#

1
2

Date
Sept. 7
Sept. 12

3
4

Sept. 14
Sept. 19

Sept. 21

6
7
8

Sept. 26
Sept. 28
Oct 3

9
10
11
12

Oct 5
Oct11Tues.
Oct 12
Oct 17

13 Oct 19
14
15
16
17
18
19
20
21
22

Oct 24
Oct 26
Oct 31
Nov 2
Nov 7
Nov 9
Nov 14
Nov 16
Nov 21

OM440 Operations Strategy, Fall 2016

Professor Stephen Rosenthal
Topic
Case/Reading & project due dates
Course Overview
OST Ch1
Introduction to Operations
OST Ch2
Strategy
Crown Equipment Case
Service strategy
MS Ch5 + individual written
exercise. Initial meeting with team.
Understanding Implications of
Operations Strategy at Galanz
Order Qualifiers & Order Winners
Capacity Strategy
OST Ch3 Teams narrow options.
Playa Dorada Tennis Club
Determining Organiz. Boundaries OST Ch4
Team Project Proposals Due
Tombow Pencil Corp
Dell Computer Field Service
MS Ch7 + written exercise
Designing and Managing
OST Ch5
Operating Networks
Team Mini-Presentations
Review Session
In-Class Exam
Information Technology & Ops
Root-Cause Analysis
New Process Development
Superior Project Management

Hard copy of a review question is due

OST Ch6
UnitedTech. Corp F&S:Field Ops
OST Ch7
Product Development at Dell
OST Ch8
Jefferson County School System A,B
Mast Kalandar

Prioritizing Growth Opportunities

Through Analysis
23 Nov 28
Managing the Investment Planning OST Ch9
Process
24 Nov 30
Project Portfolio Management
Le Petit Chef
25 Dec 5
Driving Operations Improvement
OST Ch10 Project Executive
Summaries Due
26 Dec 7
Team Project Presentations
15 min. + Q&A
27 Dec 12
Team Project Presentations and 15 min. + Q&A
Course Wrap-up
*OST= Operations, Strategy, and Technology: Pursuing the Competitive Edge
#MS= Managing Services: Using Technology to Create Value, see SMGTools
Contact information: Room 560, office hours Monday and Wed. 11-12 or by appointment

Operations Strategy (OM440)

Fall 2016
Professor Stephen R. Rosenthal
Office: SMG 560
Office Hours: Monday and Wednesday 11:00-12:00 or by appointment
Phone: 353-4288
E-mail: srrosent@bu.edu
Pre-requisites
Before enrolling in this course you must have completed OM323. This requirement cannot be
waived.
Course Overview
Operations Strategy deals with operations decisions having a long-term or irreversible impact on
the competitive viability of the firm. This course provides an introduction to the concepts of
operations strategy and develops useful patterns for thinking about strategic issues whether they
appear in an operations context of manufacturing, service delivery, or product/service design and
development. Students concentrating in operations management will find these concepts critical
as they advance to positions of responsibility in their professional lives. Students pursuing
careers in marketing, finance, human resources, or entrepreneurship will learn important ways of
understanding the operations strategy of a firm, its relationship with the business as a whole, and
its potential for providing a competitive edge.
Included in the course are timely perspectives on such topics as: capacity strategy, vertical
integration and outsourcing, operating networks, information technology and operations, new
process development, new product development, and superior project management. This course
syllabus has detailed information on what you will be doing for each OM440 class. Consult it
frequently and use it as a guide for class preparation.
Course Objectives
This course has two teaching objectives:
(1) to develop skills and perspectives for identifying, evaluating, and implementing operations
strategies.
(2) to become familiar with emerging opportunities and management challenges associated with
a variety of operations strategies, with special emphasis on the role of technology.
More specifically, students will develop the following:
Skills - the ability to:
describe an organizations operational competencies, capabilities and capacities
apply tools/methodologies for formulating and assessing operations strategy
specify performance measures and targets to guide the implementation of operations
strategies
apply project management principles for achieving new operations strategies

communicate your understanding of complex issues clearly and concisely and advocate your
own ideas effectively

