Verfügbarkeit: Operations management

Operations management: a supply chain approach

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Bibliographische Detailangaben
1. Verfasser:	Waller, Derek L. (VerfasserIn)
Format:	Buch
Sprache:	English
Veröffentlicht:	London [u.a.] Thomson 2003
Ausgabe:	2. ed.
Schlagworte:	Fertigungsplanung - Operations Management - Supply Chain Management Production management Fertigungsplanung Supply Chain Management Operations Management Operations Research Lehrbuch
Online-Zugang:	Inhaltsverzeichnis Inhaltsverzeichnis
Beschreibung:	1. ed. publ. 1999
Beschreibung:	XXIV, 899 S. graph. Darst.
ISBN:	1861528035

Internformat

MARC


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adam_text	Preface xvii Foreword xxi About the author xxiii Acknowledgements xxiv :%yQ}\|fcration strategic decisions 1. Positioning operations management and the supply chain 3 Din i (, oi KR vi io s i w (;r. ii :vr n Tin sri i i.v en i 3 Scope of operations management The integrated supply chain Linkage supply chain and operations Serving the client Importance of operations management ;l, ANSIFIC VI lON OF OI FR VI i ; SVSI I IS 5 Manufacturing industries Service industries Classification anomalies Not for profit organizations Economic classification of operations OI KRATIOVS ARF IN I I. R A l IO l. 9 Changes in the business environment Manufacturing firms Service firms Non profit organizations Products are international Foreign sales and country size KMl l.OYMKNT IN OI KR V1IONS 14 Manufacturing employment Manufacturing output Service industries European Union and Japan Developing regions Accounting changes IODKI. OF OPFR VIIONS 16 Models in management An operations model is a miniature supply chain Model economics Product added value I ROIM Cl l ITY 18 Resources in operations Productivity ratio Manufacturing Service firms Productivity changes Workweek and productivity i w (,i: ii i ( ti n n .s i oi i:i no s 20 Interface with marketing Working with the finance department Operations MSTl Als I I U ) II I o oi l .U Tin . 23 Concept of a system Sub optimal performance System performance in the business firm System performance in the supply chain I IX ll i l. )(; 26 Evolution of technology Operations and the 21st century Case study 1.1 Pangas 2. Strategy of organizations ? ? i kki : i i)Ri i: or(, i/ i ions 33 Ignore the environment Adapt enough to survive Grow by exploiting opportunities Profit, return on investment, and cash flow NOI IOR I ROHT OKCANIZATlONs 34 Consistency with financial resources Equitable services for all generations Sources and uses of funds should be matched Sustainability of the organization nil , si RAI l (,IC IM.AN 35 Timeframe Mission statement SWOT analysis Action plans to achieve objectives Quantitative components of the strategic plan sy kk(;y s i r ti:(A and opkryi ions 39 Strategic importance of operations and the supply chain Responsibilities of the firm Challenges for the firm Rl. l. WORLD COKI OKATK STU. TK(,K. OHJKCTIV I .S 42 Hewlett Packard British Airways IBM Case study 2.1 British Petroleum 3. Site selection 47 hf.i ininc, sitf si:i.i.c i io 47 Nature of the facility Strategy and operations Markets Strategic role of foreign factories Corporate towns Factors in site selection si i i i (, 50 Labour costs Availability of competent labour Productivity Trade unions Education level Local labour and plant technology Labour mix i iii ki r i.ih i. .o i)i i io s 55 Climate Culture Ethics Language l l K s 1 R[ ( \| l Rl 57 Family services Communication Environmental regulations Legal framework Transportation Rental costs Living costs Country stability :o l l ! (l ion 60 Land cost — Construction labour Land preparation Expansion possibilities — Zoning regulations Environmental regulations Material availability I U.I OKS I II VI IMI U.T C NI1 I LOW 61 Fluctuating exchange rates Repatriation of funds — Taxes on operations FINANUAI. Ml) 63 USA United Kingdom Germany I ROMNim OF RFSOI RCF.S 65 Raw materials Process and utility water Reliability of power supplies Suppliers or subcontractors (jr ANTI I A I l K Al I KOACIIKS TO Sll I. SFI.FOTION 65 Weighting the selection criteria Breakeven analysis Uncertainty and risk Centre of gravity Case study 3.1 Holger Co. 4. Quality management 80 OIAFITY CONCERNS 80 Quality issues for specific industries Quality is a strategic issue Quality and the supply chain Customers drive quality Net income and quality l)i:i IN1I ION OF Ql AUTY 81 International Organization for Standardization Specification Grade National origin TOTAI, OIALFFY l AN AGKMKN I 84 Top management Quality related training Manufacturing quality supply chain Service quality chain Communication Necessity for total quality management LLADIM; I KOI OM I S ()l Ol . l i (,i. ii. I 87 Deming Juran Crosby Feigenbaum costs ol 01 u.i n and non oi u.in 89 External faults Internal faults Preventive measures Detection and/or evaluation Percentage cost of quality — Costs are long term Costs and the level of quality design 01 i.i n ( o i koi. 93 Defective product Reliability or durability Reproducibility Quality control departments Inspection in quality control Traceability gi i i i i ki.i. vi ki rooi.s i) ilciinioil , 95 ABC analysis Activity based costing Benchmarking Brainstorming Failure mode, effect, and criticality analysis Frequency check sheets Hoshin Improvement monitoring charts Ishikawa diagram Just in time Kaizen, or continuous improvement Keep designs simple Overall equipment effectiveness Pareto analysis Phantom customer in services Pipeline map Poka yoke Process flow chart Quality circles Quality function deployment Reengineering — Scatter diagram Spider web Statistical quality control charts Taguchi methods INTLRNATION L ORO NTZATION I OK S T I) KI)IZATION M) ISO 9OOO 104 International Organization for Standardization Evolution of the ISO Quality Standard Basis of ISO 9000 standards Importance of certification Criticism of certification I .l ROI LXN I ()( ND ATION 1 OK JI LITY MAN U. I.MINT 107 Background Mission of the EFQM The European Quality Award programme and the EFQM model Award winners I III : IK ISLST I CTORY AWARDS 109 Background Evaluation criteria Timetable of award process Award categories and winners MALCOLM HAI.DRIGL NATIONAL OLM.ITY AWARD 109 Malcolm Baldrige and the award Background of the award Purpose of the quality award Award criteria Award winners KTIIICS AND QLAI.ITY 111 Correlation between quality and ethical situations Case study 4.1 Mitsubishi Case study 4.2 Wento Corp. 5. An environmental balance 119 i: ik() ik r i. issi is 119 A strategic component Drivers for an environmental balance Environment and the supply chain Population is the environmental trigger Financial implications Global concern Sustainable development No coordinated strategy SOI KCI .S )\| I.W IKOWIIA I l. l) l (,l 121 Air pollution Water pollution Solid waste pollution Noise pollution Natural pollution I KODI (.1 I.I! I .OCI.K nsls 126 Product conception Product design Purchasing Operations Testing Packaging Transportation Use Disposal Advantages of a lifecycle analysis Assumptions of a lifecycle analysis BATNEEC principle I Koni cr i i:k (,i ; 130 Package redesign Technology and package weight reduction Recycling ideas for packaging trwsi oki vno s1!si i: is 131 Road transportation Oil tankers Airplanes cosi hi. i:i i r w nsis iok i: iro ii, i i. covsidi.rations 133 Steel mill Toll roads Real world operating decisions Criticisms of cost benefit, and the EPA OR(, I/I (, 1 OR H 1RO IK I l l (,l, ll ! 135 Worker safety Organizational changes Compensation Internal cadre of environmentalists Research and development on environmental matters Compensate for environmentally risky endeavours Overseas environmental practices Gain environmental legitimacy and credibility Collaborate with environmentalists Prevent confrontation with governmental agencies Financing and accounting of resources Provide the means Human resources Trading pollution rights Develop and expand environmental cleanup services Procedures Environmental audits Public affairs Certification iso 14000 :i:ki ii h.ai ion skkiks 138 Background of the ISO 14000 series ISO 14001, Environmental management system specifications and guidance standard ISO 1410 12, Environmental auditing standard ISO 1421 24 Environmental labelling standard ISO 1431, Environmental performance evaluation standard ISO 1441 44 Life cycle assessment standard Relationship between ISO 14000 and ISO 9000 Case study 5.1 Imprint Case study 5.2 The business traveller gpJ^jDesign in operations management 6. Design of the product 147 i in i kMiii ( i 147 Products from sen ice organizations Products from manufacturing firms Standard products Customized products I Ki i.l I i I Is I Ki il II i I 149 Construction project Intangible projects Study projects i k ii i i i i.in i i 149 Development Introduction Growth Maturity Decline and death I I ( I l ( ll ( )( A l l l il )({ I I )\| \|c, 151 Petrochemicals Plastics Composites Computer aided design III M I I l l I I l)l I I II I Ki 11)1(1 152 Market growth Generation of new product ideas Research and development Product evaluation Feasibility studies Quality function deployment Robust design using Taguchi methods Value analysis Financial and market analysis Prototype Test marketing Concurrent engineering Commercialization Product success i ii miui i n i i;Ki nil i i i mi , 160 Flexibility driven