Refer: Chapter 14 “Just in Time and Lean Operations” of Operations Management 11e by Stevenson
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Assignment 7.docx
ASSIGNMENT 7 – PART 1
Byco opened its first retail store in Denmark in 1938. 75 years later, the company is a reputable retailer with
more than 8,000 stores in Europe, Scandinavia and the U.S. During the past 20 years, Byco’s strategy has
been to provide products that are anywhere from 10% to 25% cheaper than its competitors with no
compromise in quality.
Employees at Byco undergo extensive employee training on a continuing basis which enables most employees
to be very knowledgeable about all departments and all aspects of store operations. Wages are significantly
higher and turnover is significantly less than the industry standard.
Byco has established win-win relationships with its suppliers. The company continuously improves its product
offering by hiring highly paid and experienced buyers. Byco carries a limited number of varieties of its
products, relative to its competitors; however, their products are high quality and exceed standards set by
consumer legislation. Byco’s suppliers deliver products in display-ready packages. Each store has a large
loading platform where forklifts transport incoming products directly to the sales floor.
All stores are open from 9am to 7pm, Monday – Saturday and 11am to 5pm on Sunday. Grocery carts are
located at the entrance to the store. Customers pay a deposit for use of a cart by dropping 50¢ into an
automated till. The 50¢ is returned to the customer when the customer returns the cart to a locked position in
the queue of grocery carts. At any point in time, a store manager can determine the approximate number of
shoppers in the store by getting a read-out of the number of in-use carts.
Customers queue up in a single line to be checked out by the next available cashier. Products display multiple
bar codes. After all items are scanned, they are returned to the shopper’s cart. The shopper then proceeds
to a bagging station where the shopper bags his/her products. The shopper can either provide his/her own
bags or purchase large recyclable bags at the bagging station for $1 each.
Byco’s major competitors have profit margins of about 1.7%. Byco has managed to achieve about a 2% profit
margin while passing on a 10% – 25% cost savings to its customers.
———————————————————————————————————————————————————- Common goals, among others, of lean operations are
1. Flexibility
2. Less Floor Space
3. Waste Reduction (raw materials, labor and/or time)
4. Continuous Improvement towards High Quality
Describe how Byco SPECIFICALLY achieves each of the above four goals. A very brief paragraph for each
goal will suffice. Be specific – don’t generalize. 40 pts
ASSIGNMENT 7 – PART 2
We’ve all been in a situation where we’ve had to deal with inefficiency or waste that is costly, maddening or
both. It may have been at work or dealing with a company as a customer. Describe the situation, point out
how it fails at least one ‘lean operations’ characteristic and what you’d do to remedy the situation. No more
than ½ page please. 10 pts
P.S. – Some of you may be thinking of a situation/incident and think ‘She’s not going to believe that’. At my
age, nothing amazes me – especially given I’ve recently had a lot of interaction with the federal government.