Perspectives - the ability to:

translate a business strategy into specific strategic operational challenges
understand the managerial roles and responsibilities for implementing an operations strategy
These skills and perspectives will be developed through class assignments, projects, and
discussions. OM440 places particular emphasis on students ability to think critically and to
communicate both verbally and in writing. The course also requires students to apply concepts
described in class to organizations with which students are familiar, thus enhancing the ability to
apply course frameworks to real-world phenomena.
Text and Materials
The textbook for the course is Operations, Strategy, and Technology: Pursuing the Competitive
Edge by R. Hayes, G. Pisano, D. Upton, And S. Wheelright, Wiley (2005), available from Barnes
& Noble and elsewhere. The course packet is available through the Questrom Copy Center.
Other materials are posted on the OM440 QuestromTools web site, including selected chapters
from Managing Services: Using Technology to Create Value by M. Davis and J. Heineke
(2003).
Course Requirements and Expectations
OM440 has these several requirements with associated grade weights:
Class preparation, written assignments and participation: (30%)
Mid-term exam (30%) short answer closed-book, in class.
Teamwork: mini-presentation, executive summary and final presentation (30%)
Contribution to team learning (10%) based on end-of-semester peer evaluations
Class Preparation, Participation and Attendance
The class preparation, written assignments, and participation portion of the grade (weighted
30%) will be based on class discussions and written exercises throughout the semester, following
expectations described below. Preparation questions for text readings and cases and descriptions
of required written exercises are provided in the detailed syllabus below. For each class, you
should plan to contribute to class discussions that deal with these and related questions. When
cases are assigned, you should come to class prepared with quantitative or operationally-specific
responses as appropriate. You should inform the instructor prior to class whenever you are
unprepared, or if you have identified a relevant current event to offer for brief class discussion.
There will be some cold calling in every class. The purpose of cold calling is not to create
anxiety but to ensure that participation opportunities are shared, that all class members contribute to
class discussions, and that all members are prepared for these discussions. Positive contributions
may include: providing germane illustrations; applying a particular tool or technique; helpful
summarizing; making observations that link or integrate concepts or discussion; responding
effectively to questions; asking perceptive questions; presenting or supporting alternative
positions. Being wrong will not count against you, but it will also not help. Making repetitive
comments that do not add to the discussion will also not help, and may hurt if these comments
3

interfere with the ability to discuss issues in depth. Students who dominate discussions,
discourage, intimidate, or show a lack of respect for other participants, or diminish the value of
the class in any way, will be penalized. In particular, you are expected to treat colleagues with
respect, to disagree with an idea without discrediting the speaker, to help others articulate their
points of view; and to be sensitive to the use of airtime. Because attendance will naturally affect
the class participation grade, you should not take this course if you anticipate missing more than
three classes. More than this number of absences will materially affect your final course grade.
Academic Conduct: Students are expected to comport themselves with the highest
standards of academic conduct follow the rules outlined in BUs academic conduct code.
Unless otherwise announced in class, the in-class exam and all written assignments
aside from project deliverables are expected to be your own individual work with no
assistance from any person or external source. Preparation of cases for class discussion
may be done in study groups but there should be no assistance from any other sources.
You are not to access or use any materials that were created or distributed in previous
years. With respect to the team project assignment, building on outside sources (including
websites, newspaper or journal articles or conversations with your classmates, advisors, or friends),
or paraphrasing or quoting external sources is encouraged, providing that they are all properly cited.
Plagiarism (passing someone elses work off as your own) is an extremely serious academic and
ethical violation and will result in academic charges ignorance or oversight does not excuse
borrowing ideas or words without attribution. If unsure, err on the side of caution by citing all
sources.