by the customer Flexibility dictated by the process Case study 6.1 Four products 7. Process design and the operations network 166 III s\|(, (II Mil. l Ki)(\|sss s\|\|M 166 Manufacturing Services Correlation product and process design c i (inoi iini Ktxisss isiiM 168 Defining capacity Services Manufacturing Capacity under utilization and flexibility Capacity planning methods I K I l( I. l I I ,R I 11 ) 171 Definition Backward integration Forward integration Complete integration Benefits of integration Disadvantages of integration Japanese firms and keiretsu Disintegration Virtual companies viii ^^^^^^^^^^^^^^^^^HHHh ITO I TIO I I KOCKSS [)KSI(, 174 Mechanical aids Numerically controlled machines Robots Computer aided manufacturing Flexible manufacturing systems Automatic guided vehicles Automatic storage and retrieval systems Computer integrated manufacturing Virtual systems i ] OIUIA I IO IT.CIINOI.OCi l I III . \| RO( l.ss ¦.MEM 178 The Internet World Wide Web Web page TCP/IP Electronic data interchange Message standards in EDI Business use of information technology i :i.i .c i ko K. i o i ii .iu i. 182 Business transactions Business to business Business to consumer Lead time reduction using electronic commerce Business to consumer for catalogue shopping Business to consumer for online grocery shopping R I II l( I l, l I KI.Uf.KM.I : 187 Expert systems Neural networks Fuzzy logic oi i.K i io s i :t vork chart 189 Terms in the network chart Completed network chart m si i;ss I Roci ss Ri:i; f;i i.i;Ki (, 191 Definition Real world illustration Does BPR always work? Case study 7.1 Airbus Industries 8. Human resources in the system design 198 i in ; voRKi (, k iRo H ; T 198 People The past The present Overseas Salaried and non salaried IA . CI 1K r TIIKOR1STS 200 Scientific management Human relations JOB i)i;si(; 203 Job specialization Job rotation Job enlargement Job enrichment Empowerment Special considerations in job design All I \| \| ()K TOWARDS K IIM,OYK\|{S 206 Communication Working environment Company objectives Management style and decision making Financial and other tangible incentives WORK MKASI RKMKNT 208 Machine standard Labour standard Reasons for standards Criticism of labour standards Motion studies l.i k i (, [) I in. i .nim kii (:i: (.1 K I . 212 New products New hires Manufacturing and services The curve Mathematical representation Implications of the learning curve Real world illustrations I M ipi.i. n ci i i,i . 216 The business environment Stress and change Managing change Plant closure Case study 8.1 Lamson Session s plastics factory 9. Design of the facility layout 225 Dii i i (, i ii.i n i..u i i 225 Manufacturing Service organization Material and information flow Facility access The cost of facility layout Site selection and layout I. Woi I I i . l I u: ll Ul (; 226 Manufacturing steps Factors in the layout Functional layout Cellular layout Assembly line layout Flexible manufacturing system Layout and throughput Fluid flow Fixed position layouts Movement of materials KKTAII. I CII.ITlkS 233 Hypermarkets Supermarkets Grocery stores Petrol station convenience stores Specialty stores Boutiques Warehouse discount stores Departmeni stores Location of retail outlets Objectives of a retail outlet RKS I l RAN IS 235 Full service restaurant Self service restaurant Fast food restaurant AIRPORTS 237 Characteristics Hub and spoke type arrangement Technology — Environment hxc;i ki:ri (,, covsu.tinc;, or dfsigx offick 239 Cellular offices Open plan offices Hoteling The home office MF.TIIODS FOR FACILITY l.AVOl T 241 Two dimensional templates Load distance analysis Contact distance analysis Systematic layout planning Assembly line balancing Computer aids in facility layout Case study 9.1 lntermark ^ll^PIanning and organizing 10. Forecasting: The trigger in the supply chain 261 i I K 1. V II Kl. )l i OKI ( 1 l (, 261 Forecasting in operations Forecasting risks 1 I Ml. IK iKI/ONs l hilii ( ^ I I (, 262 Short range Medium range Long range Variations of the time horizon i ( o ( i u. i i )U i (lie i i i ii ].( s i i (, 263 Leading indicators Coincident indicators Lagging indicators l ( K()l ( o i IK \| ( I i iKs 264 Interest rates Exchange rates Unemployment level Demographic trends Government regulations Political climate Labour unrest Elasticity of demand iu.iu)i .(.o iAii : Ki.iuus 265 Competition Reputation for quality Price Market saturation Design Delivery times Disasters or i.iT n k ioki.c s i (, 267 Get to know the customer Sales bonus Understand the market Opinions of top management The salesforce composite Buyers expectations Delphi method C(I SI MIR SI RVI.Ys 270 Simple random sampling Systematic sampling Stratified sampling Cluster sampling Accuracy of consumer surveys Cost of surveys Survey response I I 11 : SKRIKS DATA l IORKCAS I l (, 271 Definition Components of a time series Components of interest for forecasting FORKCAS1 \| C MODI.I.S 273 Time series model Patterns in time series data Decomposing data AYKRAGK I ()IU;.C S IIN(; MODKI.N 276 Naive averaging Straight moving averages Weighted moving averages Considerations in the averaging models Model accuracy i: po t i i i. smoothing 278 Exponential model Alpha factor equal to zero Alpha factor equal to unity Considerations in using exponential smoothing Model accuracy Exponential profile Trend adjustment in exponential smoothing MM I11 I MM K kl I .! I ¦. .! IN l I I M I M Kll 281 Objective Least squares method Derivation of the linear equation Using the model Standard error of the estimate — Certainty and confidence limits — Coefficient of determination Coefficient of correlation Microsoft Excel and the regression functions ( l ¦ ¦ I I ll l i . s I \|N , NIM.INI K Rl i ,H I Ml IN 287 Causal relationships Scatter diagram Linear regression equation Prediction Certainty and confidence limits Coefficient of determination Coefficient of correlation s I W N I ! ! i I ( I v \|i Iiikii M I N i , 289 Seasonal models Calculation procedure Empirical approach Ml I I I I M KM (.Kl :sM( IN I ( IU S1 I IN( , 290 Two independent variables Multiple independent variables Microsoft Excel and multiple regression Standard error of the estimate Confidence intervals Coefficient of multiple determination NllN l INI k Kl (.KI.sMON 292 Exponential change Polynomial Curvilinear with a non integer value of the power of X Comparison of forecast models i i i km i hi 11ii 11iki i v i niiH i 296 Introduction Forecast error Mean error Absolute deviation Mean squared error Comparing mean average deviation and standard error Percentage error Which error method? ion i ri i oi i (iki i vi 299 Tracking signal Control charts I ( Ns\|l)l K I \|( Ns IN I OKI ( s I IN(, 301 Time horizons Collected data Coefficient of variation Market changes Models are dynamic Model accuracy Curvilinear or exponential models Selecting the best model Commercial forecasting tools and the supply chain Microsoft Excel for forecasting Case study 10.1 Wine sales 11. Inventory management Ml IN I N I OHV NI) Till NM I n ( II !N 322 Services Manufacturing Financial impact of good inventory management Dependency of inventory Inventories and the economy kl.XSON Hll i 11(11, DIM, INXINIdlO 327 Finished goods held by a distributor or retailer Finished goods held by a producer Raw materials Work in process inventory os i , nm)i :i i i:d w i i ii i i : i old i agkmia i 330 Inventory carrying costs Inventory ordering costs Inventory stockout costs Safety stocks Value added to inventory OK I) l; RING l)K:hli) v I OK 1 Dl.l l l)i: I OK i D i i i (nn 332 Inventory control Ordering in fixed order quantities Ordering at fixed time periods Bar codes Inventory levels and order quantities K o o ii(. okdi .r 01 vi rn modi .i.s 335 Model I: Basic EOQ Model II: Simultaneous supply and usage EOQ models with quantity discounts EOQ inventory models and management ounr.K i oin i s D m:r ici. i.i : ki.^ 343 Demand during lead time Order point Customer service levels Stockout risk Payoff tables for order point Distribution of demand during lead time Arbitrary methods for order points Safety stocks, EOQ, and electronic linkup I IXI.I) ORD1 .R I KRIOD SYSTKMS 347 Situation Model III: Economic order period Kl .Ql IRKMKNTS I Ok GOOD l KM ORY MANAGI.MKNT 348 Classification of inventory Electronic commerce and inventory The customer and the risks Case study 11.1 Fortnex 12. Operations and capacity planning 363 DKFINING PLANNING 363 Operations plan The supply chain and planning AGGRF.GATF PLANNING AND CAPACITY 365 Formulating an aggregate plan Capacity utilization and efficiency CAPACITY ADJISTMFNT TO IKF.T DFMAND 365 Hiring and termination of the permanent workforce Overtime Part time workers Temporary workers An extra shift Weekend work Machines Purchased materials Subcontractors Adjusting inventory levels Demands on backorder or backlog l()l)ll YING DKMANI) TO ACCOMMODATK CAPACITIKS 371 Reduction in product price Taxation and fees Advertising Cash payments Creating a new demand (, ;ki , i i : i»l. i ; cnoici .s i i i i c i [ ring 372 Level production Synchronized capacity with aggregate demand Hybrid of level and synchronized production ,(,ki , I i . i i. i (, i si inici.s 374 Restaurants Consulting, accounting, and design firms Hospitals and medical services Retail outlets Travel industry ] s it:i I koni c i ion sciikim i.k 375 Definition Rough cut capacity plan Balancing the master production schedules