Applying Performance Measures and Process Improvements in the Classroom: The Loch Dots Company Simulation

ABSTRACT The article describes a multi‐phase, in‐class simulation that employs problem‐based learning to teach operations and process‐improvement concepts as part of an undergraduate or graduate business course. The simulation is derived from a corporate Lean Six Sigma training activity and has been modified to introduce, demonstrate, and apply a wide range of business concepts relevant to operations and supply chain management, including the use of operational and financial performance measures in decision making. The activity is scalable for small‐ to medium‐size classes with multiple student groups and may be deployed as a stand‐alone, in‐class exercise spread over several class meetings or incorporated into a larger, semester‐long process‐improvement project for multiple student groups. The simulation emphasizes problem‐solving, teamwork, and intra‐firm cooperation in addition to 20–30 other business concepts, tools, and measures that may be incorporated.