Team Project: purpose is to apply specific course techniques and skills in a collaborative
team setting. Students will be assigned to teams of three early in the semester
to work collaboratively on the course project and final presentation. Each team
will identify a real and specific manufacturing or service organization with a
pressing business problem. The problem needs to be substantial enough that it
cannot be solved in less than a year and fundamental enough that solving it
will require significant strategic change but not just copying the approach of a
competitor. To be a suitable choice, your team needs to understand why the
solution to this companys problem will depend critically on pursuing an
effective operations strategy. You will also need to determine before proposing
this company that it is a feasible choice: this requires identifying in advance
adequate available sources of information. On October 3 your written project
proposal is due: less than a page that concisely identifies your company (no
company background needed) and why you believe that it is a suitable and
feasible choice. Once the proposal is approved, your team will proceed to
conduct preliminary research on its chosen organization in order to identify
the elements that are especially central to that organizations operations
strategy and document the pressing problem that will require making
substantial change to this operations strategy in the upcoming 1-2 year period
(5 minute mini-presentation October 19). Then your team will study the
identified problem and produce a 12-minute presentation (December 7 or 12)
that includes analysis, conclusions and actionable recommendations using
relevant course frameworks and concepts. The team will also prepare a written
executive summary (due December 5) taking the perspective of an outside
consultant. Additional guidelines, warnings, and performance criteria for this
team application assignment will be provided in class.

Class Assignments
Class 1 September 7
Objectives: Understanding the difference between Operations Management in the old and new
economies. Introduction to course objectives, contents, and requirements.
Read: Operations, Strategy and Technology (OST) Chapter 1
1. Review your OM323 notes to remind yourself about key OM topics and terms.
2. Make a list of new terms in OST Chapter 1 that need to be reviewed in class.
Class 2 September 12
Objective: Understanding the concept of strategy and what it means to have an operations edge
Read: Operations, Strategy and Technology (OST) Chapter 2
1. What is the difference in the scope and contents of strategy at corporate, business unit,
and functional levels?
2. What does it mean to have a contingency theory of operations strategy?
3. What are the key decisions involved in operations strategy implementation?
4. What does it mean to have a dynamic capabilities-based approach to operations
strategy and how does this differ from the classic contingency view?
5. What is the difference between best practice and new practice. Which is preferable
from a strategy viewpoint? Why?
Class 3 September 14
Objective: Assessment of a competitive strategy involving product design and manufacture
Case: Crown Equipment Corporation: Design Services Strategy
Prepare:
1. What has been Crowns business strategy? What role has design played in supporting
this strategy? What role has operations played in supporting this strategy?
2. Why has Crowns 30-year relationship with RichardsonSmith (RS) been so
successful? How might this relationship change under the new ownership of RS?
3. Describe Crowns distinctive competence.
4. What specific actions should Tom Bidwell take about their design needs?
Class 4 September 19
Objective: Defining service strategies
Read: Managing Services Chapter 5 (posted under Course Materials in SMGTools)
1. Written Individual Assignment Describe how the generic strategy model shown in
Exhibit 5.1 interrelate for a specific service organization you know well. For this
assignment use the template for completing this assignment posted in QuestromTools
Assignments, not Exhibit 5.1. Do not include lengthy verbal descriptions. Include arrows
linking related strategic elements with each other and with specific associated
performance metrics.
2. When reading the assigned chapter, pay special attention to the differences and similarities
between Operations Strategy for a manufacturing organization vs. a service organization.
3. Schedule initial meeting with your assigned team to review the OM440 project assignment and
deliverables. Try to make a list of suitable and feasible companies of interest as defined in
course description. Challenge each other to apply these two acceptance criteria correctly.
6

