annual reportL I N K I N G M A N U F A C T U R I N G , T E C H N O L O G Y, P U B L I C S E C T O R P O L I C Y, A N D E D U C A T I O N

I N T H E N E W E N V I R O N M E N T

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T H E D A U C H C E N T E R F O R T H E M A N A G E M E N T O F M A N U F A C T U R I N G E N T E R P R I S E S

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Director’s Message

Competing in the new enviroment

We live in a rapidly changing world. Global competition is changing the way organizations thinkand act. Manufacturing competitiveness in the U.S. will depend on at least the following threefactors: 1) innovation and entrepreneurship, 2) public sector policy, and 3) views on the conceptand theory of the enterprise. Taking each perspective in turn.

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INNOVATION AND ENTREPRENEURSHIP

The need to innovate…to create and protect intellectual property…is crucialto continued and future economic success. Enterprises must adapt andembrace the “think vs. sweat” model; namely make things with more brainthan brawn in order to effectively compete.

PUBLIC SECTOR POLICY

Decisions made regarding societal issues, such as healthcare, pension fund-ing, tort reform, and tax policy will increasingly have a profound impact onthe manufacturing community.

CONCEPT/THEORY OF THE ENTERPRISE

The classic concept of what constitutes a manufacturing enterprise may bepreventing us from understanding the nature of doing business today. Havewe all caught up to the fact that the world is a different place now? Before,enterprises controlled all aspects that it needed to produce products. Now,enterprises are part of a huge set of interlinked networks across the planet.This is a result of globalization and multi-party diffused ownership of thesenew value infrastructures.

Challenges

The above three perspectives pose the following challenges: 1) Innovation… firms mustbecome high margin intellectual enterprises; 2) Public Sector Policy… we must addresshealthcare, pension funding, and tort-related costs if manufacturing is to be competitive and slow the rate of outsourcing and off shoring of jobs; 3) Theory of the Enterprise… we need to rethink our concept of the firm and probably change/augment our work systemsand measurement processes.

For example, with respect to manufacturing outsourcing, enterprises must use contracting and strategic partnering (without giving up intellectual property) rather than direct ownershipto manage the value network. We also need to develop better ways to measure value usingleading indicators of economic value e.g., customer satisfaction, employee turnover) as wellas the more traditional lagging indicators, such as earnings and cash flow. Moreover, the definition and perception of what constitutes a manufacturing enterprise must be re-examined,as well as the classifications of those who work in or support the manufacturing sector.

DCMME’s mission is to identify, understand, and successfully address such challenges andturn these and other challenges into opportunities to assure our nation’s pre-eminence interms of manufacturing competitiveness. This has led DCMME, this past year, to develop the following new initiatives: 1) an advanced manufacturing option in the Krannert School’sExecutive Masters Program, incorporating contemporary and new innovations such as SixSigma and RFID technology, 2) work on several projects to improve quality and productivityin the healthcare industry, (thereby lowering manufacturing costs) using lean thinking and six sigma principles, 3) advantageously exploit data mining tools to improve and optimizedevelopment and manufacturing processes, and 4) become actively engaged with the various interdisciplinary research centers in Purdue University’s Discovery Park.

Opportunities

The real value of what we do and how well we do itundeniably comes from our faculty, students, and our

industrial partners whose collective wisdom, talent,and efforts help us to make a difference. We deeply

appreciate this and owe any success to all of you.

DCMME and PurdueTa k i n g I t To T h e N e x t L e v e l

Over the past eighteen years,DCMME has focused on educating tomorrow’s leadersthrough innovative educationalprograms which focus ondeveloping leaders who are flexible and adaptable in managing the change within organizations and in manufacturing.

In keeping with Purdue’s goals, DCMME and its corporate partners provide educational enrichment opportunities through programs and services whichfoster leadership and criticalthinking in manufacturing.

learning

DCMME is commited to its students and partners by focusing on successfulmanagement of manufactur-ing enterprises and the futuremanufacturing industry.

Purdue University andDCMME are committed to strengthening Indiana’seconomy and workforce and effective engagementthrough its partnerships.

discovery engagement

DCMME has purposed to provide solutions to manufacturing challenges facing its corporate partners.Research conducted byPurdue University faculty and staff serves as a source to assess and develop continuing process improve-ment in collaborations withour students and partners.