Rigidity of the MPS Updating of the MPS MPS planning horizon and the supply chain Demand management and the MPS Case study 12.1 Schultz Co. 13. Material requirements and enterprise resource planning 394 1 TKRI I. KI.OI IRI .MKNTS PLANNING 394 Overview Role of the master production schedule Product structure or bill of materials Inventory records file Output of the MRP Terms in materials requirement planning Yield rate LOT Si/I (, IN I ROIMC Tl( PLANNING 398 Units produced to order Units produced to stock Size of a production run Lot sizes of purchased materials Methods for calculating an optimum lot size l ANUAC II RING RKSOIRCK PLANNING 401 Evolution Structure Performance F.N TKKPRISK RKSOIRCK PLANNING 402 Basic structure Commercial systems Considerations in installing an ERP system 14. Operations scheduling 417 I 111; SCIIKIMLING ACTIVITY 417 Print shop Foundry Chocolate manufacture Railway company Business school Medical facility Food distribution centre TIIK GANTT CHART 418 Activities in a printing operation Time Jobs Planned schedule Update to operations manager Advantages of the Gantt chart OROKR SKQIKNCING 420 First come, first served Earliest due date Shortest processing time Longest processing time Last arrived, first processed Least slack time Critical ratio Least changeover cost Non quantifiable sequencing rules Criteria for comparing sequencing rules Preferred sequence method \|i i\|\| m ) V K! I i; 423 Two work centres Three work centres sm(, ii r ik riion or ion i i.o . vi io 424 Criteria Objective ki i I mi: 11101 01 si 111¦ iii mm. 425 Description Products are produced in fixed quantities Aggregate run out time i.i i ( ii u i, i 11 ( n ioi i. 426 Delivery schedule Assembly/lead time chart Progress at a given time im:us(iwi.i. s( 111 hi mm, 426 Scheduling in services First come, first served Appointment schedules Priority system Adjusting capacity Emergency services oMi i i r.u n si 1 n m id i i im, wo m:i11 :iii i im; m stkmn 427 Shortcomings of ERP/MRP systems Basis of APS systems APS systems in the business to business supply chain Case study 14.1 Speedy 15. Lean production and just in time 45 S conci .i ts 458 Lean production Just in time MRP push and just in time pull Analogy of push and pull The supply chain and integration of MRP and JIT WA1.YSIS ()l IR l)l IION l. IM Sll S isTI.M 461 Capacity Actual production Flow times Value added Reasons for low productivity in traditional production WAi.Ysis oi jrs r i 1 imi: i i i.i. s isi i:m 467 Actual production Flow times Value added bm.wcim; pkodi ction i ndi.k us i i i i ii; 469 Cycle time Cycle time analogous to Takt time kwhw 470 Definition Kanban forms Kanbans outside the work centre Kanbans and bar codes Determining the number of kanbans Priority work when using kanbans Kanban zones for large objects l F. iOKII .S IN l.KAN I kODICTION 474 High inventories Low inventories Analogy M i II l I si ill I \| l I ¦ s. l i s\| ( ,\| \| mi \| \|\| i iii i.ini mi 476 Producing in lots Implementation of SMED Average unit production cost Economic order quantity I A i l l I I _ ! II MI I I I IK I l I I sv 479 Principle Improving machine effectiveness i in i i i s ki i i s 480 Seiro (remove) Seiton (organize) — Seiso (keep clean) Seiketsu (standardize) Shitsute (respect the rules) I II I I i I 1 ) M / I K ¦¦ 481 Zero breakdowns Zero defects Zero delays Zero inventory Zero paper Zero accidents vi i i n 482 Quality at the source Inventories Well trained employees Purchasing Automated equipment Preventive maintenance Statistical quality control I1 s i i i i ii t m i ic i s 483 Fast food restaurants Delivery services Transportation Entertainment News emissions Risks i i i w i i i t ii ui (, 483 Case study 15.1 Fabrix 16. Purchasing and subcontracting 489 i in, ri k ii si (, (. n i n 489 Magnitude of purchasing operations Purchasing function Purchasing managers index pi i ( ii si t, is i i i i vi i i. 491 Sourcing Exchange rates Hedging Completely knocked down Barriers to international purchasing ( )! (, l/ II l (II I l l ( II s\| (, i)i:i K i mi is 495 Centralized purchasing Decentralized purchasing Hybrid of purchasing functions Organization chart Buying i 11 lies i i i Kin si i, n hi i i d 497 Questionable practices Sherman Act Clayton Act US Federal Trade Commission Act Robinson Patman Act Foreign Corrupt Practices Act Some European rules si IM I II. Ks 500 Supplier selection Global cost structure Checklist for supplier selection Number of suppliers ABC analysis of suppliers Standardizing supplied products STEPS IN I IIK I l RCrilASI (, PROCESS 503 Purchase requisition Request for quotation Out for bidding Reception of quotations Vendor selection — Purchase order — Supplier manufactures Shipping Inspection Payment Other types of purchase order Purchasing and the Internet VALl E ANALYSIS 505 Introduction Function of the product Considerations for a value analysis Steps in carrying out a value analysis — Technology changes JUST IN TIME PURCHASING 507 Long term relationships Proximity Quality Risk Responsibility Suppliers on the shop floor SUBCONTRACTING 507 Suppliers as subcontractors — Evaluating subcontractors Proportion of work performed by subcontractors Subcontractor client partnerships Outsourcing MAKE OR BUY 509 Criteria for making — Criteria for buying Breakeven analysis — New product Case study 16.1 Lockheed 17. Managing the integrated supply chain 521 THE SUPPLY CHAIN 521 Activities in supply chain management An integrated supply chain Financial flows Lead times Supply chain in two parts Distribution network Considerations in planning the supply chain Supply chain management is critical Global operations MODELLING THK SUPPLY CHAIN 526 Value added cells Supply chain costs Inventory in the supply chain PIPELINE MAPPING 529 Process description of a foundry Pipeline map Complexity Usefulness of a pipeline map Variety funnel DISTRIBUTION REQUIREMENTS PLANNING 533 Integrated distribution requirements plan Pull system Push system Hybrid of the pull and push system Alternative to distribution requirements planning DISTRIBUTION CENTRE 534 Function of the distribution centre Costs associated with the distribution centre Efficient management of the warehouse Packaging and palletization Considerations in selecting a distribution centre tr wsportation 538 Selection criteria — Transportation types Trucking costs The Internet and transportation RET ll. FOOD INDI STIO 543 Product variety Distribution Supply chain for fresh foods Dry and canned foods Combining warehouse INTERNATIONAL CONSIDERATIONS 545 Trade restrictions Shipping regulations Trading partners or(. izi r; nil ; si itlv chain einction 548 Functional organization Specific activities of the logistics manager Computerized network integration Outsourcing — Challenges for the logistics manager Definition of the logistics manager Case study 17.1 Cisco Systems 18. Project management 562 A PROJECT AND PROJECT MANAGEMENT 562 Complex projects with unknown elements Large projects with standard elements Intermediate projects — Small projects — Elements of a project Turnkey project Projects, operations, and the supply chain CONTRACTS IN A I ROJKCT 566 Types of contract — Fixed price or lump sum contract Guaranteed maximum with an incentive clause Cost plus contract Penalty clause Holdback provision PHASES OF A PROJECT 567 Work packages Proposal stage Design and conception Detailed design Construction Mechanical completion, startup, and handover phase PROJECT ORGANIZATION 568 Project manager Engineers Scheduler Purchasing personnel Controller Construction manager SCHEDULING AND CONTROLLING 569 Gantt charts Project cost curves Percent completion curve Dynamic monitoring tools NETWORK DIAGRAMS 573 Description — Terms in network diagrams Network diagram for a house construction Critical path method Program evaluation and review technique Advantages of network diagrams Limitations of network diagrams Computerized systems ACCK1.KK VI 1 ; (CRASHING;) A PROJECT 577 Concept Network diagrams and crashing Case study 18.1 Sana 19. Reliability and maintenance 595 RELIAHII.I I V 595 Poor product design Components and reliability in a series system Backup or parallel systems Failure rate Lifetime failure rate — Responsibility and the supply chain Poka yoke 1 AII.TRK MONK, Lll T.CT, AM) CRTTICAI.m ANALYSIS 602 Elements in the FMECA analysis Procedural steps in the FMECA analysis Real world pharmaceutical application MAINTENANCE 605 Poor maintenance Emergency maintenance Preventive maintenance Total productive maintenance Reliability centred maintenance RECOVERY EROM A EAIURK 608 Product redesign Just in time Subcontractor/ supplier network Crisis management Case study 19.1 A ski resort 20. Statistical quality control 616 ELEMENTS OE STATISTICAL Ql ALITY CONTROL 616 Introduction Lots, series, or batches Quality characteristics Origin of statistical quality control Goal of statistical quality control BASIC CONCKPTS Of STATISTICAL 1 ROCKSS CONTROL 618 Definition of statistical process control Variations in a process The control chart Control chart limits STATISTICAL PROCESS CONTROL IOK VI IRIIH IK CHARAC I ERISTICS 621 P chart C chart STATISTICAL PROCESS CONTROL FOR VARIABLE CHARACTERISTICS 623 X bar chart and a range chart Sample mean control chart — Sample range control chart CONSIDERATIONS IN STVl ISTIC.M. PROCESS CON I KOI. 624 No guarantees with SPC Effects of sigma limits Possibilities in the