VC_Chapter 10 Hard Rock's Human Resource Strategy Video Case mw Everyone—managers and hourly employees alike—who goes to work for Hard Rock Cafe takes Rock 101, an initial 2-day train- ing class. The Hard Rock value system is to bring a fun, healthy. nurturing environment into the Hard Rock Cafe culture. This initial course and many other courses help employees develop both personally and professionally. The human resource depart- ment plays a critical roke in any service organization, but at Hard Rock, with its “experience strategy,” the human resource depart- ‘ment takes on added importance. Long before Jim Knight, manager of corporate training, begins the class, the human resource strategy of Hard Rock has hhad an impact, Hard Rock’s strategic plan includes building a culture that allows for aeceptance of substantial diversity and individuality. From a human resource perspective, this has the benefit of enlarging the pool of applicants as well as contributing to the Hard Rock culture, (Creating a work environment above and beyond a paycheck is a unique challenge. Outstanding pay and benefits are a start, but the key is to provide an environment that works for the employees. “This includes benefits that start for part-timers who work at least 19 hours per week (while others in the industry start at 35 hours ‘per week): a unique respect for individuality; continuing training: and a high level of internal promotions—some 60% of the man- agers are promoted from hourly employee ranks. The company's training is very specific, with job-oriented interactive DVDs cover~ ing kitchen, retail, and front-of-the-house service. Outside volun- ‘eer work is especially encouraged to foster a bond between the ‘workers, their community, and issucs of importance to them. Applicants also are screened on their interest in music and their ability to tella story. Hard Rock builds on a hiring criterion of bright, positive-atttude, self-motivated individuals with an employce bill Of rights und substantial employee empowerment. The result is 2 unique culture and work environment, which no doubt contributes tothe low tumover of hourly people—one-half the industry average, ‘The layout, memorabilia, music, and videos are important ele- ments in the Hard Rock “experience,” but it falls on the w cers and waitresses 1o make the experience come alive. They are particularly focused on providing an authentic and pee dining experience, Like Alaska Airlines, Hard Rock is loo ‘he propk wil ova onic Wha Ri eas ty wei with its human resource strategy, Hard Rock obtains a competi- tive advantage. Discussion Questions* 1. What has Hard Rock done to lower employee turnover to half the industry average? 2. How does Hard Rock's human resource department support the company’s overall strategy’ 3. How would Hard Rock's value system work for automo- bile assembly line workers? (Hint: Consider Hackman and ‘Oldham’s core job charaeteristics ) 4. How might you adjust a traditional assembly line to address more “core job characteristics"? “Hefore answering these questions, you may Wish to view the video that accompanies this ease.VC_Chapter 11 Darden’s Global Supply Chains Darden Restaurants (subject of the Global Company Profile at the beginning of this chaptcr), owner of popular brands such as Olive Garden and LongHom Steakhouse, requires unique supply chains to serve more than 300 million meals annually. Darden’s strategy is operations excellence, and Senior VP Jim Lawrence's task is to ensure competitive advantage via Darden’s supply chains. For a firm with purchases exceeding $1.8 billion, manag ing the supply chains is a complex and challenging task. Darden, like other casual dining restaurants, has unique sup- ply chains that reflect its menu options. Darden’s supply chains are rather shallow, often having just one tier of suppliers. But it has four distinct supply chains. First, “smallware” isa restaurant industry term for items such as linens, dishes, tableware and kitchenware, and silverware. ‘These are purchased, with Darden taking title as they are received at the Darden Direct Distribution (DDD) warehouse in Orlando, Florida. From this single warchouse, smallware items are shipped via common carrier (trucking companies) to Olive Garden, Bahama Brecze, and Seasons 52 restaurants Second. frozen, dry.and canned food products are handled eco- nomically by Dardcn’s 11 distribution centers in North America, which are managed by major U.S. food distributors, such as MBM, Maines, and Sygma, Thisis Darden’s second supply lin. Third, the fresh food supply chain (not frozen and not canned). where product life is measured in days, includes dairy products, produce, and meat. This supply chain is B2B, where restaurant ‘managers directly place orders with a