Purdue University’s goal is to provide superior graduateprograms and visionary initiatives. DCMME facilitatesits educational programs by providing academic environments where thesecharacteristics are fostered.

discoverydiscoveryE X P A N D I N G T H E R E A L M O F K N O W L E D G E

Introduction:

DCMME’s Lean Enterprise course provides an opportunity for graduate MBA students to immerse themselves in leanmanagement principles using a variety of academic texts and hands-on activities. The goal of the course is to providestudents with an awareness of lean “tools”, the importance of people in implementing lean principles in an organization, and the benefit to an enterprise’s bottom line and its employees and customers.

The Lean Enterprise course has three main components:

1) Learning – via texts such as Womack and Jones “Lean Thinking”, Rother and Shook’s “Learning to See”, and Taiichi Ohno’s “Toyota Production System”

2) Onsite Learning – via a trip to a Wabtec Corporation facility. Students participated in a week-long Kaizen event during their visit to Wabtec’s WallaceburgOntario foundry.

3) Integration Activity – via a pre-selected student project. This year’s project focused on applying lean principles to a healthcare clinic to improve the patient registration process.

Day 1: Introduction and Training• Students arrive at the site and

meet their team members and event leaders

• Participate in the local training event

• Tour the facility and their specific Kaizen area

• Plan for the week• Social Activity

Day 2: Document Current StateMetrics and DevelopImplementation Plan• Detailed review of area and

future state improvement goals• Collect all necessary data and

create required schematic drawings

• Create implementation plan and arrange trade support

Day 3: Implement Improvements• Execute improvement plan• Maintain safe working

environment

Day 4: Document Improvementsand Draft Final Report• Collect information to measure

change from original process• Capture all open action items

with owners and due dates• Develop final report for senior

management• Social Activity

Day 5: Final Report• Present report to senior

management and other participating teams

The cornerstone event for the course is the Wabtec Kaizenevent. This event provides a rich learning environment for thestudents, allowing them to learn how to successfully train localemployees, lead a Kaizen activity, as well as encounter – andsolve – unplanned issues and complications. This event alsoplays a key role due to its short time frame – students are ableto clearly see and measure the actual gains before they leavethe site, further reinforcing the benefits of implementing leanprinciples.

The final Lean Enterprise course project involved the studentstaking the knowledge gained from their readings and theKaizen event and applying the skills to an existing process.This year the students completed a value stream map for anIndiana healthcare clinic and recommended improvements tothe patient registration process. DCMME would like to thankeveryone at Wabtec Corporation for their support of thiscourse – their skill and passion for manufacturing helps to inspire our future manufacturing leaders.

Wabtec Corporation – Lean Enterprise Kaizen Event(MGMT 690Y)

learninglearningD I S S E M I N A T I N G A N D P R E S E N T I N G K N O W L E D G E

DCMME directs a manufacturing management (MM) minorwithin the 17th-ranked* Krannert School of Management’shighly regarded Bachelor of Science in Industrial Management(BSIM) program.

The goal of this minor is to develop students who have theability to excel in contemporary manufacturing environmentscharacterized by rapid change, advanced technology, product and process innovation, and short product life cycles.Graduates of this option generally assume entry-level leader-ship roles in production functions in manufacturing firms.

BSIM/MM graduates understand how the manufacturingprocess interacts and drives the organization’s other activities,and how it fuels the organizations strategic goals. BSIM/MMgraduates posses a broad base of knowledge from which todraw upon in making any decision, which includes humanresources considerations, financial implications, marketing and product placement and contemporary manufacturing techniques. This enterprise view also prepares BSIM/MM students to advance beyond entry level positions and takeleadership roles in organizations.

Coursework in the MM option builds upon the already strong analytical base of the BSIM program. Students takeinterdisciplinary courses in operations management, strategicmanagement, and organizational behavior/human resources.These core manufacturing management courses are supple-mented by electives in Krannert, the School of IndustrialEngineering, and the School or Technology. These coursesbroaden and complement the student’s knowledge beyondtheir extensive technical expertise and enable them to be critical thinkers.