outcome of control charts Online statistical process control process c i bii.i n 627 Product design specifications and the process Process capability ratio Process capability index si sk, i 01 iii i 628 Introduction Product performance Process shift Philosophical extension of six sigma quality Six sigma black belt swiim.im; 631 Random sample Central limit theory Sampling techniques c( i i i nci . im.ws 633 Acceptance sampling Rejected lots Criteria for acceptance sampling Acceptance plan Operating characteristic curves Outcomes of an acceptance plan Perfect discriminating operating curve Practical operating characteristic curves Inspection and quality Producer and consumer risk Average outgoing quality Case study 20.1 Candy Co. 21. Waiting lines 655 V ITI C; LINKS IN PRACTICE 655 Retail stores Airline industry Road networks Medical centres Government owned or managed Sports and entertainment facilities Manufacturing Distribution Benefits of waiting lines to the operator Customers behaviour in waiting lines REASONS FOR WAI I 1N(, LINKS 657 Load and capacity Poor scheduling Badly designed systems System has reached saturation Irregular patterns Unknown service time SERVICE SYSTEMS IN WAITING LINKS 658 Arrivals in the system Variable service systems Fixed service systems Service rate Service time Waiting line in the service system is unlimited Waiting line in the service system is limited Queue discipline Channels Service phases SINCiLK CHANNEL, SINGLE PHASE OCEllING MODKI.S 661 Conditions Utilization of service system Variable service rate Constant service rate S1MII VI ION OK A WAITING; I.INK 662 Defining simulation Parameters in the waiting line Variables in the waiting line — Monte Carlo process Computer packages MANAGING TIIK WAITING I.INK 663 Need to analyze waiting line situations Good management policy Approaches to reduce waiting lines or to minimize their negative impact Case study 21.1 Motorway 22. Theory of constraints 677 CONCEPTS 677 Constraint Bottleneck Drum, buffer, and rope Focusing on constraints — Optimized production technology SYSTEM THROUGHPUT 679 Market demand Random occurrences BOTTLENECKS AND NON BO I TLKNECKS 679 Use of a non bottleneck is determined by other system constraints — Utilization and full employment of a resource are not synonymous An hour lost on a bottleneck is an hour lost on all the system — An hour saved on a non bottleneck is a mirage Bottlenecks govern both throughput and inventory accumulation TRANSFER BATCH, PROCESS BATCH, AND LOT SIZE 683 Transfer batch Process batch Savings in inventory holding cost Reduction in lead times Lot sizes should be variable and not fixed SCHEDULING AND CONSTRAINTS 685 Lead times should not be considered fixed Production of two products at three work posts Production of three products at three work posts NON MANUFACTURING SYSTEMS 688 Project management New product development Case study 22.1 Compressor units 23. Decision making and risk 697 THE ELEMENT OF RISK 697 Wrong decisions System Trade off Priority recognition MAGNITUDE OF THE DECISION MAKING PROCESS 700 Intuition Quick and dirty Computations Model building Task force TMK DKCISION PROCESS 701 What is the reason for requiring a decision? Define the current and future situation Define objectives Develop alternatives Analyze alternatives Select the best alternative Firm up a plan for implementation Monitor results II IK KNVIROWIKNT FOR DKCISION1 MAKING 703 Decision making under certainty Decision making under risk Decision making under uncertainty DKCISION THEORY 703 Characteristics Stages Decision making under certainty Decision making under uncertainty Decision making under risk Decision trees Expected value of perfect information — What if and sensitivity analysis PAYOFF TABLES 707 Method Analysis MARGINAL ANALYSIS 707 Probability relationship Normal probability distributions and marginal analysis WHEN EXPECTED VALUES ARE NOT THE DECISION MAKING CRITERIA 708 Utility Gambling Managers with different personalities Insurance COST BENEFIT ANALYSIS 711 Governments Case study 23.1 Grivel Foundry 24. Linear programming 732 THE LINEAR PROGRAMMING TOOL 732 Background Applications Methods for linear programming RESTRICTIONS ON LINEAR PROGRAMMING 734 Resource availability Design specifications Legal requirements Quantitative with limitations FORMULATING A LINEAR PROGRAMME 735 Objective Constraints Mathematical function Microsoft Solver LINEAR PROGRAMMING WITH ONLY TWO VARIABLES 736 Feasible area and boundary limits Iso profit line Surplus resources Sensitivity Limits of two variable linear programmes l.INHAR PROGRAMMING WITH MORK THAN TWO VARIABLES 737 Transportation networks Blending or mixing Assignment method Personnel scheduling Case study 24.1 Easthope 25. Financial analysis 753 I RODICT PRICING 753 Profit motive Product price and the operations manager Market price Catalogue price Price equal to cost plus margin Price based on target cost Exchange rates VARIABI.K COSTS 756 Definition Raw material cost Direct labour cost Factory overhead Value of inventory F1XF.D COSTS 758 Definition Depreciation Calculation of depreciation FINANCIAL TRKATMKNT ()1 FIXKI) ASSKTS 759 Payback method Net present value Internal rate of return TRADITIONAL COST ACCOUNTING 760 Assigning costs Production overhead Under or over absorption of overhead ACTIVITY BASKD COSTING 761 Operating changes Principle of activity based costing Non value added Depreciation charges Customer focus Service industries BRKAKEVKN ANALYSIS 763 Contribution margin Terms and definitions Graphical analysis Assumptions in breakeven analysis SHORT RUN PRODUCTION COSTS 764 Increasing labour Total production output Average production Marginal production Total costs Average and marginal costs Diminishing marginal returns LONG Rl N PRODUCTION COSTS 768 Long run cost curves Flexibility Economies of scale and its benefits Economies of scale and its disadvantages Diseconomies of scale Constant economy of scale Case study 25.1 Manning 26. Auditing the operations and supply chain 791 !VI KllDI C I l() 791 The operations audit Auditor Starting point Analytical tools Audit checklists Cl sTOMK.R S I ISTACTION 793 Customer analysis Customer satisfaction index ci si ( ikk si .in ici: [. l i:i. 796 Qualitative measurement of service level Quantitative measurement of service level i k.vioky i (iiAii: i 798 Quantitative measurements of inventory Qualitative evaluation of why inventory is being held Company performance and inventory 1:11 icii.nc i M 01 Mill ii . si m .MKvrs 802 Manufacturing Services WOUKIN i K. YIKO ME T 805 Management Personnel involvement Documentation Physical environment I in. si iM i.v c:i¦ i 807 Financial measurements benchmarking 809 Operating level European firms Petroleum industry Guidelines to benchmarking Case study 26.1 Berger Co. Case study 26.2 Cardoso 27. Statistical concepts 827 THE ROI.K OK STATISTICS 827 Areas of use No guarantee Black belt in statistics Microsoft Excel COMMON TERMS 828 Data characteristics Raw data Data array Class Discrete data Continuous data A statistic Descriptive statistics Inferential statistics Population Parameter Sample Random sample Sampling with replacement Sampling from an infinite population Distribution Frequency distribution Pie chart Histogram Bar chart Polygon SIMMATION Rll.KS 830 Mean value Addition of two variables Difference of two variables Constant multiplied by a variable Constant summed n times Summation of a random variable around the mean PROBABli.ll V 831 Subjective probabilities — Relative frequency probability Classical probability rules — Application of probability rules to relative frequency occurrences ckn 1 rai. tk i)I : c:v 832 Mean — Median — Mode — Midrange Geometric mean IMSI KKSION 834 Range Variance Standard deviation Deviations about the mean — Bienayme Chebyshev rule — Fractiles K TO K TI. I. DIS i RIHI TION 837 Growth Decline Increase to a maximum Natural logarithm NORMAL DISTRIBITION 839 Definition — Area under the normal distribution Mathematical expression Transformation formula — Normal distribution and risk Real world BINOMIAL DISTRIBl i ION 840 Characteristics Validity Deviations Mathematical expression Dissecting the binomial equation Mean value of the binomial distribution Standard deviation of the binomial distribution Binomial distribution situations Approximating to the normal distribution I ()IW) \|)\|s I KMM i l() 842 Characteristics Requirements Mathematical expression Poisson distribution as an approximation of the binomial distribution NT! l)i: I t IMMklBI I KIN 842 Characteristics Degrees of freedom Using a t distribution BKTA IMSTRIIH TIO 843 Definition Network diagrams Appendix 852 TKCIIXOI.OCilC.AI. niNCOVHRIKS, l KNTIONS, AND i)i: i.i.oi ii; i s Glossary 858 Index 884