Class 5 September 21
Objective: Application of order qualifier and order winner thinking to operations strategy
Case: Operations Strategy at Galanz
Prepare:
1. During the early stages of Galanzs development, what were their order winners and
order qualifiers (rank order the importance of cost, quality, flexibility, delivery,
service and innovation)? How has this changed through the years?
2. What is the role technology has played in the success of Galanz?
3. What have been Galanzs competitive business strategies over time? What operations
strategies are needed to support these business strategies?
4. What are the differences between OEM/ODM versus OBM in terms of production,
design, marketing, distribution and customer service?
5. If the company tries to shift from OEM/ODM to OBM in the international market,
how should the company set strategic priorities and utilize its resources and
capabilities?
Class 6 September 26
Objective: Understanding capacity strategy
Read: Operations, Strategy and Technology (OST) Chapter 3
1. What factors will affect an operations actual productive capacity?
2. What is a capacity strategy and what are some examples of such a strategy?
3. What are economies of scale? What are the differences between a facilitys size and
its scale? What does this have to do with operations strategy?
4. What are the sources of diseconomies of scale?
5. What are some different philosophies that companies may use to manage capacity
expansion? What are their strengths and weaknesses?
Meet with your team to narrow down the choice of the company you will study (see note
below).
Class 7 September 28
Case: Playa Dorada Tennis Club
Objective: Application of capacity strategy
Prepare:
1. What is the dilemma facing Douglas Hall? What are his options?
2. First, make an explicit assumption about the capacity target in this case. Think in
terms of the strategic role of tennis PD Resort.
3. Next use the data in the case with the posted Xcel spreadsheet (Resources/Course
Material) to answer these questions. How many tennis courts will be needed in March
2007 and April 2007? How about March 2008 and April 2008? (Assume the growth
rate stays the same)
4. How do these requirements compare to present capacity? What should Douglas Hall
do for the coming season? For the next year?
Before the next class, meet with your team to finalize the choice of the company you will
study. Be sure that you have thought about both the suitability and feasibility of
candidates you are considering. This may take some initial research to provide a comfort
7

level that candidate companies depend critically upon their operations strategies, that
they face either extraordinary opportunities or challenges that depend on operations
strategy, and that you will have access to information that will allow you to formulate
analysis of their longer-term options. Play devils advocate with each other on this.
Class 8 October 3
Team Project Proposals (described in syllabus introduction and guidelines in
SMGTools Resource/Assignments posting) due in class on October 3
Objective: Understanding issues in vertical integration and outsourcing
Read: Operations, Strategy and Technology (OST) Chapter 4
Prepare:
1. Why are vertical integration and outsourcing discussed in the same chapter?
2. What choices are available and what factors should influence the decision on which
option to choose?
3. What is the concept of strategic lock-in? Is it good or bad? Why?
4. What are intangible assets? How do they affect the buyer-supplier relationship?
Class 9October 5
Objective: Applying concepts of vertical integration and outsourcing in manufacturing
Case: Tombow Pencil Co., Ltd.
Prepare:
1. How has the business environment surrounding Tombow been changing?
2. Evaluate the performance of the production system Tombow has developed for Object
EO. What are its strengths and weaknesses? How does that system compare to the one
used for wood-cased pencils?
3. Calculate the gross and net margins of the Object EO project at present? What will it
be if they use part-time labor? Full-time factory workers? (use case & exhibit data)
What do these calculations tell you?
4. What plan of action (do what, how, when?) would you recommend for President
Ogawa for the next few years? Would you consider increasing Tombows ratio of inhouse production? Why or why not?
Class 10 October 11 Tuesday (No class on October 10)
Objective: Applying concepts of vertical integration and outsourcing in service setting
Case: Dell Computers: Field Service for Corporate Clients
Prepare:
1. Describe Dells operational performance and competitive position.
2. Why is the company considering adding large servers to its product array? How does
the competitive landscape differ between Dells existing business and this new
business?
3. Construct for class discussion a generic process flow chart for field service that shows
the activities and decisions to be made.
4. Using this flow chart, if Dell enters this market, identify the options it has for
providing the service in-house or outsourcing all or part of it to a third party. Should
Dell outsource all or part of this service and to whom? If it keeps some or all of this
service in-house, how should it design the necessary service infrastructure?
8

