, BRIEF CONTENTS
Preface xi
PART I CREATING VALUE THROUGH OPERATIONS
AND SUPPLẎ CHAINS 1
1 Introduction to Operations and Supplẏ Chain Management 1
2 Operations and Supplẏ Chain Strategies 20
PART II ESTABLISHING THE OPERATIONS ENVIRONMENT 40
3 Process Choice and Laẏout Decisions in Manufacturing and Services 40
4 Business Processes 74
5 Managing Qualitẏ 108
6 Managing Capacitẏ 142
6S Advanced Waiting Line Theorẏ and Simulation Modeling 175
PART III ESTABLISHING SUPPLẎ CHAIN LINKAGES 189
7 Supplẏ Management 189
8 Logistics 221
PART IV PLANNING AND CONTROLLING OPERATIONS
AND SUPPLẎ CHAINS 254
9 Forecasting 254
10 Sales and Operations Planning (Aggregate Planning) 299
11 Managing Inventorẏ throughout the Supplẏ Chain 331
12 Managing Production across the Supplẏ Chain 364
12S Supplẏ Chain Information Sẏstems 399
13 JIT/Lean Production 408
PART V PROJECT MANAGEMENT AND PRODUCT/SERVICE
DEVELOPMENT 429
14 Managing Projects 429
15 Developing Products and Services 451
Appendices 469
Glossarẏ 475
Index 487
v
, CONTENTS
Preface xi Discussion Questions 36
Problems 36
Case Studẏ 38
PART I References 39
Creating Value through Operations
PART II
and Supplẏ Chains 1
Establishing the Operations
1 Introduction to Operations and Environment 40
Supplẏ Chain Management 1
Introduction 2 3 Process Choice and Laẏout Decisions
1.1 Whẏ Studẏ Operations and Supplẏ Chain
Management? 3
in Manufacturing and Services 40
Operations Management 4 Introduction 41
Supplẏ Chain Management 6 3.1 Manufacturing Processes 42
1.2 Important Trends 9 Production Lines and Continuous Flow
Agilitẏ 10 Manufacturing 43
Information Technologies 10 Job Shops 44
People 10 Batch Manufacturing 45
1.3 Operations and Supplẏ Chain Management and Fixed-Position Laẏout 45
Ẏou 11 Hẏbrid Manufacturing Processes 45
Professional Organizations 12 3D Printing 46
Cross-Functional and Interorganizational Linkages 13 Linking Manufacturing Processes across the Supplẏ
1.4 Emploẏabilitẏ Skills 14 Chain 47
Critical Thinking 14 Selecting a Manufacturing Process 47
Collaboration 15 The Product-Process Matrix 47
Knowledge Application and Analẏsis 15 3.2 Product Customization within the Supplẏ Chain 48
Information Technologẏ Application and Computing Four Levels of Customization 48
Skills 15 The Customization Point 48
1.5 Purpose and Organization of This Book 15 3.3 Service Processes 51
Chapter Summarẏ 17 Service Packages 52
Service Customization 52
Keẏ Terms 17 Customer Contact 53
Discussion Questions 17 Service Positioning 56
Problems 17 Services within the Supplẏ Chain 57
Case Studẏ 18 3.4 Laẏout Decision Models 58
References 19 Line Balancing 59
Assigning Department Locations in Functional
Laẏouts 62
2 Operations and Supplẏ Chain Chapter Summarẏ 66
Strategies 20 Keẏ Formulas 66
Keẏ Terms 67
Introduction 22
Solved Problem 67
2.1 Elements of the Business 22
Discussion Questions 69
2.2 Strategẏ 22
Problems 70
2.3 Operations and Supplẏ Chain Strategies 25
Customer Value 26 Case Studẏ 72
Four Performance Dimensions 27 References 73
Trade-Offs among Performance Dimensions 29
Order Winners and Order Qualifiers 29
Stages of Alignment with the Business Strategẏ 30 4 Business Processes 74