preselected group of inde- pendent supplicrs Video Case fom Fourth, Darden’s worldwide seafood supply chain is the final link. Here Darden has developed independent supplicrs of salmon, shrimp. tilapia, scallops. and other fresh fish that are source inspected by Darden's overscas representatives to ensure quality ‘These fresh products are flown to the U.S. and shipped! to 16 dis- tributors, with 22 locations, for quick delivery to the restaurants. With suppliers in 35 countries, Darden must be on the cutting ‘edge when it comes to collaboration, partnering, communication, and food safety. Itdoes this with heavy travel schedules for purchas- ing and quality control personnel, native-speaking employees onsite, ‘and aggressive communication. Communication is a critical cle- ment; Darden trics to develop as much forecasting transparency as possible. “Point of sale (POS) terminals,” says Lawrence, “feed actual sales every night to supplicrs.” Discussion Questions* 1, What are the advantages of cach of Darden’s four supply chains? 2, What are the complications of having four supply chains? 3. Where would you expect ownershipltitle to change in cach of Darden's four supply chains? 4. How do Darden’s four supply chains compare with those of other firms, such as Dell or an. automobile manufacturer? Why do the differences exist, and how are they addressed? * You may wish to view the video that accompanies this case before answering the questions.VC_Chapter 12 Zhou Bicycle Company Zhou Bicycle Company (ZBC), located in Seattle, is a whole- Sale distributor of bieyeles and bicyele paris. Formed in 1981 by University of Washington Professor Yong-Pin Zhou, the firm's primary retail outlets are located within a 400-mile radius of the distribution center. These retail outlats receive the order From ZBC within 2 days after notifying the distribution center, provided that the stock is available. However, if an order is not fulfilled by the company, no backorder is placed; the retailers arrange to get their shipment from other distributors, and ZBC loses that amount of business.The company distributes a wide variety of bicycles. The most popular model, and the major source of revenue to the company. is the AirWing. ZBC receives all the models from a single manufacturer in China, and shipment takes as long as 4 weeks from the time an order is placed. With the cost of com- munication, paperwork, and customs clearance included, ZBC estimates that each time an order is placed, it incurs a cost of $68. The purchase price paid by ZBC, per bicycle. is roughly (60% of the suggested retail price for all the styles available, and the inventory carrying cost is 1% per month (12% per year) of, the purchase price paid by ZBC. The retail price (paid by the customers) for the AirWing is S170 per bicycle. ZBC is interested in making an inventory plan for 2016. The firm wants to maintain a 95% service level with its customers to minimize the losses on the lost orders. The data collected for the ppast 2 years are summarized in the following table, A forecast for AirWing model sales in 2016 has been developed and will be used to make an inventory plan for ZBC. Demands For Airwing Model January 6 7 a February 2 14 15 July 30 34 39 August 18 2 24 September 13, 15 16 October 2 3 is November 22 2s 28 December 38 42 27 Total 343 391 439 Discussion Questions 1. Develop an inventory plan to help ZBC. 2. Discass ROPs and total costs 3. How can you address demand that is not at the level of the planning horizon? Source: Professor Kala Chand Seal, Loyola Marymount University,VC_Chapter 14 When 18,500 Orando Magic Fans Come to Dinner Video Case Come ‘With vast experience at venuessuch as the American Airlines Arena (in Miami), the Kentucky Derby, and Super Bowis, Chef John Nicely now alo plans huge culinary events at Orlando's Amway Center, home of the Orlando Magic basketball team. With his unique talent and exccp- tional operations skills, Nicely serves tens of thousands of cheering fans at some of the work!’ largest events. And wen more thar 18.500 basketball fans show up for a game, expecting great food and great basketball, he pus his ercative as well as operations talent to work. Chef John must be prepared. This means determining not only a total demand for all 18,500 fans, but also translating that demand into specific menu items and beverages. He prepares 4 forecast from current ticket sales, history of similar events at ‘other venues, and his own records, which reflect the demand with this particular opponent, night of week, time of year, and even time of day. He then breaks the demand for specific menu items ‘and quantitics into items to be available at each of the 22 conces- sion stands, 7 restaurants, and 68 suites. He must also be prepared to