* Ranking by U.S. News and World Report

Required Curriculum:• Advanced Manufacturing Planning

Control Systems • Manufacturing Strategy • Management of Manufacturing Organizations

Optional Curriculum (must complete two):• Introduction to Database Systems • Systems Analysis and Design • Computer-Integrated Manufacturing • Work Methods & Measurement • Total Quality Management • Quality Control • Function and Structure of Industry and

Distribution (Supply Chain Management) • Labor Relations

MM Statistics 2004Krannert Undergraduate Students 2577BSIM Program overall 295 (12%)Pre-IM 116 (40%)Upper-Level IM 179 (61%)Total BSIM/MM 66 (22%)

Undergraduate Program

Avery Dennison

Bank One Corporation

BKD

Cardinal Health

Caterpillar

Cintas

Consolidated Graphics

Crowe Chizek and Company LLC

Daimler-Chrysler Corporation

Eli Lilly

Ferguson Enterprises

Ford Motor Company

General Electric

General Motors

Guidant Corporation

Ingersoll-Rand

Kimberly Clark

Lutron Electronics

NVR/Ryan Homes

Philip Morris USA

Procter & Gamble

Rolls-Royce Corporation

Stryker Medical

Toyota Motor Manufacturing N/A

Weyerhauser Company

2004 Recruiting Companies

MBA School

WEST LAFAYETTE, Ind. – The Wall Street Journal named Purdue University’s Krannert School of Management a No. 1 MBA school in a special section published today (Wednesday, Sept. 22). The Journal’s survey of corporate recruiters concluded that the Krannert School is the No. 1 programin the nation that serves recruiters from a regional base. Based on its priority of serving recruiters from the American Midwest, Krannert was ranked No. 1.

Unlike other MBA rankings that use a variety of measures, the Journal uses only surveys and inter-views with corporate recruiters. The University of Michigan’s Ross School of Business ranked firstamong schools that focus on serving a national and multinational base of corporate recruiters, andSwitzerland’s International Institute for Management Development (IMD) ranked No. 1 internationally.

“The Wall Street Journal is the gold standard of business publications, so a No. 1 ranking not onlymeans we’re doing things right but also that people all over the country are going to take notice ofus,” said Richard A. Cosier, dean of the Krannert School. “At the Krannert School, we also are proudthat it is recruiters who rank us the best – for MBA students, that’s extremely important.”

Krannert ranked first among the 44 regional business schools. The school came in second in rankingsby industry recruiters in energy/utilities and eighth in consumer products.

Purdue’s Krannert School of Management ranked

by The WallStreet Journal

#1

In the Master’s of Business Administration program, Krannertstudents may specialize in option areas by selecting a specificgroup of electives. Manufacturing and Technology Management(MTM) is an option which was developed and is directed byDCMME. This program is designed to provide a strategic, multidisciplinary view of manufacturing enterprises.

Master’s Program

PART I (must take one course in five sections)

SECTION 1:Human Resources in Manufacturing(must choose one or skip section)

• HR for Manufacturing Enterprises

• Industrial Relations I• Industrial Relations II• Negotiations• Organizational Change• Training in Organizations• Human Factors in Engineering• Technology & Conflict

Management

SECTION 2:Product Design & Development(must choose one or skip section)

• New Product Laboratory I• Product Management• Project Management• Marketing Analysis and

Planning• Design for Manufacturing

& Assembly• Product and Process Design

SECTION 3: Production Planning & Control(must choose one or skip section)

• Manufacturing Planning and Control

• Manufacturing Practice and Models

• Advanced Manufacturing Technology

• Production Management Control

• Lean Manufacturing/Kaizen• E-Commerce & Supply Chain

Management• Logistics

SECTION 4: Systems Integration & InformationManagement (must choose one orskip section)

• Decision Support and Expert Systems

• Enterprise Integration• Systems Simulation• Data Mining

SECTION 5:Total Quality Management (must choose one or skip section)

• Tools for TQM• Quality Control

Section 6: Manufacturing Strategy(must choose one or skip section)• Manufacturing Strategy• Competitive Analysis in

Strategic Management• Engineering Economic Analysis

Section 7: Finance for Manufacturing(must choose one or skip section)• Financial Management III

PART II(must take four courses)• Any Part I course in excess

of requirement

Finance/Accounting• Advanced Management

Accounting• Strategic Cost Management• Financial Risk Management• Managing Corporate Capital

Structure• Mergers, Acquisitions

& Corporate Control

Business Law• Labor Law• International Business Law

Economics• Advanced Labor Economics• International Marketplace:

Efficiency & Ethics I

Manufacturing• Projects in Manufacturing• International Multidisciplinary

Management Project

Marketing• New Product Marketing II• Research Methods in

Marketing Management• Marketing in a Global

Economy• Marketing of Industrial

and technological Products

Management Information Systems• IT for E-Commerce

Organizational Behavior• Leadership• International Human

Resource Management• Teamwork• Project Teams• Training in Organizations• e-People• Mentoring and Socialization