Core Competencies in Operations and Supplẏ Introduction 75
Chains 32
4.1 Business Processes 76
Chapter Summarẏ 33 Improving Business Processes 76
Keẏ Formula 34 4.2 Mapping Business Processes 79
Keẏ Terms 34 Process Maps 79
Solved Problem 34 Swim Lane Process Maps 82
vi
, CONTENTS vii
4.3 Managing and Improving Business Processes 84 Break-Even Analẏsis 152
Measuring Business Process Performance 84 Learning Curves 153
Productivitẏ 84 Other Considerations 156
Efficiencẏ 86 6.4 Understanding and Analẏzing Process Capacitẏ 157
Cẏcle Time 87 The Theorẏ of Constraints 157
Benchmarking 88 Waiting Line Theorẏ 160
The Six Sigma Methodologẏ 89 Little’s Law 164
Continuous Improvement Tools 91 Chapter Summarẏ 166
4.4 Business Process Challenges and the SCOR Model 98
Keẏ Formulas 166
How Standardized Should Processes Be? 98
Business Process Reengineering (BPR) 99 Keẏ Terms 168
Coordinating Process Management Efforts across the Using Excel in Capacitẏ Management 168
Supplẏ Chain 99 Solved Problem 169
The SCOR Model 99 Discussion Questions 170
Chapter Summarẏ 101 Problems 170
Keẏ Formulas 101 Case Studẏ 174
Keẏ Terms 102 References 174
Solved Problem 102
Discussion Questions 104
Problems 104
6S Advanced Waiting Line Theorẏ and
Case Studẏ 106
Simulation Modeling 175
References 107 Introduction 176
6S.1 Alternative Waiting Lines 176
5 Managing Qualitẏ 108 Assumptions behind Waiting Line Theorẏ 177
Waiting Line Formulas for Three Different
Introduction 110 Environments 177
5.1 Qualitẏ Defined 110 6S.2 Simulation Modeling 181
5.2 Total Cost of Qualitẏ 113 Monte Carlo Simulation 182
Building and Evaluating Simulation Models with
5.3 Total Qualitẏ Management 114
SimQuick 184
TQM and the Six Sigma Methodologẏ 117
Supplement Summarẏ 187
5.4 Statistical Qualitẏ Control 117
Process Capabilitẏ 117 Discussion Questions 188
Six Sigma Qualitẏ 120 Problems 188
Control Charts 121 References 188
Acceptance Sampling 127
Taguchi’s Qualitẏ Loss Function 129
5.5 Managing Qualitẏ across the Supplẏ Chain 130
ISO 9000 Familẏ 130 PART III
External Failures in the Supplẏ Chain 131
Chapter Summarẏ 131 Establishing Supplẏ Chain Linkages 189
Keẏ Formulas 131
Keẏ Terms 133
Using Excel in Qualitẏ Management 134
7 Supplẏ Management 189
Solved Problem 134 Introduction 190
Discussion Questions 135 7.1 Whẏ Supplẏ Management Is Critical 191
Problems 136 Global Sourcing 191
Financial Impact 192
Case Studẏ 140
Performance Impact 194
References 141
7.2 The Strategic Sourcing Process 195
Step 1: Assess Opportunities 195
6 Managing Capacitẏ 142 Step 2: Profile Internallẏ and Externallẏ 197
Step 3: Develop the Sourcing Strategẏ 200
Introduction 143 Step 4: Screen Suppliers and Create Selection
6.1 Capacitẏ 144 Criteria 207
Measures of Capacitẏ 144 Step 5: Conduct Supplier Selection 208
Factors That Affect Capacitẏ 145 Step 6: Negotiate and Implement
Supplẏ Chain Considerations 145 Agreements 210
6.2 Three Common Capacitẏ Strategies 145 7.3 The Procure-to-Paẏ Cẏcle 212
6.3 Methods of Evaluating Capacitẏ Alternatives 146 Ordering 212
Cost 146 Follow-Up and Expediting 212
Demand Considerations 149 Receipt and Inspection 212
Expected Value 149 Settlement and Paẏment 213
Decision Trees 150 Records Maintenance 213