Class 11 October 12
Objective: Designing service processes
Read: Managing Services Chapter 7 (posted under Course Materials in SMGTools)
1. What are the risks associated with designing new services?
2. What is meant by the service concept and why is it a key element of service
strategy?
3. Written Individual Assignment- Keep this concise with a 2-page total limit (1
for (a) and (b) below and 1 for (c). You are planning to open a sports bar in
Boston and would like to identify and implement a service concept that
distinguishes it from some other sports bars.
(a) Develop a service design using the operations decisions framework
described in this chapter. Focus on what is new here for your chosen
service. No need to itemize the individual structural and infrastructural
elements -- just define in no more than page your service concept,
content, and style. Do not include a detailed description of the service
process.
(b) Write a short paragraph that lists all external supply dependencies
(required goods or services that are not owned/produced by but needed by
your sports bar). Think about what is needed but not within your
organizational boundary (Recall OST Chapter 4).
(c) Draw a 1-page service blueprint for the sports bar, with special and
specific indications of all unique aspects of your service concept.
Class 12 October 17
Objective: Designing and managing operating networks
Read: Operations, Strategy and Technology (OST) Chapter 5
Prepare:
1. What is an operating network and what does it have to do with operations strategy?
2. What are some of the key types of operating networks?
3. What does it mean to align infrastructure decisions with operating network structures.
What is an example of such alignment? An example of misalignment?
4. What are the key decisions and responsibilities for managing horizontal operating
networks? Vertical operating networks?
5. What are some of the dynamic effects that can arise when trying to manage each of these
types of operating networks?
Class 13 October 19
Team Mini-Presentations in class (5 minutes) email slides by October 18 at 10pm
Class 14 October 24
Review Session Each student submits a review question in hard copy form
Class 15 October 26
In-Class Exam: Closed book, no notes
9

Class 16 October 31
Objective: The expanding role of information technology in network operations
Read: Operations, Strategy and Technology (OST) Chapter 6
Prepare:
1. What is a lights out factory?
2. What is an Enterprise Resource Planning (ERP) system?
3. What are the potential advantages and disadvantages of a one size fits all ERP
approach?
4. Compare the installation-based and path-based models for IT development.
Class 17 November 2
Objective: Identifying operational problems and associated action plans.
Case: United Technologies Corp. Fire & Security: Field Operations (A)
1. Identify the possible drivers of (types of forces behind) the cost overruns and
develop a cause-and-effect (fishbone) diagram.
2. List possible root causes for these overruns and consider how to test for them.
3. Outline a plan of corrective action for these root causes.
Class 18 November 7
Objective: Strategic process development
Read: Operations, Strategy and Technology (OST) Chapter 7
Prepare:
1. What is the product life cycle concept of innovation?
2. What are examples of industries that do not neatly fit within this model? Why?
3. In what ways may process development capabilities help achieve competitive advantage?
What are some typical performance metrics for measuring advantage?
4. What tools, techniques, and approaches that can be employed to achieve this objective?
Class 19 November 9
Objective: Understanding risk management in a new product development process
Case: Product Development at Dell Computer
Prepare:
1. Is Dell in a crisis situation at this time?
2. What is the management trying to change or improve with their new 18-month
development process?
3: Which battery should Holidays team select: Ni-Hi or LiOn or should they defer the
decision till the qualification phase review? Support your choice with both quantitative
(using decision tree Exhibit 8 case data and assumptions) and qualitative analysis.