accommodate individual requests from players on both teams. Production Specifications Elbow macaroni (large, uncooked) Cheese—cheddar shredded 10.00 ‘Mac and cheese base (se recipe) 44.00 Milk 4.00 Cheetos, crushed 6.00 Sliced green onion—garnish 050 Whole Cheetos—garnish 2.00 Total labor hours, Chef John frequently changes the menu to keep it interesting forthe fans who attend many of the 41 regular season home games cach season. Even the culinary preference of the opponent's fans ‘who may be attending influences the menu. Additionally, when entertainment other than the Magic is using the Amway Center, the demographic mix i likely to be different, requiring additional tweaking of the menu. The sizeof the wait staf and the kitchen staff change to reflect the size of the crowd: Chef John may be super- vising as many as 90 people working inthe kitchen. Similarly, the concessions stands, 40% of which have their own grills and fryers, present another challenge, as they are managed by volunteers from nonprofit organizations. The use of these volunteers adds the need forspecial training and extra enforcement of strict quality standards. ‘Once deciding on the overall demand and the menu, Chef John must prepare the production specifications (a bill of material) for cach item. For the evening game with the Celtics, Chef John is pre- paring his unique Cheeto Crusted Mac & Cheese dish. The ingre- dients, quantity, costs, and labor requirements are shown below: 02 hours‘The yield on this dish is 6 portions, and labor cost is $15 per hour, with fringes. The entire quantity required for the evening is prepared prior to the game and kept in warming ovens until riceded, Demand for each basketball game is divided into 5 periods: rior to the game, first quarter, second quarter, half-time, and second half. At the Magic vs. Celtics game next week, the demand (number of portions) in each period is 60, 36, 48, 60, and 12 for the Checto Crusted Mac & Cheese dish, respectively. Discussion Questions* 1. Prepare a bill of matcrial explosion and total cost for the 216 portions of Checto Crusted Mac & Cheese 2. What is the cost per portion? How much less expensive is the Cheeto Crusted Mac & Cheese than Chef John’s alternative creation, the Buffalo Chicken Mac & Cheese, shown in Figure 149 of this chapter? 3. Assuming that there is no beginning inventory of the Checto Crusted Mac & Cheese and cooking time for the entire 216 portions is 0.6 hours, when must preparation begin? * You may wish to view the video that accompanies this case before answering the questionsVC_Chapter 15 Old Oregon Wood Store In 2015, George Wright started the Old Oregon Wood Store to manufacture Old Oregon tables. Each table is carefully constructed by hand using the highest-quality oak. Old Oregon tables can sup- port more than 500 pounds, and since the start of the Oki Oregon ‘Wood Store, not one table has been returned because of faulty work- manship or structural problems. In addition to being rugged, each table is beautifully finished using a urethane varnish that George developed over 20 years of working with wood-finishing materials. ‘The manufacturing process consists of four steps: preparation, assembly. finishing, and packaging. Each step is performed by one person. Inaddition to overseeing the entire operation, George does all of the finishing. Tom Surowski performs the preparation step, which involves cutting and forming the basic components of the tables. Leon Davis is in charge of the assembly, and Cathy Stark performs the packaging. Although each person is responsible for only one step in the manufacturing process, everyone can perform any one of the steps. tis George’s policy that occasionally everyone should complete several tables on his or her own without any help or assistance. A small competition is used to see who can complete an entire table in the least amount of time. George maintains average total and intermediate completion times. The data are shown in Figure 15.7. It takes Cathy longer than the other employees to construct an Old Oregon table. In addition to being slower than the other ‘employees, Cathy is also unhappy about her current responsi ity of packaging, which leaves her idle most of the day, Her first preference is finishing, and her second preference is preparation, In addition to quality, George is concerned with costs and efficiency. When one of the employees misses a day, it causes major scheduling problems. In some cases, George assigns another employee overtime to complete the necessary work. At other times, George simply waits until the employee returns to ‘work to complete his or her step in the manufacturing process. Both solutions cause problems. Overtime is expensive, and wait ing causes delays and sometimes stops