Operations Management• International Operations

Management• Management of Service

Operations• Management Operating

Systems

Quantitative Methods• Spreadsheet Modeling• Management Science III

Strategy• Corporate Strategy Concepts

and Models• International Strategy• Strategy Implementation in

Multinational Corporations• Management of New and

Small Firms• Competition in E-Commerce

Industrial Design• Computer Aided Manufacturing• Design and Evaluation of

Material Handling Systems• Scheduling Models• Economic Decisions

in Engineering• Advanced Production Control• Knowledge-Based Systems

The MTM option requires students to take courses in a broadrange of disciplines, as well as additional electives to achievedepth with an area. The coursework required by the programis as follows:

7% U.S. Territories/Other

ABG, Inc.

Air Products & Chemicals, Inc.

American Axle & Manufacturing

Delphi Corporation

DPSI

Eaton Corporation

Ford Motor Company

Guidant Corporation

Indiana Venture Center, Inc.

Irwin Financial Corporation

Kimberly-Clark Corporation

Krannert Ph.D.

NCR Corporation

Philip Morris USA

Proctor & Gamble Company

Rolls-Royce Corporation

Saint-Gobain Containers

SBC Communications

State Farm Insurance

Stryker Medical

Synthes USA

United Technologies

MTM Statistics 2003-20042004 Recruiting Companies

Admissions SummaryApplications . . . . . . . . . . . . . . . . . . . . . . . . . 1,011Admitted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 496Enrolled . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 180

Business Administration (MBA) . . . . . . . . . . . . 122Business Administration (MSIA) . . . . . . . . . . . . . 33Human Resources Management (MSHRM) . . . . . 25

Statistics (MBA)Mean Undergraduate GPA . . . . . . . . . . . . . 3.30/4.0Middle 50% GPS Range . . . . . . . . . . . . . . . . 3.0-3.6Mean GMAT Score . . . . . . . . . . . . . . . . . . . . . . 667Middle 50% GMAT Range . . . . . . . . . . . . 640-710Mean Post-baccalaureate Work . . . . . . . . . 4.6 yearsMiddle 50% Post-bac Work Experience 2.0-6.0 yearsPost-bac Work Experience . . . . . . . . . . . . . . . . 86%Mean Pre-bac Work Experience* . . . . . . . . 3.1 years

* Prebaccalaurate experience is calculated only for students who graduated in 2004 and includes military, full-time, and significant internship/co-op experiences.

Demographics (All Programs)Women . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22%Minorities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21%Underrepresented Minorities . . . . . . . . . . . . . . . 8%International MBA Students . . . . . . . . . . . . . . . 38%Average Age . . . . . . . . . . . . . . . . . . . . . . . 28 yearsCountries Represented . . . . . . . . . . . . . . . . . . . . 19Undergraduate Schools Represented . . . . . . . . . 119Purdue Baccalaureate Degrees . . . . . . . . . . . . . 13%Previous Advanced Degrees . . . . . . . . . . . . . . . 17%

Undergraduate Majors (MBA/MSIA)

34% - Engineering

19% - Science/Technology

30% - Business

17% - Liberal Arts/Other

Undergraduate Majors (MSHRM)

16% - Business72% - Liberal Arts/Other

12% - Engineering/ Science/Technology

U.S. Geographic Distribution

31% West

13% South/Southwest35% Midwest

14% East

DCMME’s continuing efforts of funding an aggressive scholarship

program, with the goal of attracting top-caliber students into careers

as manufacturing leaders, took another step forward this year thanks

to the generosity and vision of our corporate partners. Recognizing

that DCMME could take the next step by working with Krannert’s

Admissions Office to recruit top students to attend Krannert who may

otherwise consider business schools based on financial reasons,

Rolls-Royce Corporation, Saint-Gobain Containers, and Wabtec

Corporation graciously provided funding to create a Manufacturing

Management Scholars program. These scholarships are designed to

reward high-potential students for their past accomplishments and to

provide increased academic and corporate involvement for them

from their initial contact with Krannert through their final job search.

Scholarship recipients are introduced to their DCMME corporate

partner shortly after their arrival on campus during the fall Partners

Meeting, and will continue their involvement in the manufacturing

sector during throughout their tenure as DCMME graduate assistants.

scholarship programD C M M E

SAINT-GOBAIN CONTAINERS

ROLLS-ROYCE KRANNERT GRADUATE SCHOLARSHIPS

Benia Smith, Denny Warner (Vice President, Customer Operations), Rasheeda Washington. David Meyer, James Perkins and Herbert Moskowitz (DCMME Director).

