Most graduate students today are required to work with computers on complex projects at some point during their coursework. But at Stanford University, professors in the School of Business have taken technology as a teaching aid to a higher level.

Professors Sam Wood and Sunil Kumar think they've created the ultimate in computer-based learning, a virtual factory they call Littlefield Technologies. Introduced as part of the mandatory operations management course for MBAs, the factory requires around-the-clock student management by computer, forcing students to learn and refine several fundamental operations concepts, including capacity planning, scheduling and inventory management.

So far, the project has not only fostered a competitive learning environment that motivates students, but also lets them apply what they learn in the classroom in a way that mirrors real-world pitfalls.

Set up like a job-shop which assembles digital satellite system receivers, Littlefield Technologies is programmed to run continuouslyon the Internet, giving it a "realism that you can't get by giving this out on floppies," Kumar said.

Like a real factory, Littlefield Technologies can experience unexpectedly long manufacturing times, receive a flood of orders in the middle of the night, or suddenly run out of parts if students don't plan for sufficient inventory. "The factory performs as a function of the choices students have made and the uncertainty in the environment," Wood said.

Rules to Follow

Students participating in the Littlefield Technologies project must manage their virtual factory through four key steps carried out at three stations within the factory. Students have the option of purchasing additional machines to perform these tasks. They can also sell machines at a relatively small retirement price. As orders flow in, there are many critical rules to remember. If rules are not followed, or poor decisions are made, students see the resulting downturn almost immediately.

"The factory runs at the rate of one simulated day per one real hour. At any time of the day or night when it is running, students can get on the Internet to see how they're doing compared to the other teams," said Wood. "This gives them constant feedback on the effects of their decisions. It not only makes the game competitive, it also makes it fun and motivational."

Students must also quote lead times to customers during the simulation. Student teams quoting shorter lead times make more money if they meet those quotes, but pay stiff penalties if they fail. The winning team is the one with the most cash at the end of the game.

Students, who break into teams of four to take over Littlefield Technologies, often get so intrigued by the game they spend significant time on it, according to Wood.

"We have heard of teams that assign shifts to various team members so they are monitoring it all through the night," Wood said. "But the winners aren't necessarily those teams that put in the most time. The best scorers are usually the best planners."

Wood said one winning team was actually on a ski trip when the most critical business decision needed to be made. But because the team knew they were going to be away, they performed a significant amount of analysis early on to predict what they would need and when they would need it. They then set their factory up based on that analysis.

"Many of the other students were in a reactive mode, so they waited to see the problem pop up before they tried to fix it. The team on the ski trip never had the problem because they fixed it before it happened," Wood said. "In general, we've tried to set up the assignment so that being proactive is more rewarding than being reactive."

Distinguishing Features