the entire manufacturing, process, ‘To overcome some of these problems, Randy Lane was hired, Randy's major duties are to perform miscellaneous jobs and to help out if one of the employees is absent. George has given Randy training in all phases of the manufacturing process, and he is pleased with the speed at which Randy has been able to Jearn how to completely assemble Old Oregon tables. Randy's average total and intermediate completion times are given in Figure 15.8.gure 18.7 ‘Nanufacturing Time in Minutes Discussion Questions 1 Whatis the fastest way to manufacture Old Oregon tables using the original crew? How many could be made per day? 2 Would production rates and quantities change signifi- cantly if George would allow Randy to perform one of the four functions and make one of the original crew the backup. person? 3. 4 ‘What is the fastest time to manufacture a table with the original crew if Cathy is moved to cither preparatioa or finishing? Whoever perfarms the packaging function is severely under utilized. Can you find a better way of utilizing the four- or five person crew than cithcr giving each a single job oF allowing cach to manufacture an entire table? How many tables could be ‘manufactured per day with this scheme?VC_Chapter 16 ‘Lean Operations at Alaska Airlines Alaska Airlines operates in a land of rugged heauty, crystal clear lakes, spectacular glaciers, majestic mountains, and bright bluc skies. But equally awesome is its operating performance. Alaska Airlines consistently provides the industey’s number one overall ranking and best on-time performance, A key ingredient of this ‘excellent performance is Alaska Airlines’ Lean initiative. ‘With an agzressive implementation of Lean, Ben Minicucc, Exccutive VP for Operations, is finding ever-increasing levels of performance. He pushes this initiative throughout the company ‘with: (I) a focus on continuous improvement, (2} metncs that masure performanee against targets, and (3) making perfor- ‘mance relevant to Aliska Airlines’ empowered employees. ‘With leadership training that includes a strong focus oa participative management, Minicucei has created a seven-person Lean Department. The department provides extensive train ing in Lean via one-week courses, participative workshops, and two-week clastes that train employees ta become a Six Sigma Green Belt. Somecmployees even pursue the nex! step, Black Belt certification, ‘A huge part of any airline's operations s fuel cost, but capital utilization and much of the remaining cast is dependent upon ‘ground equipment and crews that handle aircraft turnaround and ‘maintenance, in-ight services, and customer service ‘As John Ladner, Director of Seattle Airport Operations, has observed, “Lean climinates waste, exposes ron-standard work, ‘and is forcing a focus on variations in documented best practices ‘and work time: Lean is now part of the Alaska Airlines corporate culture, with some 60 ongoing projects, Kaizen events (called “Accclerated Improvement Workshops” at Alaska Airlins), Gemba Walks called “waste walks” by Alaska Airlincs) and SS are now a part of every- day conversation at Alaska Airlines. Lean projsts have included Video Case fmm Applying 58 to identify aircraft ground equipment and its location on the tarmac. Improving preparation for and synchronization ofthe arrival and departure sequences; time to open the Iront door after arrival bas been reduced from/4.5 to I mun, Redefining the disconnect procedure for tow bars uscd to “push back” aircraft at departure time; planes now depart 23 minutes faster Revising the deicing process, meaning less time for the plane tobeon the tarmac. Improving pilot staffing, making Alaska’s pilot productivity the highest in the industry. Every 1% improvemeat in pro- ductivity kads to a 35 million savings ou a recurting basis, ‘Alaska Airines has achieved a 7% productivity improvement ‘over the last five years.Another current Lean project is passenger unloading and loading. Lean instructor Allison Fletcher calls this “the most ‘unique project I have worked on.” One exciting aspect of deplan- ing is Alaska’s solar-powered “switchback” staircase for unload- ing passengers through the rear door (sce photo). Alaska is saving ‘two minutes, or nearly 17%, off previous unloading time with this, ‘new process. Alaska Airlines’ Lean culture has made it a leader in the industry. Discussion Questions* 1, What are the key ingredients of Lean, as identified at Alaska Airlines? 2. As an intial phase of a kaizen event, discuss the many ways passengers can be loaded and unloaded from airplanes. 3. Document the research that is being done on the aircraft passenger-loading problem. * You may wish to view the video that accompanies this case before addressing these questions