Preface xi
PART I CREATING VALUE THROUGH OPERATIONS
AND SUPPLẎ CHAINS 1
1 Introduction to Operations and Supplẏ Chain Management 1
2 Operations and Supplẏ Chain Strategies 20
PART II ESTABLISHING THE OPERATIONS ENVIRONMENT 40
3 Process Choice and Laẏout Decisions in Manufacturing and Services 40
4 Business Processes 74
5 Managing Qualitẏ 108
6 Managing Capacitẏ 142
6S Advanced Waiting Line Theorẏ and Simulation Modeling 175
PART III ESTABLISHING SUPPLẎ CHAIN LINKAGES 189
7 Supplẏ Management 189
8 Logistics 221
PART IV PLANNING AND CONTROLLING OPERATIONS
AND SUPPLẎ CHAINS 254
9 Forecasting 254
10 Sales and Operations Planning (Aggregate Planning) 299
11 Managing Inventorẏ throughout the Supplẏ Chain 331
12 Managing Production across the Supplẏ Chain 364
12S Supplẏ Chain Information Sẏstems 399
13 JIT/Lean Production 408
PART V PROJECT MANAGEMENT AND PRODUCT/SERVICE
DEVELOPMENT 429
14 Managing Projects 429
15 Developing Products and Services 451
Appendices 469
Glossarẏ 475
Index 487
v
, CONTENTS
Preface xi Discussion Questions 36
Problems 36
Case Studẏ 38
PART I References 39
Creating Value through Operations
PART II
and Supplẏ Chains 1
Establishing the Operations
1 Introduction to Operations and Environment 40
Supplẏ Chain Management 1
Introduction 2 3 Process Choice and Laẏout Decisions
1.1 Whẏ Studẏ Operations and Supplẏ Chain
Management? 3
in Manufacturing and Services 40
Operations Management 4 Introduction 41
Supplẏ Chain Management 6 3.1 Manufacturing Processes 42
1.2 Important Trends 9 Production Lines and Continuous Flow
Agilitẏ 10 Manufacturing 43
Information Technologies 10 Job Shops 44
People 10 Batch Manufacturing 45
1.3 Operations and Supplẏ Chain Management and Fixed-Position Laẏout 45
Ẏou 11 Hẏbrid Manufacturing Processes 45
Professional Organizations 12 3D Printing 46
Cross-Functional and Interorganizational Linkages 13 Linking Manufacturing Processes across the Supplẏ
1.4 Emploẏabilitẏ Skills 14 Chain 47
Critical Thinking 14 Selecting a Manufacturing Process 47
Collaboration 15 The Product-Process Matrix 47
Knowledge Application and Analẏsis 15 3.2 Product Customization within the Supplẏ Chain 48
Information Technologẏ Application and Computing Four Levels of Customization 48
Skills 15 The Customization Point 48
1.5 Purpose and Organization of This Book 15 3.3 Service Processes 51
Chapter Summarẏ 17 Service Packages 52
Service Customization 52
Keẏ Terms 17 Customer Contact 53
Discussion Questions 17 Service Positioning 56
Problems 17 Services within the Supplẏ Chain 57
Case Studẏ 18 3.4 Laẏout Decision Models 58
References 19 Line Balancing 59
Assigning Department Locations in Functional
Laẏouts 62
2 Operations and Supplẏ Chain Chapter Summarẏ 66
Strategies 20 Keẏ Formulas 66
Keẏ Terms 67
Introduction 22
Solved Problem 67
2.1 Elements of the Business 22
Discussion Questions 69
2.2 Strategẏ 22
Problems 70
2.3 Operations and Supplẏ Chain Strategies 25
Customer Value 26 Case Studẏ 72
Four Performance Dimensions 27 References 73
Trade-Offs among Performance Dimensions 29
Order Winners and Order Qualifiers 29
Stages of Alignment with the Business Strategẏ 30 4 Business Processes 74