adam_txt	Preface xvii Foreword xxi About the author xxiii Acknowledgements xxiv :%yQ}\|fcration\ strategic decisions 1. Positioning operations management and the supply chain 3 Din\i\(, oi'KR vi'io\s \i w\(;r.\ii :vr \\n Tin sri'i'i.v en \i\ 3 Scope of operations management The integrated supply chain Linkage supply chain and operations Serving the client Importance of operations management ;l, ANSIFIC VI'lON OF OI'FR VI i\ ; SVSI I \IS 5 Manufacturing industries Service industries Classification anomalies Not for profit organizations Economic classification of operations OI'KRATIOVS ARF IN I I. R\ A l'IO\ \l. 9 Changes in the business environment Manufacturing firms Service firms Non profit organizations Products are international Foreign sales and country size KMl'l.OYMKNT IN OI'KR V1IONS 14 Manufacturing employment Manufacturing output Service industries European Union and Japan Developing regions Accounting changes \IODKI. OF OPFR VIIONS 16 Models in management An operations model is a miniature supply chain Model economics Product added value I'ROIM Cl l\ ITY 18 Resources in operations Productivity ratio Manufacturing Service firms Productivity changes Workweek and productivity \i w \(,i:\ii \ i' \( ti\ n n .s i\ oi'i:i \no\s 20 Interface with marketing Working with the finance department Operations MSTl Als \I'I'U )\ II I o oi'l '.U \Tin\ . 23 Concept of a system Sub optimal performance System performance in the business firm System performance in the supply chain I IX ll\i l. )(;\ 26 Evolution of technology Operations and the 21st century Case study 1.1 Pangas 2. Strategy of organizations ? ? \i \kki : i i)Ri\ i:\ or(, \\i/ \i ions 33 Ignore the environment Adapt enough to survive Grow by exploiting opportunities Profit, return on investment, and cash flow NOI IOR I'ROHT OKCANIZATlONs 34 Consistency with financial resources Equitable services for all generations Sources and uses of funds should be matched Sustainability of the organization nil , si RAI l (,IC IM.AN 35 Timeframe Mission statement SWOT analysis Action plans to achieve objectives Quantitative components of the strategic plan sy\kk(;y s i r\ti:(A and opkryi ions 39 Strategic importance of operations and the supply chain Responsibilities of the firm Challenges for the firm Rl. \l. WORLD COKI'OKATK STU.\TK(,K. OHJKCTIV I '.S 42 Hewlett Packard British Airways IBM Case study 2.1 British Petroleum 3. Site selection 47 hf.i ininc, sitf si:i.i.c i io\ 47 Nature of the facility Strategy and operations Markets Strategic role of foreign factories Corporate towns Factors in site selection si \i i i\(, 50 Labour costs Availability of competent labour Productivity Trade unions Education level Local labour and plant technology Labour mix i\iii ki \ r i.ih \i. .o\i)i i io\s 55 Climate Culture Ethics Language l\l K \s 1 R[ ( '\|'l Rl 57 Family services Communication Environmental regulations Legal framework Transportation Rental costs Living costs Country stability :o\ l l ! (l ion 60 Land cost — Construction labour Land preparation Expansion possibilities — Zoning regulations Environmental regulations Material availability I U.I OKS I II VI IMI'U.T C \NI1 I LOW 61 Fluctuating exchange rates Repatriation of funds — Taxes on operations FINANUAI. Ml) 63 USA United Kingdom Germany I'ROMNim OF RFSOI'RCF.S 65 Raw materials Process and utility water Reliability of power supplies Suppliers or subcontractors (jr ANTI I A I l\ K Al'I'KOACIIKS TO Sll I. SFI.FOTION 65 Weighting the selection criteria Breakeven analysis Uncertainty and risk Centre of gravity Case study 3.1 Holger Co. 4. Quality management 80 OIAFITY CONCERNS 80 Quality issues for specific industries Quality is a strategic issue Quality and the supply chain Customers drive quality Net income and quality l)i:i IN1I ION OF Ql'AUTY 81 International Organization for Standardization Specification Grade National origin TOTAI, OIALFFY \l AN AGKMKN I 84 Top management Quality related training Manufacturing quality supply chain Service quality chain Communication Necessity for total quality management LLADIM; I'KOI'OM \ I S ()l Ol \\.\l\ \i \\ \(,i.\ii.\ I 87 Deming Juran Crosby Feigenbaum costs ol 01 u.i n and non oi u.in 89 External faults Internal faults Preventive measures Detection and/or evaluation Percentage cost of quality — Costs are long term Costs and the level of quality design 01 \i.i n ( o\ i koi. 93 Defective product Reliability or durability Reproducibility Quality control departments Inspection in quality control Traceability gi \i i i 'i ki.i. vi ki rooi.s \\i) ilciinioil , 95 ABC analysis Activity based costing Benchmarking Brainstorming Failure mode, effect, and criticality analysis Frequency check sheets Hoshin Improvement monitoring charts Ishikawa diagram Just in time Kaizen, or continuous improvement Keep designs simple Overall equipment effectiveness Pareto analysis Phantom customer in services Pipeline map Poka yoke Process flow chart Quality circles Quality function deployment Reengineering — Scatter diagram Spider web Statistical quality control charts Taguchi methods INTLRNATION \L ORO \NTZATION I OK S T\\I)\KI)IZATION \M) ISO 9OOO 104 International Organization for Standardization Evolution of the ISO Quality Standard Basis of ISO 9000 standards Importance of certification Criticism of certification I'.l ROI'LXN I ()( ND ATION 1 OK JI \LITY MAN U. I.MINT 107 Background Mission of the EFQM The European Quality Award programme and the EFQM model Award winners I III : IK ISLST I \CTORY AWARDS 109 Background Evaluation criteria Timetable of award process Award categories and winners MALCOLM HAI.DRIGL NATIONAL OLM.ITY AWARD 109 Malcolm Baldrige and the award Background of the award Purpose of the quality award Award criteria Award winners KTIIICS AND QLAI.ITY 111 Correlation between quality and ethical situations Case study 4.1 Mitsubishi Case study 4.2 Wento Corp. 5. An environmental balance 119 i:\\ ik()\\ik\ r\i. issi is 119 A strategic component Drivers for an environmental balance Environment and the supply chain Population is the environmental trigger Financial implications Global concern Sustainable development No coordinated strategy SOI KCI .S )\| I.W IKOWIIA I \l. l)\\l \(,l 121 Air pollution Water pollution Solid waste pollution Noise pollution Natural pollution I'KODI (.1 I.I! I .OCI.K \\ \nsls 126 Product conception Product design Purchasing Operations Testing Packaging Transportation Use Disposal Advantages of a lifecycle analysis Assumptions of a lifecycle analysis BATNEEC principle I'Koni cr i'\i:k\(,i\ ; 130 Package redesign Technology and package weight reduction Recycling ideas for packaging trwsi'oki vno\ s1!si i:\is 131 Road transportation Oil tankers Airplanes cosi hi.\i:i i r w \nsis iok i:\\iro\\ii,\ i \i. covsidi.rations 133 Steel mill Toll roads Real world operating decisions Criticisms of cost benefit, and the EPA OR(,\\I/I\(, 1 OR H\\1RO\\IK\ I \l \l \\ \(,l,\ll \ ! 135 Worker safety Organizational changes Compensation Internal cadre of environmentalists Research and development on environmental matters Compensate for environmentally risky endeavours Overseas environmental practices Gain environmental legitimacy and credibility Collaborate with environmentalists Prevent confrontation with governmental agencies Financing and accounting of resources Provide the means Human resources Trading pollution rights Develop and expand environmental cleanup services Procedures Environmental audits Public affairs Certification iso 14000 :i:ki ii h.ai ion skkiks 138 Background of the ISO 14000 series ISO 14001, Environmental management system specifications and guidance standard ISO 1410 12, Environmental auditing standard ISO 1421 24 Environmental labelling standard ISO 1431, Environmental performance evaluation standard ISO 1441 44 Life cycle assessment standard Relationship between ISO 14000 and ISO 9000 Case study 5.1 Imprint Case study 5.2 The business traveller gpJ^jDesign in operations management 6. Design of the product 147 i in i'kMiii ( i 147 Products from sen ice organizations Products from manufacturing firms Standard products Customized products \ I'Ki i.l I i I Is \ I'Ki il II i I 149 Construction project Intangible projects Study projects i'k ii i i i i.in \ i i 149 Development Introduction Growth Maturity Decline and death I I ( I l\( ll ( )( A l\ l'l il )({ I I )\| \|c,\ 151 Petrochemicals Plastics Composites Computer aided design III M I I l'\l I \ I l)l I I II I'Ki 11)1(1 152 Market growth Generation of new product ideas Research and development Product evaluation Feasibility studies Quality function deployment Robust design using Taguchi methods Value analysis Financial and market analysis Prototype Test marketing Concurrent engineering Commercialization Product success i ii miui i n i\ i;Ki nil i i i mi ,\ 160 Flexibility driven by the customer Flexibility dictated by the process Case study 6.1 Four products 7. Process design and the operations network 166 III s\|(,\ (II Mil. l'Ki)(\|sss\s\|\|M 166 Manufacturing Services Correlation product and process design c\i'\(inoi iini'Ktxisss'isiiM 168 Defining capacity Services Manufacturing Capacity under utilization and flexibility Capacity planning methods \ I K I l( \I. l\ I I ,R \ I 11 )\ 171 Definition Backward integration Forward integration Complete integration Benefits of integration Disadvantages of integration Japanese firms and keiretsu Disintegration Virtual companies viii ^^^^^^^^^^^^^^^^^HHHh \ITO\I\TIO\ I\ I'KOCKSS [)KSI(,\ 174 Mechanical aids Numerically controlled machines Robots Computer aided manufacturing Flexible manufacturing systems Automatic guided vehicles Automatic storage and retrieval systems Computer integrated manufacturing Virtual systems i\] OIUIA I IO\ IT.CIINOI.OCi l\ I III . \|'RO( l.ss ¦.MEM 178 The Internet World Wide Web Web page TCP/IP Electronic data interchange Message standards in EDI Business use of information technology i :i.i .c i ko\K. i o\i\ii .iu i. 182 Business transactions Business to business Business to consumer Lead time reduction using electronic commerce Business to consumer for catalogue shopping Business to consumer for online grocery shopping \R I II l( I \l, l\ I KI.Uf.KM.I : 187 Expert systems Neural networks Fuzzy logic oi'i.K\i io\s \i :t\vork chart 189 Terms in the network chart Completed network chart m si\i;ss I'Roci ss Ri:i;\f;i\i.i;Ki\(, 191 Definition Real world illustration Does BPR always work? Case study 7.1 Airbus Industries 8. Human resources in the system design 198 i in ; \voRKi\(, k\\ iRo\\H ;\T 198 People The past The present Overseas Salaried and non salaried \IA\.