IE285. Integrative Project in Modern Production Methods INTRODUCTION

1. IE285. Integrative Project in Modern Production MethodsINTRODUCTION Lecture #1 29 August, 2005 Monday

2. IE285 Course web page: http://www.aua.am/aua/masters/ce/courses/ie/ie285page

3. About IE285 • This course is integrative in the sense that it will be based on all the subjects taught in the program, and all faculty members present throughout the project duration may be approached for help, insight, advice, and supervision. • Specifically, although this is an IESM course, CIS faculty may also participate.

4. Goals and Learning Outcomes of IE285 • overcome the fear of dealing with a real company; • develop data collection skills; • be able to develop criteria for assessment and critical analysis of an operation; • understand the role of infrastructure in general and the role of companies in terms of industrial capacity (infrastructure) added to the country’s economy;

5. Goals and Learning Outcomes of IE285 • understand the relationship between value created or added and technologies implemented; • develop skills needed for finding bottlenecks of an operation, as well as problem solving and decision making skills; • develop skills for implementation of the obtained theoretical knowledge;

6. Goals and Learning Outcomes of IE285 • develop skills of communication and synergetic behavior in an Armenian enterprise. • develop skills for written description of a complex operation and for problem formulation. • develop skills for oral presentation using audiovisual aids.

7. In the company Where exactly one should modify the operation?

8. bottleneck BOTTLENECKS • It is required that you find “leverage areas” or “bottlenecks” of the operation where little effort leads to major benefits.

9. CAPACITY

10. IE285 • The technical approach to be used in the leverage areas may involve one or more of the types of problems or areas for research, the solution of which would be one of the main goals of the project:

11. IE285 • Operations Research (e.g. linear/nonlinear, integer, heuristic, etc. programming) • Statistical Analysis of the operation: Quality Assurance or Reliability of production • Decision Making • Control problem • Design • Organization of Layout • Simulation problem • CAD-CAM problem

12. IE285 • Students will work in groups of 3 members per project. For special cases, and at the relevant student requests, groups of 4 or 2, or individual projects may be considered.

13. IE285 Stages • STAGE 1August - October:a) Lectures/class discussion b) Visits to various operations of interest at least once a weekc) Homework: brief reports on the visits; a small project (due October 3, 2005, 11:30AM).

14. Lectures involve: • An overview of Armenian Industry and Economy, World Industrial development trends. The role of the infrastructure. • How Armenia could benefit from contemporary trends: the rapid development of high tech in the world; need for outsourcing of mature technologies from the developed countries; etc.

15. Lectures involve: • Product life cycle, the startup logic. • Setting up a production, the link between technologies and division of expenses through fixed and variable costs.

16. Lectures involve: • Focusing on leverage points - bottlenecks. • Focusing on leverage points -combating waste of time, materials and energy. • Focusing on leverage points - quality issues.

17. Lectures involve: • The concept of robust design (tentative). • Introduction to Business: Commercialization of Science and Technology (tentative). • Improvements that are expected to be useful in Armenian Companies

18. Visits to Companies • IMAX • AAFPC • Movsisyan • Arax Gold • Arega • Caritas • Mshak • Eurostan • Akcern • YJP • Solaren/H2ECOnomy • …

19. A field trip report should include: • The scope of the company, type of production and/or services. • A brief historical overview, when is created, the development history - milestones. • The product mix, volumes of production, in $$$ or units or both.

20. Markets: volumes for each market for each group of production and/or service. • Resources used: raw materials, power, etc.; providers: where from the resources used are bought? • Production flow functional description, a production process flowchart is useful. Which are the main technologies (briefly)?technology 1 …technology 2 … What kind of value is created or added in the company?

21. Company organization structure (brief). Which are the main departments? How are these departments tied to the technologies? Which are the functions of the departments? • Efficiencies of the processes used, waste generated. Waste management related issues. • Quality observations, including:- cleanliness, - environmental issues, - noise, • Compliance to standards, ISO 9000 and 14000 standardization.

22. Economic data: - # of workers, engineers (indirect labor), and other workers (direct labor); - how much investment was made in company when starting, and reorganization/reconstruction milestones;- what are the total sales volumes, what are the market pricing approaches? What are the expansion plans? • Overall initial impression of the current condition. • Marketing department, how many people work there, how much money is spent for marketing?

23. Which are the major problems observed (e.g. actual capacity vs. unused capacity)? • The report should also contain your initial individual views on strategy and approaches for:a) further investigation and cooperative work with the operation’s management – what would you like to investigate further?b) further development of the operation: which strategy and approaches would you suggest? • Operation’s (or company’s) role for Armenia in your opinion. In which way this company adds to Armenian industrial infrastructure?

24. Reports are due: 8 PM NEXT DAY AFTER THE TRIP In both hard and soft copies. Soft copies please send to: ArtHambR@aua.am. Please put in the subject line: “<Company name> REPORT”, e.g: Caritas REPORT Do not copy and paste from the company web site!

25. IE285 Stages • STAGE 2October - December:a) Group projects b) Weekly (at least) discussions with group members IS REQUIREDc) Preparation of the reports.d) PowerPoint Presentation - with all students present (due December 21, 2005).

26. OFFICE HOURS • First Stage:Thursdays, 2 - 4 PM. • Second Stage:Every workday, 1 - 3 PM. • I will inform you if any change will take place.

27. Grading: • Class participation, field trip participation and field trip reports40% • Project, Final Report and Presentation 60%

28. Infrastructure Services and facilities that support day to day economic activity. Infrastructure includes roads, electricity, telephone service, and public transportation. Infrastructure has traditionally been provided and maintained by the government. However, some nations are currently experimenting with privatization of some elements of the infrastructure as governments seek to cut their expenditures.

29. What is included in infrastructure State: • A system of Standards and standardization agencies • Police • Roads • Utilities: water (also sewage system, irrigation), power generation-distribution, communication, transportation, etc. • Mass Media

30. What is included in infrastructure Private: • All aforementioned utilities • Indirectly also Services, such as: • Merchandizing power - supplies • Transportation • Consulting • Engineering - civil, construction, design, etc. • Manufacturing services - a multitude of operations.

31. Infrastructure and Industrial Environment in certain areas, examples • Electronics • Mechanical Engineering • Civil Engineering • Chemical Industry

32. Starting a business in an a specific area, an investor’s perspective. • A critical mass is needed - a positive track of experiential record in the country • existence of standards • Educational and scientific background • Infrastructure needed for particular industry