Leaders for Global Operations

Update for alumni

October 9, 2009

We will give an overview of topics of major interest to alumni

• Brand, governance and strategy

• Finances and membership

• Intellectual and academic

• China LFM

• Students, recruitment and admissions

LGO is well positioned but challenges remain

• The new brand appears to be very successful

• The financial model has worked well

• Applications increased over 20% to 239

• The new matching process achieved higher satisfaction among companies and students.

• We were able to find internships for all students

• All 47 of the class of 2009 have jobs and the percentage to partner companies reached 60%

• China LFM has now started three classes

• The major challenge is new partners

Most significantly, we have a new name and brand

• Process involving two steps (brand and name), a steering committee, McKinsey and multiple surveys

• New vision and vision approved last October by board

• Name change approved by Board in February and then by MIT

• New name effective as of June 1

• New brand reflects effective change in breadth of LGO program in recent years

• Positive feedback from all constituents

Vision and mission

“A partnership between MIT and industry that is the premier program for developing leaders of operations-oriented companies who bring both a management perspective and deep technical understanding.”

“To generate cutting edge knowledge at the intersection of engineering and management, and to educate leaders to address the world’s most challenging operations problems.”

Page 5

Rebranding: Standing committees

• Knowledge and faculty

• Internships

• New partners

Page 6

The brand effect has been significant on new tracks

• ESD: Supply chains, Energy and Environmental Sustainability, and Systems Architecture

• ME: Manufacturing, Energy and Environmental Sustainability, Biomechanics

• CEE: Supply Chains

• EECS: Semiconductors, Information and Decision Systems (pending)

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Governance

• Governing Board chairs Larry Loftis of Boeing and Dick Johnston of Raytheon

• Dick is retiring and a replacement is being sought

• Board approval needed for new members

• Only members can sponsor internships, unless we have shortages

New Financial Model

New model approved by the Governing Board, June 2009

Effective starting 2010-2011 internship cycle (invoiced in May 2010)• Lowered internship fees from $86K to $75K• Free trial membership for 1st year still in effect• Increased annual fees from $50K to $75K for Managing Partners• Decrease joining fees cap from $100K to $75K (Limited Partner

joining fee formula remains at $12.5K per $1B in sales)

Success depends on increasing partner companies from 18 to 22

Internships

• Record number of 12 off-cycle internships

• Strong interest in energy and sustainability (mostly energy usage and conservation but also power products)

• Improved tracking and milestones through efforts of Ted Equi

• Improved satisfaction with double matching

• Reinstating of company liaisons on a pilot basis

We continue to make globalization a priority

• New partners (Zara, Novartis)

• China LFM (biannual trips, tiger/lion teams, etc.)

• Internships (12 among Novartis, ABB, Spirit, Zara, KCC, and Intel)

• Sloan and engineering activities

• International trip (this year is China)

Partnership is the critical area

• Big influx three years ago• Amgen, Novartis, Spirit, and Cisco – board members• Flextronics, Pepsi, American Axle, Perkin Elmer out

• Zara and Kimberly Clark since then

• Some long-time partners less active

• Imperative is new partners for expanded mission

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Recent Plant Tours

China LFM is now into its third class

China LFM

• The first three classes started in September of 2007 through 2009

• The first class finishes this January

• Jim Arnold has replaced George O’Keefe

• We hold board meetings twice a year

• 23 faculty have completed training

• We have had challenges in leadership (changed under our influence to Jesse Chen), applicant pool, and member retention, and engineering options but much progress has been made

Admissions

• Applications up to 239, a major increase (over 20%) from last year• Class started on June 1 with a cohort size of 47• Quality of new admits is high with:

• 3 Sponsored students from Boeing, Dell, and Raytheon

• Representation in all 8 engineering programs

• ESD represents about 50%

• Major marketing effort including enhanced direct communication, new video, Ambassador Days, an information evening, improved coordination with Sloan and SOE, improved materials, and web 2.0 campaign (facebook, blogs)

Class of 2011 Five-year Average

Students 47 47

Women 16 13

Under-represented Minorities 7 4

International 2 5

Average Age 28 28

Average Years Experience 5 5

Sponsored by Partner Companies

3 5

What the class is like

Class of 2009 Employment

(as of September 21, 2009)

HiredClass (n=47)

Partner Companies (sponsored students) 5 11%

Partner Companies (non-sponsored students) 23 49%

Other Manufacturing and Operations Companies 9 19%

Total Manufacturing and Operations 37 79%

Consulting and Financial Services 7 15%

Other Opportunities 3 6%

Total Employed 47 100%

Class size: 47 graduating students (5 Partner Company sponsored + 0 non-partner sponsored + 42 non-sponsored)

MIT Global Operations Conference

“New Visions for Global Operations: From Product Development through Delivery and Recycling”

• Sponsored by • Leaders for Global Operations• Industrial Liaison Program• MIT Forum for Supply Chain Innovation• System Design and Management Program

• December 2-3 in Wong Auditorium

• Employees of LGO partners will have complimentary registration

One Request…

• Update your virtual community record!

Receiving: 2009

WIP class of 2010

Shipping 2009