Herbert Moskowitz (DCMME Director), Tiffany Small, Brent Horrocks and Howard Nelson.

Tom McDuffee (Vice President, Human Resources), Bernadeen Sierra, David Chipman, Jim Keener (Vice President, Manufacturing Process).

WABTEC CORPORATION

2004 Recipients

• Brent Horrocks

• Howard Nelson

• Tiffany Small

Two graduate students received this award for 2004.

• David Meyer

• James Perkins

2004 Recipients

• Bernadeen Sierra

• David Chipman

2004 Recipients

• Rasheeda Washington

• Benia Smith

Master’s Scholarship and Awards

Undergraduate Scholarships and Awards

Ryan Applegate

Kirandeep Atwall

Meredith Durham

Stuart Schultz

Gregory Young, Filipe Camacho, Alejandro Londono, Kok Seong Ngan (not pictured), Anthony Rekeweg (not pictured).

PHILIP MORRIS MANUFACTURING SCHOLARSHIP

Philip Morris gives three master’s level scholarships annually to first-year students who are interestedin operations or manufacturing management. This award carries a $3,000 annual cash award, $1,500 over two semesters.

• Ryan Applegate

• Kirandeep Atwall

• Meredith Durham

MICHAEL & JO ANN ALLEN GRADUATE AWARD

This award is given annually to an MTMstudent who demonstrates a high level ofenthusiasm for manufacturing managementthrough participation in the Projects inManufacturing course and the activities of the Operations Club. 2004 recipients received $2,000.

2004 Recipient

• Stuart Schultz

DCMME made five undergraduate studentawards for 2004. The students were awarded$1,000 per semester. Undergraduates mayapply at the end of their sophomore year.

2004 Recipients

• Filipe Camacho

• Alejandro Londono

• Kok Seong Ngan (not pictured)

• Anthony Rekeweg (not pictured)

• Gregory Young

MANUFACTURING MANAGEMENT SCHOLARSHIPS

DELPHI CORPORATION MANUFACTURING SCHOLARSHIP

We wish to thank Delphi Corporation fortheir support and sponsorship of this and the graduate scholarships. Together with our partners, DCMME’s goal to promote and aid in the development and diversity of manufacturing professionals.

2004 Recipients

• Kathryn Goodrich

• Earl Hart (not pictured)

Kathryn Goodrich, Bill Guggina (Managing Director, Kokomo Operations), Earl Hart (not pictured).

KOC2004-05 OfficersRicardo Taveira, PresidentJonah Detro, Vice-President of FinanceDavid Meyer, Vice-President of Alumni and DCMME relationsAbigail Hale, Vice-President of Public RelationsW. Findley Griffiths, Vice-President of interface with KGSAIntikhab Alam, Vice-President of Technology and ProjectsPaul Rowe, Vice-President of ProjectsBrad Husted, Vice-President of ProjectsSteve Shade, Staff AdvisorProf. James Ward, Faculty Advisor

2003-04 OfficersGeoffrey M. Inget, PresidentChristopher Hiatt, Vice PresidentLayne Jones, Vice PresidentDaniel Guo, Vice PresidentMark Wang, Vice PresidentSanjay Garg, Vice PresidentSteve Shade, Staff AdvisorProf. James Ward, Faculty Advisor

HighlightsOn November 12, 2004, Krannert Operations Club (KOC) took its annual plant tour to the American Axle & Manufacturing plant in Three Rivers, Michigan. With sponsorship from DCMME, 23 KOC members toured the world-class facility that employs morethan 1,000 associates.

KOC members engaged in three different continuous improvementprojects related to Lean Manufacturing and had the opportunity to collect data as a team and develop recommendations for the company.

American Axle & Manufacturing (AAM) has used these plant tours toidentify potential candidates for its MBA internship program. RicardoTaviera, a second-year MBA student and 2004-05 president of KOC,participated in the 2003 tour and, as a result interned with AAM thispast summer. He will join the company when he finishes his MBAin May 2005. (Photos from plant tours pictured here to the right.)

