For Immediate Release
Contact: Barbara Buell [email protected] or 650-723-3157
STANFORD GRADUATE SCHOOL OF BUSINESS. -- All graduate students massage data on a laptop these days, but Stanford Business School faculty members Sam Wood and Sunil Kumar have taken technology as a teaching aid to a new level. They have developed a "virtual factory," which students must manage 24 hours a day by computer. Unlike other courseware on disks that must be updated periodically by a professor, this factory is programmed to run continuously on the Internet. "It gives a realism that you can't get by giving this out on floppies," says Kumar.
Like a real factory, this one can experience unexpectedly long manufacturing times, get a burst of orders from Asia at 4 a.m., or suddenly run out of parts if students haven't lined up sufficient inventory to meet demand. Introduced as part of the required operations management course for MBAs, "the factory performs as a function of the choices students have made and the uncertainty in the environment," says Wood, who is assistant professor of manufacturing and technology. It is designed to teach several fundamental operations concepts, including capacity planning, scheduling and inventory management.
Called Littlefield Technologies, the factory is set up as a job shop which assembles digital satellite system receivers. They are assembled from kits of electronic components procured from a single supplier. Students must manage the factory through four key steps carried out at three stations for board stuffing, testing and tuning. Students may purchase additional machines to perform these tasks. They can also sell machines at a relatively small retirement price. As the orders flow in, students must be sure they have enough assembly kits, which cost $900 each. There are important rules to remember, such as the fact that orders cannot be accepted if more than 100 orders are awaiting assembly in the system.
Students must also quote lead times to customers. Student teams that quote shorter lead times make more money if they can meet those quotes, but pay stiffer penalties if they fail. In one assignment, students started without any cash and bootstrapped operations, using revenues to buy additional capacity and inventory. The winning student team is the one with the most cash at the end of the "game."
Typically, students divide into teams of four persons each. In one quarter-long, operations course, the factory game was played once for 10 days and again for 14 days, with some added features to manage. Students seem to relish the game and especially enjoy checking to see how they are stacking up against competing teams. The program constantly ranks the teams as the game progresses. "It was clearly addicting," says Kumar, who is assistant professor of operations, information and technology. "The amount of time they put into it was disproportionate to the weight of the grade they were given."
Interestingly, says Wood, the winners are not usually the teams who tap into the game most frequently and stay up all night checking for orders. The best scorers are usually the best planners -- students who have carefully completed the strategically designed class assignments that go along with the factory game.
The Internet-based program, Littlefield Technologies, is available for use by other universities through Responsive Learning Technologies in Berkeley, CA (EMAIL: [email protected] or TEL: 510 558-0909)
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