10

Class 20 November 14
Objective: Concepts for achieving superior project management
Read: Operations, Strategy and Technology (OST) Chapter 8
Identify (but no details needed now), for your teams company and its success in the future, a
particular project that might strengthen or improve their operations strategy.
Prepare:
1. What is critical path analysis?
2. What are stage-gate approaches for managing product development projects?
3. What are project portfolios, and some key challenges in creating and managing them?
4. What are the key organizational choices and methodologies for designing, prototyping,
and testing new products?
5. What are derivative, platform, and breakthrough projects? What are key
differences in how these kinds of projects should be executed?
Class 21 - November 16
Objective: Understanding issues in procuring new mission-critical information technology as a
component of Operations Strategy
Case: Jefferson County School System (A),(B) posted in QuestromTools Resources/Course
Materials.
Read both cases with special attention to the exhibits in the A case. Prepare:
1. How well defined was the project scope? (See case Exhibits 2a and 2b)
2. What were the critical success factors for this new system?
3. What activities were done well? Poorly?
4. What are the lessons for project management in procuring this system? In
implementing this system?
Class 22 - November 21
Objective: Prioritizing Growth Opportunities Through Analysis
Case: Mast Kalandar (in coursepack) plus 2 Excel workbooks: store economics and trade-offs
both in QuestromTools Resources/ Course Materials)
Prepare: (Note: for this case, come to class with specific answers based on your analysis).
1. Read the case with special attention to the factors that influence the financial
performance of a store? Be sensitive to the possibility of orders lost due to
insufficient capacity during peak hours.
2. What financial factors are either benefits or drawbacks of the hub and spoke network
that Mast Kalandar uses, compared with the decentralized horizontal network? Look
at the posted Tradeoff Model spreadsheet, which considers three optional
structures for entering a new city; (a) one standalone kitchen supplying separate
outlets; (b) one outlet with a central kitchen that supplies all the other outlets, and (c)
standalone outlets with their own kitchens. Look at the right side of this spreadsheet

11

3.

4.
5.
6.

7.

page to see the results and graph. What is the optimal model for markets with
different numbers of outlets (1-10)? Do these findings make economic sense?
Think about how you would assess the feasibility and attractiveness of the other
growth areas (options different from expanding in existing and new markets) being
considered: institutional catering, expanding home delivery, merchandising their nonperishable condiments and other goods
Use the Store Economics without Delivery spreadsheet in the posted Store
Economics workbook to analyze the effects of different peak arrival percentages (40,
50, 60, 70, 80%) on store profits assuming current store size.
For this same range of peak loads determine the optimal store size, in terms of
seating square footage. Look at data showing profit for various square footage stores
on right side of spreadsheet.
What is the impact on profits of reducing the amount of time customers spend in
the store (from 35minutes down to 30 and then to 25)? Determine these results for
70% traffic during peak. Also for 80% traffic during peak. What is your conclusion
about this?
ALL STUDENTS DO ITEMS 1, 2, and 3 above. Each student does only one of
the other items as follows: Last name begins with A- D then you do #4, from EM then you do #5, from N-Z then you do #6.

Class 23 November 28
Objective: Managing the Investment Planning Process
Read: Operations, Strategy and Technology (OST) Chapter 9
1. What are some typical strategies and operational reasons for engaging in new investment
projects?
2. Provide examples of such situations with specific cases studied in OM440.
3. Prepare a written project flow chart of tasks to be accomplished when planning and
executing new operational investments.
4. How should risk get reflected in assessments of proposed investments? Same question,
but with respect to expected payoff?
5. What steps need to be taken to ensure that potential investment proposals are evaluated
from a strategic point of view?
Class 24 November 30
Objective: Project Portfolio Management
Case: Le Petit Chef
1. What factors explain Le Petit Chefs poor performance? What actions would you
recommend to remedy the situation?
2. What should Gagne do? Specifically, which projects should she recommend funding and
why? (You need to apply the concept of capacity management to the existing and
proposed projects. This requires calculations using relevant case exhibits.)
3. How should Gagne handle the executive meeting?

12

Class 25- December 5

All Project Executive Summaries Due in Hard Copy on December 5
Objective: Framework for driving operational improvement
Read: Operations, Strategy and Technology (OST) Chapter 10
Prepare:
1. What are learning/experience curves? What is there relationship to driving organizational
improvement?
2. What is the difference between learning by doing and learning before doing and what
are the associated improvement activities for each of these situations?
3. What is business process reengineering (BPR)?
4. How does it differ in objective and approach from Total Quality Management (TQM)?
5. What risks are associated with these two operational improvement approaches?
Class 26 and 27 December 7 and 12
Team Project Presentations (schedule to be announced) and Course Wrap-up
Post your team Executive Summary on SMGTools Forum (add topic)
Presentation slides should be posted on SMGTools Forum by 10pm on night before
scheduled presentation, with hard copy in Notes format (3 slides per page) due in class
on your presentation day.

13