Speakers• Dave Hinko, Rolls Royce: “Project Management the APICS Way”• Tom Ribar, Management Solutions Intl: “Ten Commandments

of Manufacturing”• Diane Beever, David Gile and Lee Kirk, Dell Computer:

“Supply Chain & Operational Excellence”• Linda Wiggs, Delphi

Learning ToursEaton Corporation, Greenfield, INAmerican Axle & Manufacturing, Three Rivers, MI

Case CompetitionsKrannert Operations Case Competition, September 2004Carnegie Mellon International Operations Case Competition,November 2004

K R A N N E R TO P E R A T I O N S

C L U B

The Krannert Operations Club (KOC) is a student-led organization sponsored in part by DCMME. The KOC is a vehicle by which students interested in operations management careers participate in networking,

educational and social activities. KOC activities include learning tours, industry speakers, social gatherings, workshops, seminars, case competitions and certification assistance. The KOC also co-sponsor and promote

activities for other student organizations on campus, including APICS, Industrial management Student Association (IMSA) and the Institute for Operations Research and Management Science (INFORMS).

The following is a selection of events our club has participated in over the past year that demonstrate the diversity of activities our club participates in: Ford Finance Speaker with Industrial EngineeringSchool, Oldcastle Manufacturing Presentation, OLS Professor /Attorney Speaker, Bowling Social Function, Boiler Blast CommunityService Event.

2004 Executive CouncilPresident: Elizabeth AbbottVice President: Jared PrickelTreasurer: Craig CollinsSecretary: Kathryn Goodrich

Note from the president…To write about the year in review for Industrial Management StudentAssociation is a daunting task. It is almost impossible to articulate the opportunities afforded through my both my membership and presidency to this club. For me this organization has afforded so many opportunities both in my professional as well as academiccareer. Thanks for the wonderful experience and I wish you a prosperous 2005.

Sincerely, Elizabeth Abbott

I N D U S T R I A LM A N A G E M E N T

S T U D E N TA S S O C I A T I O N

IMSA

The Industrial Management Student Association (IMSA) is a student-run organizationopen to all undergraduate students. Its members share of a common interest in the

technical aspects of the modern business environment and many are pursuing minorsin fields such as manufacturing management, industrial engineering, management

information systems, and various sciences. The mission of the organization is to assistmembers in their academic pursuits, to increase their familiarity with the job search

process, to act as a liaison between students and companies, and to provide community service. These goals are accomplished through activities such as guestspeakers, plant trips, workshops, social events, and service events in the local area.

engagementengagementA P P LY I N G A N D E X C H A N G I N G K N O W L E D G E

tThe genesis of DCMME’s interest in the healthcare industryand more specifically DCMME’s involvement with IndianaUniversity’s Medical Group was a result of one of the principalinvestigators (DCMME’s director, Herbert Moskowitz) attendinga recent Summit at the Juran Institute at the University ofMinnesota (June 15-16, 2004). The theme for the Summit was the Sustainability of Quality. An area of major focus washealthcare. There were several major speakers at the Summitwho addressed the challenges, opportunities, and activities inthe healthcare industry. Two of these speakers, who were mostinspiring, were:

Paul O’Neill, former CEO of ALCOA & U.S. Secretary of the Treasury; now president and CEO of the Pittsburgh Regional Healthcare Institute; and

Dennis Cortese, president and CEO of the Mayo Clinic.

Both of these speakers, as well as others were advocating and implementing the application of successful manufacturingand quality practices in their respective organizations (e.g.,lean thinking, supply chain management, and Six Sigma)toward improving healthcare processes and practices.Moreover, improving healthcare systems and processes from both a micro and macro perspective has major impact on manufacturing enterprises and hence the economic viability and health of manufacturing in Indiana.

The above event motivated DCMME to explore researchopportunities with Dr. Deanna Willis, Medical Director of Quality at the Indiana University Medical Center (LongHospital), who had previously contacted Dr. Moskowitzregarding a need for such assistance and collaboration in

improving operational efficiency at the IU Medical Center.Based on several visits and discussions with Dr. Willis and herstaff in July and August, the Grassy Creek Clinic was selectedand approved as a “living laboratory” for observation andanalysis. Visits to the site and interactions with Dr. RandallReed, M.D. and Director of the Grassy Creek Clinic, resultedin identifying an initial project, namely, the registration processat the clinic. The Purdue team consisted of Suresh Chand,Herb Moskowitz, Lee Schwarz, Steve Shade and a group ofMBA students in the Manufacturing Technology Managementoption who are participating as part of course credit in a Lean Enterprise course involving applications of lean thinkingto practice. The IU Medical team participants were DeannaWillis, M.D. & Quality Director of IU Medical Group, RandallReed, M.D. and Director of the Grassy Creek Clinic, and KellyResch, Site Director for the Grassy Creek Clinic.