\CI \1K\ r TIIKOR1STS 200 Scientific management Human relations JOB i)i;si(;\ 203 Job specialization Job rotation Job enlargement Job enrichment Empowerment Special considerations in job design All I \| \| ()K TOWARDS K\IIM,OYK\|{S 206 Communication Working environment Company objectives Management style and decision making Financial and other tangible incentives WORK MKASI RKMKNT 208 Machine standard Labour standard Reasons for standards Criticism of labour standards Motion studies l.i \k\i\(, \\[) I in. i .nim kii \(:i: (.1 K\ I . 212 New products New hires Manufacturing and services The curve Mathematical representation Implications of the learning curve Real world illustrations I'M ipi.i. \\n ci i \\i,i . 216 The business environment Stress and change Managing change Plant closure Case study 8.1 Lamson Session s plastics factory 9. Design of the facility layout 225 Dii i\i\(, i \ ii.i n i.u i i 225 Manufacturing Service organization Material and information flow Facility access The cost of facility layout Site selection and layout I. Woi I I\ \i .\\l I u: ll Ul\(; 226 Manufacturing steps Factors in the layout Functional layout Cellular layout Assembly line layout Flexible manufacturing system Layout and throughput Fluid flow Fixed position layouts Movement of materials KKTAII. I \CII.ITlkS 233 Hypermarkets Supermarkets Grocery stores Petrol station convenience stores Specialty stores Boutiques Warehouse discount stores Departmeni stores Location of retail outlets Objectives of a retail outlet RKS'I \l RAN IS 235 Full service restaurant Self service restaurant Fast food restaurant AIRPORTS 237 Characteristics Hub and spoke type arrangement Technology — Environment hxc;i\ki:ri\(,, covsu.tinc;, or dfsigx offick 239 Cellular offices Open plan offices Hoteling The home office MF.TIIODS FOR FACILITY l.AVOl T 241 Two dimensional templates Load distance analysis Contact distance analysis Systematic layout planning Assembly line balancing Computer aids in facility layout Case study 9.1 lntermark ^ll^PIanning and organizing 10. Forecasting: The trigger in the supply chain 261 i \ \ I K \1. V\ II Kl. )l i OKI ( \ 1 l\(, 261 Forecasting in operations Forecasting risks 1 I Ml. IK iKI/ONs l\ hilii ( \^ I I \ (, 262 Short range Medium range Long range Variations of the time horizon i ( o\( \i u. i\i )U \ i (lie i\ i i ii ].( \s i i\(, 263 Leading indicators Coincident indicators Lagging indicators \l \( K()l ( o\i \IK \| \( I i iKs 264 Interest rates Exchange rates Unemployment level Demographic trends Government regulations Political climate Labour unrest Elasticity of demand \iu.iu)i'.(.o\iAii : Ki.iuus 265 Competition Reputation for quality Price Market saturation Design Delivery times Disasters or \i.iT\n\ k ioki.c\s i \\(, 267 Get to know the customer Sales bonus Understand the market Opinions of top management The salesforce composite Buyers' expectations Delphi method C(I\SI MIR SI RVI.Ys 270 Simple random sampling Systematic sampling Stratified sampling Cluster sampling Accuracy of consumer surveys Cost of surveys Survey response I" I \ 11 : SKRIKS DATA l\ IORKCAS I l\(, 271 Definition Components of a time series Components of interest for forecasting FORKCAS1 \|\C MODI.I.S 273 Time series model Patterns in time series data Decomposing data AYKRAGK I ()IU;.C\S'IIN(; MODKI.N 276 Naive averaging Straight moving averages Weighted moving averages Considerations in the averaging models Model accuracy i:\po\t\i i \i. smoothing 278 Exponential model Alpha factor equal to zero Alpha factor equal to unity Considerations in using exponential smoothing Model accuracy Exponential profile Trend adjustment in exponential smoothing MM I11 I MM \K kl I .! I ¦. .! IN l\ \ I I M I M Kll 281 Objective Least squares method Derivation of the linear equation Using the model Standard error of the estimate — Certainty and confidence limits — Coefficient of determination Coefficient of correlation Microsoft Excel and the regression functions ( \l ¦ '¦ I I ' ll l i . \s I \|N , \NIM.INI \K Rl i ,H I Ml IN 287 Causal relationships Scatter diagram Linear regression equation Prediction Certainty and confidence limits Coefficient of determination Coefficient of correlation s I W ' N \ I ! ! i I ( I v \\\|i Iiikii \ M I N i , 289 Seasonal models Calculation procedure Empirical approach Ml I I I I'M KM (.Kl :sM( IN I ( IU S1 I IN( , 290 Two independent variables Multiple independent variables Microsoft Excel and multiple regression Standard error of the estimate Confidence intervals Coefficient of multiple determination NllN l INI \k Kl (.KI.sMON 292 Exponential change Polynomial Curvilinear with a non integer value of the power of X Comparison of forecast models \i i i km i hi 11ii 11iki i \v i \niiH i 296 Introduction Forecast error Mean error Absolute deviation Mean squared error Comparing mean average deviation and standard error Percentage error Which error method? ion i ri i oi \ i (iki i \vi 299 Tracking signal Control charts I ( Ns\|l)l K \ I \|( Ns IN I OKI ( \s I IN(, 301 Time horizons Collected data Coefficient of variation Market changes Models are dynamic Model accuracy Curvilinear or exponential models Selecting the best model Commercial forecasting tools and the supply chain Microsoft Excel for forecasting Case study 10.1 Wine sales 11. Inventory management Ml IN\ I N I OHV \NI) Till NM'I'n ( II \!N 322 Services Manufacturing Financial impact of good inventory management Dependency of inventory Inventories and the economy kl.XSON Hll i 11(11, DIM, INXINIdlO 327 Finished goods held by a distributor or retailer Finished goods held by a producer Raw materials Work in process inventory os i , \nm)i :i \ i i:d w i i ii i\\ i :\ i old \i \\agkmia i 330 Inventory carrying costs Inventory ordering costs Inventory stockout costs Safety stocks Value added to inventory OK I) l; RING l)K:hli)\v I OK 1\ Dl.l'l \ l)i:\ I OK\i \\D i\\ i \ i (nn 332 Inventory control Ordering in fixed order quantities Ordering at fixed time periods Bar codes Inventory levels and order quantities K o\o\ii(. okdi .r 01 \vi rn modi .i.s 335 Model I: Basic EOQ Model II: Simultaneous supply and usage EOQ models with quantity discounts EOQ inventory models and management ounr.K i'oin i s \\D m:r\ ici. i.i :\ ki.^ 343 Demand during lead time Order point Customer service levels Stockout risk Payoff tables for order point Distribution of demand during lead time Arbitrary methods for order points Safety stocks, EOQ, and electronic linkup I IXI.I) ORD1 .R I'KRIOD SYSTKMS 347 Situation Model III: Economic order period Kl'.Ql IRKMKNTS I Ok GOOD l\\ KM ORY MANAGI.MKNT 348 Classification of inventory Electronic commerce and inventory The customer and the risks Case study 11.1 Fortnex 12. Operations and capacity planning 363 DKFINING PLANNING 363 Operations plan The supply chain and planning AGGRF.GATF PLANNING AND CAPACITY 365 Formulating an aggregate plan Capacity utilization and efficiency CAPACITY ADJISTMFNT TO \IKF.T DFMAND 365 Hiring and termination of the permanent workforce Overtime Part time workers Temporary workers An extra shift Weekend work Machines Purchased materials Subcontractors Adjusting inventory levels Demands on backorder or backlog \l()l)ll YING DKMANI) TO ACCOMMODATK CAPACITIKS 371 Reduction in product price Taxation and fees Advertising Cash payments Creating a new demand \(, ;ki , \i i : i»l. \\\i\ ; cnoici'.s i\ \i \\i i \c i'[ ring 372 Level production Synchronized capacity with aggregate demand Hybrid of level and synchronized production \ ,(,ki , \ I i . i'i.