Zarco, Incorporated: a Deming-Inspired, Opening Day Operations Management Experiential

ZARCO, INCORPORATED: A DEMING-INSPIRED, OPENING DAY OPERATIONS MANAGEMENT EXPERIENTIAL LEARNING ACTIVITY

Tony Polito

School of Business, East Carolina University, Greenville, NC 27858 (252) 328-6569,

Kevin Watson

School of Management, Marist College, Poughkeepsie, NY 12601 (845) 575-3000,

Tom Groleau

Department of Business Administration, Carthage College, Kenosha, WI 53140 (262) 551-5983,

ABSTRACT

Classroom experiential exercises can be used to generate interest in discipline subject matter, a special concern of instructors when a high percentage of non-majors are enrolled in a core introductory course outside their discipline. In addition, the first and final activity in a service encounter has strong influence over total participant satisfaction. Accordingly the authors have developed and continued to refine, since 1994, a mock factory activity -- inspired in part by the Deming philosophy -- called Zarco, Incorporated, intended for use on the opening day of an Introduction to Operations Management course. The authors believe the Zarco activity improves the quality of education through increased student mastery of concepts and increased student satisfaction. This work details the aims and structure of the Zarco activity, then goes on to propose a methodology by which the effectiveness of the Zarco activity toward its aim can be measured and by which appropriate conclusions can be drawn. Point of contact information is provided that can be used by other Operations Management instructors so that they may obtain the Zarco lesson plan materials for use and experimentation in their own classrooms.

DEMING, QUALITY AND EDUCATION

The authors are inspired to improve classroom quality toward improved outcomes by the management philosophy of W. Edwards Deming, who advocated quality as the appropriate central aim for management, as well as by Deming protégés, who especially and strongly advocate the employment of Deming techniques and other valid quality techniques in the classroom. Deming advocates the improvement of processes before outcomes, and the authors expect that the insertion of the Zarco process into the coursework will improve quality of learning via a higher degree of mastery, interest and satisfaction. The influence of the Deming philosophy on educational practices is a topic that can not be synopsized herein; however, there is a large body of work on this topic and the reader is referred to books by Lee Jenkins [5], Alfie Kohn [6], and James F. Leonard [9] as exemplars as well as to comments made on the topic by Deming himself in his books [3] [4].

The Zarco activity also exemplifies Deming’s systematic perspective as well as other portions of the Deming philosophy, and it that sense serves to introduce the learner to portions of that subject matter as well.

THE ZARCO EXPERIENTIAL LEARNING ACTIVITY

The Zarco activity is usually introduced without explanation as the instructor begins in front of the class to assemble a “ZargPak,” a product built from pieces of paper with colored triangles, circles and rectangles traced upon them, that are then assembled using rubber bands, staples and paper clips. Student attention typically and quickly focuses well on the unexpected and unusual activity. After demonstrating and timing a ZargPak assembly, the students are asked to raise their hands if any of them believes they could not assemble one, given the example just assembled. Invariably, no hands are raised. The instructor is then free to select any four students and to inform them that they will be the new Zarco factory workers at the ZargPak plant with the aim of producing as many ZargPaks. The students are given five to eight minutes outside the room to design their new factory layout, assign responsibility and so forth. The workers are given a handout with assembly details and a cautionary note advising special consideration regarding the possibility product changes and customer returns.

While the workers are excused, the instructor presents further details of what the Zarco activity will entail as he/she selects and instructs the participants. Three customers are selected. The class is told that the customers will “reverse-engineer” each ZargPak and check for objective defects in assembly. Further, the customers are empowered to employ the subjective trait of “tracing neatness” to also reject ZargPaks. A Vice-President of Marketing is selected to announce and hand the workers a memo at 6 or 7 minutes into the production period stating that due to changes in customer preference, ZargPaks may now only ship with red circles and not with the original red triangles. A shipping clerk is selected to track the number of ZargPaks shipped, accepted and rejected. A timekeeper is selected to time the ten-minute production period and the release of the marketing memo and to announce timing of the production period as it draws to a close. All are given handouts detailing their responsibilities.

The rest of the students are involved in the experience as “accountants.” After the production period, they will calculate a set of simplified versions of performance measures: quality level, rework as percentage of sales, scrap as a percentages of sales, time to market increase from craftsmanship (individual production) via industrialization, productivity per worker increase from craftsmanship (individual production) via industrialization.