The initial project effort focused on the registration process,applying well-understood operations principles to identifypotential bottlenecks – places where the system is subjected to greater demand than it can handle and then to alleviatethem by balancing the components of the process, smoothingdemand as is feasible, and shifting capacity during peak periods with the goal of improving the process efficiency of the clinic by balancing demand (patient arriving for serviceat a given time) with supply (efficient use and deployment ofclinic staff and resources). After their initial visits, the team recognized the key to quality and productivity improvement at the clinic would hinge on reducing and managing processvariation.

The proposed approach was similar to what manufacturingindustries have been using for decades. The time has come

Improving the Patient Flow at the Grassy Creek Clinic

Purdue faculty members Kemal Altinkemer (Associate Professor in ManagementInformation Systems), Okan Ersoy (Professor in Electrical and Computer Engineering), and Herb Moskowitz (Lewis B. Cullman Distinguished Professor of ManufacturingManagement and Director of the Dauch Center for the Management of ManufacturingEnterprises) are currently conducting research into Automated Intelligent ManufacturingSystems (AIMS) with adaptive and control capabilities.

The goal of this research is to move one step forward in advanced and advancing manufacturing; namely, in helping to define and envision the manufacturing enterprisesof the future by developing and assessing the value of deploying an Automated IntelligentManufacturing System to facilitate continuous process improvement by facilitating theeffectiveness and efficiency of decision making.

AIMS will be designed to employ the development and use of machine learning techniques, such as support vector machines, artificial neural networks, and genetic algorithms, as a means of continuously monitoring and adapting, providing feedback, and adjusting system parameters and configurations to contemporaneously optimize (i.e., achieve what is theoretically possible) system performance, minimize cost, maximize quality (yield) and productivity (minimize cycle time).

Six Sigma, as a business strategy and quality discipline, is highly amenable to such anapproach, in the sense that it combines the advantages of what both humans and rule-based (non-human, automated) systems can do best in process management. What makesthe approach feasible and indeed desirable is the fact that IT has enabled organizations to automate their data/information gathering systems in manufacturing (and in otherdomains). What remains to be done is to automate the analysis and synthesis of this information to enhance the decision process. Since much of such analysis is statistical in nature, it is plausible that this task be automated, freeing the individual (or teams) to perform more creative activities, which complement and support the analytical anddecision-making process. We have applied our concept and methodology to a consumerelectronics manufacturing process, supply chain, and to pharmaceutical developmentand manufacturing. We anticipate using our algorithms to improve the productivity andeffectiveness of healthcare delivery systems as well as dealing with issues in homelandsecurity. Funding for our efforts has been derived via industrial organizations and PurdueUniversity’s Discovery Park.

Automated Intelligent ManufacturingSystems (AIMS) Research

for the healthcare industry to adopt and deploy the process improvement approaches used in manufacturing and obtain the resulting benefits.

Project Description & Tasks

The deliverables for the project were focused on the registration process as outlined below:

1. Value stream map the registration process.2. Collect observational data on the activities

constituting the process;3. Collectively (IU Medical & Purdue teams) /tasks

begin to identify opportunities and sources of potential improvement.

4. Build and implement an animated simulation model of the processa. Identify & demonstrate bottlenecks.b. Identify & demonstrate improvement

opportunities.5. Reporting …providing status & final reports

to medical staff & physicians.

At the time of printing, progress had been made on all of the deliverables. DCMME would like torecognize the fine work put in by the students in the Lean Enterprise course; Findley Griffiths, BradHusted, Dave Meyer, and James Perkins. DCMMEwould also like to thank the physicians and staff ofthe Grassy Creek clinic for the outstanding supportin welcoming the research team and students andfor the tireless efforts in working to improveIndiana’s healthcare system.

In 2004, during the Fall Partner’s Meeting on September30th, Saint-Gobain Containers (SGC) sponsored an internalcase competition between Purdue Operations Club students.The goals of the competition were to first, give the competingstudents an opportunity to experience a situation like that of the Carnegie Mellon annual case competition prior to representing Purdue, and second, to select a team to represent Krannert Graduate School of Management at the Carnegie Mellon competition.

The winning team of the five teams that entered the competition would, as a reward for success, receive $800 in prize money and a free trip to Pittsburg to attend theCarnegie Mellon case competition. The second place teamwould receive $400 in prize money. The third place teamwould receive $200 in prize money, and the fourth placeteam would receive $100 in prize money. Due to the generosity of SGC and Sr. VP of HR, Tom McDuffee, the fifth place team also received $100 in prize money. $1600 in total prize monies were awarded, not including the travel expenses of the winning team.