\\\i\(, i\ si inici.s 374 Restaurants Consulting, accounting, and design firms Hospitals and medical services Retail outlets Travel industry \] \s it:i I'koni c i ion sciikim i.k 375 Definition Rough cut capacity plan Balancing the master production schedules Rigidity of the MPS Updating of the MPS MPS planning horizon and the supply chain Demand management and the MPS Case study 12.1 Schultz Co. 13. Material requirements and enterprise resource planning 394 \1\TKRI\I. KI.OI IRI '.MKNTS PLANNING 394 Overview Role of the master production schedule Product structure or bill of materials Inventory records file Output of the MRP Terms in materials requirement planning Yield rate LOT Si/I\(, IN I'ROIMC Tl( \ PLANNING 398 Units produced to order Units produced to stock Size of a production run Lot sizes of purchased materials Methods for calculating an optimum lot size \l ANUAC II RING RKSOIRCK PLANNING 401 Evolution Structure Performance F.N TKKPRISK RKSOIRCK PLANNING 402 Basic structure Commercial systems Considerations in installing an ERP system 14. Operations scheduling 417 I 111; SCIIKIMLING ACTIVITY 417 Print shop Foundry Chocolate manufacture Railway company Business school Medical facility Food distribution centre TIIK GANTT CHART 418 Activities in a printing operation Time Jobs Planned schedule Update to operations manager Advantages of the Gantt chart OROKR SKQIKNCING 420 First come, first served Earliest due date Shortest processing time Longest processing time Last arrived, first processed Least slack time Critical ratio Least changeover cost Non quantifiable sequencing rules Criteria for comparing sequencing rules Preferred sequence method \|i i\|\|\m )\V K! I i; 423 Two work centres Three work centres \sm(,\\ii\ r \ik riion or ion \i i.o . vi io\ 424 Criteria Objective ki \ i I mi: 11101 01 si 111¦ iii mm. 425 Description Products are produced in fixed quantities Aggregate run out time i.i\ i ( ii u \i, \\ i 11 ( n\ ioi i. 426 Delivery schedule Assembly/lead time chart Progress at a given time im:us(iwi.i. s( 111 hi mm, 426 Scheduling in services First come, first served Appointment schedules Priority system Adjusting capacity Emergency services oMi'i 'i r.u n \si 1 \n\ \m id i'i \\\im, wo m:i11 :iii i im; m stkmn 427 Shortcomings of ERP/MRP systems Basis of APS systems APS systems in the business to business supply chain Case study 14.1 Speedy 15. Lean production and just in time 45 S conci .i'ts 458 Lean production Just in time MRP 'push' and just in time 'pull' Analogy of push and pull The supply chain and integration of MRP and JIT WA1.YSIS ()l \ IR \l)l IION \l. IM Sll S'isTI.M 461 Capacity Actual production Flow times Value added Reasons for low productivity in traditional production WAi.Ysis oi ' \ jrs r i\ 1 imi: i'i i.i. s'isi i:m 467 Actual production Flow times Value added bm.wcim; pkodi ction i ndi.k us i i\ i i\ii; 469 Cycle time Cycle time analogous to 'Takt' time kwhw 470 Definition Kanban forms Kanbans outside the work centre Kanbans and bar codes Determining the number of kanbans Priority work when using kanbans Kanban zones for large objects l\\ F.\ iOKII .S IN l.KAN I'kODICTION 474 High inventories Low inventories Analogy M \i II l\ I si ill' I \|\l I ¦ s. \\l i s\|\( ,\| \| mi \\| \|\| i\iii\\i.ini mi 476 Producing in lots Implementation of SMED Average unit production cost Economic order quantity I A i l \l I I '_ ! II'MI \ I I I IK I l\ I \ I sv 479 Principle Improving machine effectiveness i in i i\ i s ki i i s 480 Seiro (remove) Seiton (organize) — Seiso (keep clean) Seiketsu (standardize) Shitsute (respect the rules) I II I I i\ I \\1 ) "M\" / I K '¦¦ 481 Zero breakdowns Zero defects Zero delays Zero inventory Zero paper 'Zero accidents' vi \i i n 482 Quality at the source Inventories Well trained employees Purchasing Automated equipment Preventive maintenance Statistical quality control I1 s i i\ i i\ii t\ m i \ ic i s 483 Fast food restaurants Delivery services Transportation Entertainment News emissions Risks i\ i i w \i\\i i \t ii ui\(, 483 Case study 15.1 Fabrix 16. Purchasing and subcontracting 489 i in, ri k ii \si\(, \(. n\ i n 489 Magnitude of purchasing operations Purchasing function Purchasing managers' index pi i ( ii \si\t, is i\ i i i \ vi i \ \i. 491 Sourcing Exchange rates Hedging Completely knocked down Barriers to international purchasing ( )! (, \\l/ \ II' l\ (II I'l l ( II \s\|\(, i)i:i'\K'i mi \ is 495 Centralized purchasing Decentralized purchasing Hybrid of purchasing functions Organization chart Buying i 11 lies i\ i'i Kin \si\i, \\n hi "i i\d 497 Questionable practices Sherman Act Clayton Act US Federal Trade Commission Act Robinson Patman Act Foreign Corrupt Practices Act Some European rules si IM'I II. Ks 500 Supplier selection Global cost structure Checklist for supplier selection Number of suppliers ABC analysis of suppliers Standardizing supplied products STEPS IN I IIK I'l"RCrilASI\(, PROCESS 503 Purchase requisition Request for quotation Out for bidding Reception of quotations Vendor selection — Purchase order — Supplier manufactures Shipping Inspection Payment Other types of purchase order Purchasing and the Internet VALl E ANALYSIS 505 Introduction Function of the product Considerations for a value analysis Steps in carrying out a value analysis — Technology changes JUST IN TIME PURCHASING 507 Long term relationships Proximity Quality Risk Responsibility Suppliers on the shop floor SUBCONTRACTING 507 Suppliers as subcontractors — Evaluating subcontractors Proportion of work performed by subcontractors Subcontractor client partnerships Outsourcing MAKE OR BUY 509 Criteria for making — Criteria for buying Breakeven analysis — New product Case study 16.1 Lockheed 17. Managing the integrated supply chain 521 THE SUPPLY CHAIN 521 Activities in supply chain management An integrated supply chain Financial flows Lead times Supply chain in two parts Distribution network Considerations in planning the supply chain Supply chain management is critical Global operations MODELLING THK SUPPLY CHAIN 526 Value added cells Supply chain costs Inventory in the supply chain PIPELINE MAPPING 529 Process description of a foundry Pipeline map Complexity Usefulness of a pipeline map Variety funnel DISTRIBUTION REQUIREMENTS PLANNING 533 Integrated distribution requirements plan Pull system Push system Hybrid of the pull and push system Alternative to distribution requirements planning DISTRIBUTION CENTRE 534 Function of the distribution centre Costs associated with the distribution centre Efficient management of the warehouse Packaging and palletization Considerations in selecting a distribution centre tr wsportation 538 Selection criteria — Transportation types Trucking costs The Internet and transportation RET\ll. FOOD INDI'STIO 543 Product variety Distribution Supply chain for fresh foods Dry and canned foods Combining warehouse INTERNATIONAL CONSIDERATIONS 545 Trade restrictions Shipping regulations Trading partners or(. \\izi\r; nil ; si itlv chain einction 548 Functional organization Specific activities of the logistics manager Computerized network integration Outsourcing — Challenges for the logistics manager Definition of the logistics manager Case study 17.1 Cisco Systems 18. Project management 562 A PROJECT AND PROJECT MANAGEMENT 562 Complex projects with unknown elements Large projects with standard elements Intermediate projects — Small projects — Elements of a project Turnkey project Projects, operations, and the supply chain CONTRACTS IN A I'ROJKCT 566 Types of contract — Fixed price or lump sum contract Guaranteed maximum with an incentive clause Cost plus contract Penalty clause Holdback provision PHASES OF A PROJECT 567 Work packages Proposal stage Design and conception Detailed design Construction Mechanical completion, startup, and handover phase PROJECT ORGANIZATION 568 Project manager Engineers Scheduler Purchasing personnel Controller Construction manager SCHEDULING AND CONTROLLING 569 Gantt charts Project cost curves Percent completion curve Dynamic monitoring tools NETWORK DIAGRAMS 573 Description — Terms in network diagrams Network diagram for a house construction Critical path method Program evaluation and review technique Advantages of network diagrams Limitations of network diagrams Computerized systems ACCK1.KK VI 1\ ; (CRASHING;) A PROJECT 577 Concept Network diagrams and crashing Case study 18.1 Sana 19. Reliability and maintenance 595 RELIAHII.I I V 595 Poor product design Components and reliability in a series system Backup or parallel systems Failure rate Lifetime failure rate — Responsibility and the supply chain Poka yoke 1 AII.TRK MONK, Lll T.CT, AM) CRTTICAI.m ANALYSIS 602 Elements in the FMECA analysis Procedural steps in the FMECA analysis Real world pharmaceutical application MAINTENANCE 605 Poor maintenance Emergency maintenance Preventive maintenance Total productive maintenance Reliability centred maintenance RECOVERY EROM A EAIURK 608 Product redesign Just in time Subcontractor/ supplier network Crisis management Case study 19.1 A ski resort 20. Statistical quality control 616 ELEMENTS OE STATISTICAL Ql'ALITY CONTROL 616 Introduction Lots, series, or batches Quality characteristics Origin of statistical quality control Goal of statistical quality control BASIC CONCKPTS Of STATISTICAL 1'ROCKSS CONTROL 618 Definition of statistical process control Variations in a process The control chart Control chart limits STATISTICAL PROCESS CONTROL IOK VI IRIIH IK CHARAC'I ERISTICS 621 P chart C chart STATISTICAL PROCESS CONTROL FOR VARIABLE CHARACTERISTICS 623 X bar chart and a range chart Sample mean control chart — Sample range control chart CONSIDERATIONS IN STVl'ISTIC.M. PROCESS CON I KOI. 624 No guarantees with SPC Effects of sigma limits Possibilities in the outcome of control charts Online statistical process control process c\i'\bii.i n 627 Product design specifications and the process Process capability ratio Process capability index si\ sk,\i \ 01 \iii 'i 628 Introduction Product performance Process shift Philosophical extension of six sigma quality Six sigma black belt swiim.im; 631 Random sample Central limit theory Sampling techniques \c( i i' i \nci . im.ws 633 Acceptance sampling Rejected lots Criteria for acceptance sampling Acceptance plan Operating characteristic curves Outcomes of an acceptance plan Perfect discriminating operating curve Practical operating characteristic curves Inspection and quality Producer and consumer risk Average outgoing quality Case study 20.1 Candy Co. 21. Waiting lines 655 \V\ITI\C; LINKS IN PRACTICE 655 Retail stores Airline industry Road networks Medical centres Government owned or managed Sports and entertainment facilities Manufacturing Distribution Benefits of waiting lines to the operator