The accountants are instructed to observe and detect any errors in counting, as the accuracy of their calculations will depend upon it. They are also engaged in the experience as they are also told to observe and make note of the positive and negative aspects of the factory operation in preparation for later discussion.

If executed properly, the Zarco activity runs well with minimal direction required of the instructor. During the production period, the instructor acts as the plant manager, who primarily chides the workers in front of the accountants for disappointing outcomes. The instructor will typically find he/she may invoke light sarcasm regarding idle workers, excess inventory, rejected ZargPak lying unattended and un-reworked, the factory’s inability to build at the rate of four individual assemblers and so forth. This tone is directly inspired by Deming’s tone with his “workers willing to do their best” during his infamous “red bead” experiment.

At the end of the production period, the instructor reviews the materials left on “the factory floor” and accordingly estimates the amount of rework (returned ZargPaks left unattended), scrap (red triangles left unused after the marketing change) and work-in-process (partially completed ZargPaks). These estimates are required for the calculation of performance measures. The accountants quickly and correctly completed using their “plug and chug” handout.

Typically, students finding observing the Zarco production period interesting and fun, and so are more eager than typical to engage in open discussion. The Zarco activity engages the learner both during the demonstration as well as in the later discussion.

The factory performance results vary from session to session, but, almost invariably, some measures are favorable while others are not. The change from triangles to circles often results in significant scrap and rework. End of period push is another common phenomena that results in a high rejection rate just as the production period ends. Regardless of the outcome, the activity provides much opportunity for discussion.

In addition to examining why some performance measures were disappointing, the instructor can raise other interesting topics. “Was not every worker doing his best, trying to do his job? If so, why did things go poorly?” Another interesting discussion can be invoked by asking students to consider whether doubling worker pay … or a wad of $20 bills ... would result in improved measures from the factory just observed. These topics are also inspired by Deming’s systematic perspective, demonstrations and famous quotations.

The notion of a “mock factory” activity for experiential learning is not original. The authors are aware of several, such as the “Styro” activity developed by John Deere employees and distributed through APICS, as well as an in-house videos developed at HewlettPackard and paperairplane “factories” observed in other OM classrooms. A recent DSI instructional innovation finalist presented the use of LEGO blocks to facilitate learning of core OM concepts [13]. Further, Bob Jacobs, Professor of Operations Management, Indiana University [8], as well as Ron Wright and Salwa Ammar of Le Moyne College [7], maintain websites devoted to Operations Management experiential learning activities. To the best of the authors’ knowledge, however, the Zarco activity is the most thoroughly developed, most quantified and most studentcentered activity of its type.

STUDENT MASTERY AND SATISFACTION

The Zarco experiential learning activity is believed to positive effect both student mastery and student satisfaction. The authors believe that the experiential nature of the activity heightens student attention during the learning process and so enhances the effect.

The Zarco activity is expected to influence student mastery, in part, in that it assists students in visualizing Operations Management concepts that, to those lacking significant industrial experience, are little more than abstract in nature. The Zarco provides a common point of lecture reference during the course for operations management nomenclature and concepts. Many common OM concepts (e.g., “excess inventory,” “scrap & rework,” “end-of-period push,” “customer-driven,” “inspected-in quality”) can be directly exemplified via the Zarco activity. This visualization and ready exemplification, it is believed by the authors, significantly improves the student’s ability to understand the concept and, so, to achieve a higher degree of concept mastery.

The Zarco activity is expected to influence student satisfaction, in part, in that it serves as a “service bookend.” Service quality literature suggests that the first and final activities in the “service encounter” have great weight upon consumer satisfaction. Advocates of service bookends believe that extra and special effort should be made to manage customer perceptions at the very beginning and the very end of their service encounter as these bookends will have a great deal of influence over how the entire service experience is perceived by the customer. One does not have to look far to see examples of service professionals practicing the art of service bookends:

New car salesmen often send an unexpected small free gift to customers several weeks after their purchase (but before the sales satisfaction survey arrives)

Tourists to Hawaii are often greeted by having a wreath of flowers placed around their neck

There is likely a body of evidence within psychology research to support the notion of service bookends. For example, there is much good evidence to support the hypothesis that the impression made during the first minutes of a job interview is strongly related to the final hiring decision.