Teams were given a total of seven hours to analyze and prepare a presentation for a business case. The HBS case,“Medsource Technologies” was chosen. Each team memberwas required to present a portion of the case to the Partner’sat the Fall Partner’s Meeting. The presentations went well,and DCMME received several positive comments from thePartner’s about the strong performance of the Krannert

Case Competition*

Master’s students and the depth of the talent in the Master’sprogram. In addition, the Partner’s in attendance wereimpressed with the willingness of student to take on additionalresponsibilities over and above their regular assignments.

The results of the competition were as follows:

#1 – Team 3 (81.4 points) Sherry Chen, Meredith Durham, Brent Horrocks, Ernest Jutte

#2 – Team 1 (81.1 points) Micaela Ridge, Paul Rowe, Ricardo Taviera, Dave Meyer

#3 – Team 4 (77.7 points) Adam Byers, Phil Chen, Ben Neff, Bhushan Shah

#4 – Team 5 (73.5 points)Chen Han, Raymond Lee, Wei Lui, Wenkui Wang

#5 – Team 2 (70.9 points) Srini Iyer, Karan Malla, Sudi Ramakrishnan, Anoop Tiwari

This case competition would not have been possible withoutthe generosity of DCMME partner Saint-Gobain Containers.The competition was a valuable learning experience for all of those involved, and allowed DCMME and Krannert to showcase the talented students that are interested inManufacturing and Operations at Purdue to the Partners.Thank you again to SGC for their support.

* 2004 competition sponsored by DCMME partner Saint-Gobain Containers

becoming a partnerF A L L 2 0 0 4

P A R T N E R S ’ S T E E R I N G C O M M I T T E E M E E T I N G

• Become a financial partner by participating in the funding of DCMME at a level appropriate for your organization.

• Identify a representative from your organization to serve on DCMME’s advisory committee. This representative will attend our spring and fall partners’ meetings and provide feedback on our educational and research programs to ensure they remain aligned with the current issues facing manufacturing enterprises.

• Provide summer internship and/or full-time employment opportunities for qualified manufacturing management students.

A L L I S O N T R A N S M I S S I O N

A M E R I C A N A X L E A N D M A N U F A C T U R I N G

E A T O N C O R P O R A T I O N

E L I L I L LY A N D C O R P O R A T I O N

E N S I G N - B I C K F O R D I N D U S T R I E S

F O R D M O T O R C O M P A N Y

G E N E R A L M O T O R S

I N G E R S O L L - R A N D

K I M B E R LY- C L A R K

O W E N S C O R N I N G

P H I L L I P M O R R I S U S A

R O L L S - R O Y C E C O R P O R A T I O N

S A I N T- G O B A I N C O N T A I N E R S

W A B T E C C O R P O R A T I O N

D E L P H I A U T O M O T I V E

R O G E R W I L L I S ,

I N D E P E N D E N T C O N S U LT A N T

For many years,

DCMME has been

pleased to serve

as a channel

between Purdue’s

talented students,

expert Purdue

academicians and

the manufacturing

world through

its missionary

activity of

Learning,

Discovery and

Engagement.

Faculty Advisory Committee

The DCMME Faculty Advisory Committee is made up of senior faculty members in the KrannertSchool of Management who provide advice and counsel concerning the direction and goals of thecenter. A major task of the committee is to provide evaluation and guidance on the research and curriculum programs.

Chris BergerOrganizational Behaviorand Human Resources

Alok ChaturvediManagement Information Systems

Tom BrushStrategic Management

Manu KalwaniMarketing

Bill KrossAccounting

John McConnellFinance

Kwei TangQuantitative Methods

James WardOperations Management

Special Thanks

DCMME gives its sincere thanks to the many individuals who assisted in the production of the 2004 Annual Report. Their generous donation of time and effort have significantly added value to the publication.

INFORMATION PROVISION

• Hoi-Ming Chi

• Steve Shade

• David Meyer, MBA 2005

• Karen Pulliam

GENERAL SUPPORT

• Dawn Minns, designer

• Karen Pulliam, content and editing

The Dauch Center for the Management of Manufacturing EnterprisesKrannert School of Management

Purdue University403 W. State Street

West Lafayette, IN 47907-1310Phone (765) 494-4322

Fax (765) 494-9658E-mail: dcmme@mgmt.purdue.edu

http://www.mgmt.purdue.edu/centers/dcmme