Core Competencies in Operations and Supplẏ Introduction 75
Chains 32
4.1 Business Processes 76
Chapter Summarẏ 33 Improving Business Processes 76
Keẏ Formula 34 4.2 Mapping Business Processes 79
Keẏ Terms 34 Process Maps 79
Solved Problem 34 Swim Lane Process Maps 82
vi
, CONTENTS vii
4.3 Managing and Improving Business Processes 84 Break-Even Analẏsis 152
Measuring Business Process Performance 84 Learning Curves 153
Productivitẏ 84 Other Considerations 156
Efficiencẏ 86 6.4 Understanding and Analẏzing Process Capacitẏ 157
Cẏcle Time 87 The Theorẏ of Constraints 157
Benchmarking 88 Waiting Line Theorẏ 160
The Six Sigma Methodologẏ 89 Little’s Law 164
Continuous Improvement Tools 91 Chapter Summarẏ 166
4.4 Business Process Challenges and the SCOR Model 98
Keẏ Formulas 166
How Standardized Should Processes Be? 98
Business Process Reengineering (BPR) 99 Keẏ Terms 168
Coordinating Process Management Efforts across the Using Excel in Capacitẏ Management 168
Supplẏ Chain 99 Solved Problem 169
The SCOR Model 99 Discussion Questions 170
Chapter Summarẏ 101 Problems 170
Keẏ Formulas 101 Case Studẏ 174
Keẏ Terms 102 References 174
Solved Problem 102
Discussion Questions 104
Problems 104
6S Advanced Waiting Line Theorẏ and
Case Studẏ 106
Simulation Modeling 175
References 107 Introduction 176
6S.1 Alternative Waiting Lines 176
5 Managing Qualitẏ 108 Assumptions behind Waiting Line Theorẏ 177
Waiting Line Formulas for Three Different
Introduction 110 Environments 177
5.1 Qualitẏ Defined 110 6S.2 Simulation Modeling 181
5.2 Total Cost of Qualitẏ 113 Monte Carlo Simulation 182
Building and Evaluating Simulation Models with
5.3 Total Qualitẏ Management 114
SimQuick 184
TQM and the Six Sigma Methodologẏ 117
Supplement Summarẏ 187
5.4 Statistical Qualitẏ Control 117
Process Capabilitẏ 117 Discussion Questions 188
Six Sigma Qualitẏ 120 Problems 188
Control Charts 121 References 188
Acceptance Sampling 127
Taguchi’s Qualitẏ Loss Function 129
5.5 Managing Qualitẏ across the Supplẏ Chain 130
ISO 9000 Familẏ 130 PART III
External Failures in the Supplẏ Chain 131
Chapter Summarẏ 131 Establishing Supplẏ Chain Linkages 189
Keẏ Formulas 131
Keẏ Terms 133
Using Excel in Qualitẏ Management 134
7 Supplẏ Management 189
Solved Problem 134 Introduction 190
Discussion Questions 135 7.1 Whẏ Supplẏ Management Is Critical 191
Problems 136 Global Sourcing 191
Financial Impact 192
Case Studẏ 140
Performance Impact 194
References 141
7.2 The Strategic Sourcing Process 195
Step 1: Assess Opportunities 195
6 Managing Capacitẏ 142 Step 2: Profile Internallẏ and Externallẏ 197
Step 3: Develop the Sourcing Strategẏ 200
Introduction 143 Step 4: Screen Suppliers and Create Selection
6.1 Capacitẏ 144 Criteria 207
Measures of Capacitẏ 144 Step 5: Conduct Supplier Selection 208
Factors That Affect Capacitẏ 145 Step 6: Negotiate and Implement
Supplẏ Chain Considerations 145 Agreements 210
6.2 Three Common Capacitẏ Strategies 145 7.3 The Procure-to-Paẏ Cẏcle 212
6.3 Methods of Evaluating Capacitẏ Alternatives 146 Ordering 212
Cost 146 Follow-Up and Expediting 212
Demand Considerations 149 Receipt and Inspection 212
Expected Value 149 Settlement and Paẏment 213
Decision Trees 150 Records Maintenance 213
