages 335 342 (KR)

Jul 22

Session 22

Topic:
Readings:

Periodic Review Systems

1. Chapter 10, pages 342 347 (KR)

Jul 23

Session 23

Topic:
Readings:

Short Life-Cycle Systems

1. CD-ROM Supplement H, H.7 H.10 (KR)

Jul 24

Session 24

Topic:
Case:
Readings:

Just-In-Time Manufacturing
Johnson Controls, Automotive Systems Group
1. Chapter 13 (KR)

Jul 28

Session 25

Topic:
Activity:
Submit:

Revenue Management Part I

Yield Management Game
Homework 3 (Problem Set)

Jul 29

Session 26

Topic:

Revenue Management Part II

Jul 30

Session 27

Topic:

Supply Chain Incentives and Control

Jul 31

Session 28

Topic:

Supply Chain Incentives and Control

Aug 4

Session 29

Topic:
Readings:

Supply Chain Coordination

Beer game (Class in 370 WH at 8:30 am)

Aug 5

Session 30

Topic:

Supply Chain Coordination

Aug 6

Session 31

Topic:

Review Session

Aug 7

Session 32

Topic:

Exam II