Customers' behaviour in waiting lines REASONS FOR WAI I 1N(, LINKS 657 Load and capacity Poor scheduling Badly designed systems System has reached saturation Irregular patterns Unknown service time SERVICE SYSTEMS IN WAITING LINKS 658 Arrivals in the system Variable service systems Fixed service systems Service rate Service time Waiting line in the service system is unlimited Waiting line in the service system is limited Queue discipline Channels Service phases SINCiLK CHANNEL, SINGLE PHASE OCEllING MODKI.S 661 Conditions Utilization of service system Variable service rate Constant service rate S1MII VI ION OK A WAITING; I.INK 662 Defining simulation Parameters in the waiting line Variables in the waiting line — Monte Carlo process Computer packages MANAGING TIIK WAITING I.INK 663 Need to analyze waiting line situations Good management policy Approaches to reduce waiting lines or to minimize their negative impact Case study 21.1 Motorway 22. Theory of constraints 677 CONCEPTS 677 Constraint Bottleneck Drum, buffer, and rope Focusing on constraints — Optimized production technology SYSTEM THROUGHPUT 679 Market demand Random occurrences BOTTLENECKS AND NON BO'I TLKNECKS 679 Use of a non bottleneck is determined by other system constraints — Utilization and full employment of a resource are not synonymous An hour lost on a bottleneck is an hour lost on all the system — An hour saved on a non bottleneck is a mirage Bottlenecks govern both throughput and inventory accumulation TRANSFER BATCH, PROCESS BATCH, AND LOT SIZE 683 Transfer batch Process batch Savings in inventory holding cost Reduction in lead times Lot sizes should be variable and not fixed SCHEDULING AND CONSTRAINTS 685 Lead times should not be considered fixed Production of two products at three work posts Production of three products at three work posts NON MANUFACTURING SYSTEMS 688 Project management New product development Case study 22.1 Compressor units 23. Decision making and risk 697 THE ELEMENT OF RISK 697 Wrong decisions System Trade off Priority recognition MAGNITUDE OF THE DECISION MAKING PROCESS 700 Intuition Quick and dirty Computations Model building Task force TMK DKCISION PROCESS 701 What is the reason for requiring a decision? Define the current and future situation Define objectives Develop alternatives Analyze alternatives Select the best alternative Firm up a plan for implementation Monitor results II IK KNVIROWIKNT FOR DKCISION1 MAKING 703 Decision making under certainty Decision making under risk Decision making under uncertainty DKCISION THEORY 703 Characteristics Stages Decision making under certainty Decision making under uncertainty Decision making under risk Decision trees Expected value of perfect information — What if and sensitivity analysis PAYOFF TABLES 707 Method Analysis MARGINAL ANALYSIS 707 Probability relationship Normal probability distributions and marginal analysis WHEN EXPECTED VALUES ARE NOT THE DECISION MAKING CRITERIA 708 Utility Gambling Managers with different personalities Insurance COST BENEFIT ANALYSIS 711 Governments Case study 23.1 Grivel Foundry 24. Linear programming 732 THE LINEAR PROGRAMMING TOOL 732 Background Applications Methods for linear programming RESTRICTIONS ON LINEAR PROGRAMMING 734 Resource availability Design specifications Legal requirements Quantitative with limitations FORMULATING A LINEAR PROGRAMME 735 Objective Constraints Mathematical function Microsoft Solver LINEAR PROGRAMMING WITH ONLY TWO VARIABLES 736 Feasible area and boundary limits Iso profit line Surplus resources Sensitivity Limits of two variable linear programmes l.INHAR PROGRAMMING WITH MORK THAN TWO VARIABLES 737 Transportation networks Blending or mixing Assignment method Personnel scheduling Case study 24.1 Easthope 25. Financial analysis 753 I'RODICT PRICING 753 Profit motive Product price and the operations manager Market price Catalogue price Price equal to cost plus margin Price based on target cost Exchange rates VARIABI.K COSTS 756 Definition Raw material cost Direct labour cost Factory overhead Value of inventory F1XF.D COSTS 758 Definition Depreciation Calculation of depreciation FINANCIAL TRKATMKNT ()1 FIXKI) ASSKTS 759 Payback method Net present value Internal rate of return TRADITIONAL COST ACCOUNTING 760 Assigning costs Production overhead Under or over absorption of overhead ACTIVITY BASKD COSTING 761 Operating changes Principle of activity based costing Non value added Depreciation charges Customer focus Service industries BRKAKEVKN ANALYSIS 763 Contribution margin Terms and definitions Graphical analysis Assumptions in breakeven analysis SHORT RUN PRODUCTION COSTS 764 Increasing labour Total production output Average production Marginal production Total costs Average and marginal costs Diminishing marginal returns LONG Rl'N PRODUCTION COSTS 768 Long run cost curves Flexibility Economies of scale and its benefits Economies of scale and its disadvantages Diseconomies of scale Constant economy of scale Case study 25.1 Manning 26. Auditing the operations and supply chain 791 !VI KllDI C I l()\ 791 The operations audit Auditor Starting point Analytical tools Audit checklists Cl sTOMK.R S\ I ISTACTION 793 Customer analysis Customer satisfaction index ci si ( \ikk si .in ici: [. l \ i:i. 796 Qualitative measurement of service level Quantitative measurement of service level i\\ k.vioky \i \\\(iiAii:\ i 798 Quantitative measurements of inventory Qualitative evaluation of why inventory is being held Company performance and inventory 1:11 icii.nc'i \\M 01 Mill \ii . \si m '.MKvrs 802 Manufacturing Services WOUKIN'i K.\YIKO\ME\T 805 Management Personnel involvement Documentation Physical environment I in. si iM'i.v c:i¦ \i\ 807 Financial measurements benchmarking 809 Operating level European firms Petroleum industry Guidelines to benchmarking Case study 26.1 Berger Co. Case study 26.2 Cardoso 27. Statistical concepts 827 THE ROI.K OK STATISTICS 827 Areas of use No guarantee Black belt in statistics Microsoft Excel COMMON TERMS 828 Data characteristics Raw data Data array Class Discrete data Continuous data A statistic Descriptive statistics Inferential statistics Population Parameter Sample Random sample Sampling with replacement Sampling from an infinite population Distribution Frequency distribution Pie chart Histogram Bar chart Polygon SIMMATION Rll.KS 830 Mean value Addition of two variables Difference of two variables Constant multiplied by a variable Constant summed n times Summation of a random variable around the mean PROBABli.ll V 831 Subjective probabilities — Relative frequency probability Classical probability rules — Application of probability rules to relative frequency occurrences ckn'1 rai. tk\i)I :\c:v 832 Mean — Median — Mode — Midrange Geometric mean IMSI'KKSION 834 Range Variance Standard deviation Deviations about the mean — Bienayme Chebyshev rule — Fractiles K\TO\K\TI.\I. DIS i'RIHI TION 837 Growth Decline Increase to a maximum Natural logarithm NORMAL DISTRIBITION 839 Definition — Area under the normal distribution Mathematical expression Transformation formula — Normal distribution and risk Real world BINOMIAL DISTRIBl i ION 840 Characteristics Validity Deviations Mathematical expression Dissecting the binomial equation Mean value of the binomial distribution Standard deviation of the binomial distribution Binomial distribution situations Approximating to the normal distribution I'()IW)\ \|)\|s I KMM i l()\ 842 Characteristics Requirements Mathematical expression Poisson distribution as an approximation of the binomial distribution NT! l)i:\ I t IMMklBI I KIN 842 Characteristics Degrees of freedom Using a t distribution BKTA IMSTRIIH TIO\ 843 Definition Network diagrams Appendix 852 TKCIIXOI.OCilC.AI. niNCOVHRIKS, l\\ KNTIONS, AND i)i:\ i.i.oi'\ii;\ i s Glossary 858 Index 884
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spellingShingle	Waller, Derek L. Operations management a supply chain approach Fertigungsplanung - Operations Management - Supply Chain Management Production management Fertigungsplanung (DE-588)4113545-3 gnd Supply Chain Management (DE-588)4684051-5 gnd Operations Management (DE-588)4549167-7 gnd Operations Research (DE-588)4043586-6 gnd
subject_GND	(DE-588)4113545-3 (DE-588)4684051-5 (DE-588)4549167-7 (DE-588)4043586-6 (DE-588)4123623-3
title	Operations management a supply chain approach
title_auth	Operations management a supply chain approach
title_exact_search	Operations management a supply chain approach
title_exact_search_txtP	Operations management a supply chain approach
title_full	Operations management a supply chain approach Derek L. Waller
title_fullStr	Operations management a supply chain approach Derek L. Waller
title_full_unstemmed	Operations management a supply chain approach Derek L. Waller
title_short	Operations management
title_sort	operations management a supply chain approach
title_sub	a supply chain approach
topic	Fertigungsplanung - Operations Management - Supply Chain Management Production management Fertigungsplanung (DE-588)4113545-3 gnd Supply Chain Management (DE-588)4684051-5 gnd Operations Management (DE-588)4549167-7 gnd Operations Research (DE-588)4043586-6 gnd
topic_facet	Fertigungsplanung - Operations Management - Supply Chain Management Production management Fertigungsplanung Supply Chain Management Operations Management Operations Research Lehrbuch
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