Teaching Manufacturing to Finance Majors

A software simulation tool developed at the Wharton School aims to help students better understand the production process.

Anita Tucker, Assistant Professor, Operations and Information Management, Wharton School
Anita Tucker, Assistant Professor, Operations and Information Management, Wharton School

As a manufacturing professional, did you ever wish that the corporate MBAs who run your company’s finance department exhibited a better understanding of what actually takes place on the plant floor, and how their decisions can affect manufacturing operations?

Providing a bit more of that kind of education is the objective of PLANT, a software simulation tool developed for classroom use at the University of Pennsylvania’s Wharton School, one of the nation’s top business schools. PLANT, which stands for Production Line ANalyzation Tool, is a designed to let students work through various simulated production scenarios to see how changes in batch size and other variables can impact throughput times, inventory costs and other factors.

The program will be tested this fall in a Wharton class on lean production techniques, and will be phased in next spring as part of a required course on operations and information management (OPIM) for Masters of Business Administration students, says Anita Tucker, a Wharton assistant professor in the school’s OPIM department.

Rudimentary

Tucker came up with the idea for PLANT last spring, and the program was developed as a Web-based application by the Wharton Computing department this summer. Well over half of Wharton MBA students are finance majors, Tucker notes. And while many aspire to jobs in investment banking and other non-manufacturing areas, some are likely to end up working in the finance departments of manufacturing companies. At a minimum, says Tucker, this group needs at least a “rudimentary” understanding of the production process.

“I think it’s critically important that people in supportive roles understand how the decisions that they’re making on a day-to-day basis might impact their company’s ability to make goods and services, and to make a profit,” Tucker says. And those MBA students who do go on to become investment bankers, analysts or consultants may one day be making stock purchase recommendations on companies that produce goods and services, she adds. “So I think they need to understand what makes some companies profitable in this effort, more so than others.”

PLANT is designed to be used during one 80-minute class during the course of a semester. The program uses an icon-based interface to simulate a simple, five-stage production process for manufacturing cellular phones. Students are given various production scenarios involving differing batch sizes and variations in incoming order sizes, among other factors, including sudden, unexpected changes in demand, says Tucker. By running the simulation, students are able to see the impact of changes on throughput, operator uptime, profitability and other financial measures, she notes.

Keep it simple

The PLANT program is less elaborate than production simulation systems used at some other universities, which typically require students to spend time outside the classroom developing and configuring entire production lines, says Tucker. “What I wanted to do was develop a much simpler way to get simulation into the classroom, so that as a professor, I don’t have to teach about simulation,” she explains. “I just really want to focus on having the students see the impact of changing batch sizes.”

The PLANT program and associated teaching materials will be further developed, based on classroom experience at Wharton, says Tucker. The package may eventually be made available for use by other universities, or even by companies for use in training.

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