METHODOLOGY

Two propositions are formed in accordance with the stated aims of the Zarco experiential learning activity:

P1:The opening day Zarco experiential learning activity increases student satisfaction.

P2:The opening day Zarco experiential learning activity increases student mastery of introductory Operations Management concepts.

In order to test these propositions, a control group will be compared to a group that has received the opening day Zarco experiential learning activity treatment. Certain sections of Introduction to Operations Management will be selected at random to receive the treatment on the first day of the course; the remainder will receive the course without the activity.

To test P1, data regarding student satisfaction will be extracted from the usual end-of-course student evaluation as well as from a separately administered satisfaction instrument, SERVQUAL [10] [11], commonly used for measurement of service quality perception and “the voice of the customer.” While there is some research that questions the generalizability of the SERVQUAL instrument, most notably the work of Joe Cronin at Florida State University [1] [2], SERVQUAL should generally function well as a source of measured satisfaction. Simple t-tests and Pearson's r will be used to detect any significant differences.

To test P2, data regarding student comprehension will be extracted from the typical measures such as examinations and final course marks and the groups will be compared for significant difference via straightforward t-tests. In addition, for both the control group and the group receiving the Zarco experiential learning activity treatment, the closing course activity will be a replication of the Zarco activity. The authors reasonably expect, from prior informal experience with a closing Zarco activity, that student mastery of typical Operations Management concepts (e.g., kanban/pull, customer focus, quality at the process, inventory concerns) contributes to improve Zarco performance measures. Differences between treatment group and control group productivity measures resulting from a closing Zarco activity can, therefore, be interpreted as treatment effect upon mastery.

POINT OF CONTACT FOR ZARCO LESSON PLAN MATERIALS

At this writing, the student handouts and instructor lesson plan for the Zarco activity can be obtained by either Email request to or by accessing the URL , where the materials are available for download in Microsoft Word format.

REFERENCES

[1]Cronin, J. Joseph, Jr. and Taylor, Steven A. 1992. Measuring service quality: A reexamination and extension. Journal of Marketing. 56(3): 55-68.

[2]Cronin, J. Joseph, Jr. and Taylor, Steven A. 1994. SERVPERF versus SERVQUAL: Reconciling performance-based and perceptions-minus-expectations measurement of service quality. Journal of Marketing. 58(1): 125-132.

[3]Deming, W. Edwards. 1986. Out of the crisis. Massachusetts Institute of Technology Center for Advanced Engineering Study. Cambridge, Massachusetts.

[4]Deming, W. Edwards. 1994. The new economics for industry, government, education. Second Edition. Massachusetts Institute of Technology Center for Advanced Engineering Study. Cambridge, Massachusetts.

[5]Jenkins, Lee. 1997. Improving student learning applying Deming's quality principles in classrooms. ASQC Quality Press. Milwaukee, Wisconsin.

[6]Kohn, Alfie. 1993. Punished by rewards: The trouble with gold stars, incentive plans, A’s, praise and other bribes. Houghton Mifflin. New York, New York.

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[9]Leonard, James F. 1996. The new philosophy for K12 education: a Deming framework for transforming America's schools. ASQC Quality Press. Milwaukee, Wisconsin.

[10]Parasuraman, A., Zeithaml, Valarie A. and Berry, Leonard L. 1998. SERVQUAL: A multiple-item scale for measuring consumer perceptions of service quality. Journal of Retailing. 64(1): 12-40.

[11]Parasuraman, A., Berry, Leonard L. and Zeithmal, Valarie A. 1991. Refinement and Reassessment of the SERVQUAL Scale. Journal of Retailing. 67(4): 420450.

[12]Parasuraman, A., Zeithaml, Valarie A. & Berry, Leonard L. 1990. Delivering service quality: Balancing customer perceptions and expectations. Free Press. New York, New York.

[13]Satzler, Larry and Chwen Sheu, Chwen. 2001. Facilitating Learning in Operations Management MegaClass Using Integrated LEGO Projects. Proceedings of the 32nd Annual Meeting of the Decision Sciences Institute. San Francisco, California.