Essentials of Operations Management

Front Cover
Half Title Page
Title Page
Copyright Page
Brief Contents
Contents
Guide to ‘Operations in practice’ examples
Preface
To the instructor
To the student
Ten steps to getting a better grade in operations management
About the authors
Acknowledgements
Publisher’s acknowledgements
Operations management and performance
	Introduction
	Key questions
	What is operations management?
		Operations can produce both services and products
		Operations management in not-for-profit organizations
	What is the input–transformation–output process?
		Inputs to the process
	Why is operations management important to an organization’s performance?
		Performance at three levels
	What is the processes hierarchy?
		Operations management is relevant to all parts of the business
		Business processes
	How do operations and processes differ?
		The volume dimension
		The variety dimension
		The variation dimension
		The visibility dimension
		The implications of the four Vs of operations processes
	What do operations managers do?
		The model of operations management
		Summary answers to key questions
		Problems and applications
		Want to know more?
Operations strategy
	Introduction
	Key questions
	What is strategy and what is operations strategy?
		Operations strategy
		Hayes and Wheelwright’s four stages of operations contribution
		Perspectives on operations strategy
	What is the difference between a ‘top-down’ and ‘bottom-up’ view of operations strategy?
		‘Top-down’ strategies
		‘Bottom-up’ strategies
	What is the difference between a market requirements and operations resources view of operations strategy?
		Market requirements-based strategies
		The operations resources perspective
	How can operations strategy form the basis for operations improvement?
		The ‘line of fit’ between market requirements and operations capabilities
	What is the ‘process’ of operations strategy?
		Operation strategy formulation
		Operations strategy implementation
		Operations strategy monitoring
		Operations strategy control
	Summary answers to key questions
	Problems and applications
	Want to know more?
Product and service innovation
	Introduction
	Key questions
	What is product and service innovation?
		Innovation, creativity and design
		Incremental or radical innovation
	What is the strategic role of product and service innovation?
		The process of design
		Design process objectives
	What are the stages of product and service innovation?
		Concept generation
		Concept screening
		Preliminary design
		Reducing design complexity
		Design evaluation and improvement
		Prototyping and final design
	What are the benefits of interactive product and service innovation?
		Simultaneous development
		Early conflict resolution
		Project-based organizational structures
		Summary answers to key questions
		Problems and applications
		Want to know more?
Process design – resources
	Introduction
	Key questions
	Why is choosing the right resources important?
		Process design and product/service design are interrelated
	Do processes match volume–variety requirements?
		The ‘product–process’ matrix
		Process types
		Moving off the natural diagonal
	Are process layouts appropriate?
		Layout should reflect volume and variety
		Layout selection
		Advantages and disadvantages of layout types
		Layout and ‘servicescapes’
	Are process technologies appropriate?
		Process technology should reflect volume and variety
	Are job designs appropriate?
		Job design should reflect volume and variety
		To what degree should jobs be defined?
		How should job commitment be encouraged?
	Summary answers to key questions
	Problems and applications
	Want to know more?
Process design – analysis
	Introduction
	Key questions
	Why is it important to get the details of process design correct?
	What should be the objectives of process design?
		‘Micro’ objectives
		Standardization of processes
		Environmentally sensitive process design
	How are processes currently designed?
		Process mapping
	Are process tasks and capacity configured appropriately?
		Throughput time, cycle time and work in progress
		Workflow
		Process bottlenecks
		Arranging the stages
	Is process variability recognized?
	Summary answers to key questions
	Problems and applications
	Want to know more?
Supply chain management
	Introduction
	Key questions
	What is supply chain management?
		Internal and external supply chains
		Tangible and intangible supply chains
	How do supply chains compete?
		Performance objectives for supply networks
		Lean versus agile supply networks
	How should you manage supply chain relationships?
		Contracting and relationships
		Which type of relationship?
	How should the supply side be managed?
		Sourcing strategy
		Global sourcing
		Supplier selection
		Managing on-going supply
		Improving supplier capabilities
	How should the demand side be managed?
		Logistics services
		Customer relationship management (CRM)
		Customer development
	What are the dynamics of supply chains?
		Controlling supply chain dynamics
	Summary answers to key questions
	Problems and applications
	Want to know more?
Capacity management
	Introduction
	Key questions
	What is capacity management?
		Long-, medium- and short-term capacity management
	What are the main long-term capacity decisions?
		Economies of scale and the ‘optimum’ capacity level
		The timing of capacity change
	What are the main medium-term capacity decisions?
		The objectives of capacity management
		Understanding medium-term demand
		Understanding medium-term capacity
		Both demand and capacity can vary
		Predictable and unpredictable variation
	What are the ways of coping with mismatches between medium-term demand and capacity?
		Level capacity plan
		Chase demand plan
		Demand management plan
		Yield management
	How can operations understand the consequences of their medium-term capacity decisions?
		Considering capacity decisions using cumulative representations
		Considering capacity decisions using queuing principles
		Considering capacity decisions over time
	Summary answers to key questions
	Problems and applications
	Want to know more?
Inventory management
	Introduction
	Key questions
	What is inventory?
		All processes, operations and supply networks have inventories
	Why do you need inventory?
		So why have inventory?
		Reducing physical inventory
		Day-to-day inventory decisions
	How much should you order? (The volume decision)
		The economic order quantity (EOQ) formula
		Gradual replacement – the economic batch quantity (EBQ) model
		Criticisms of EOQ models
	When should you order? (The timing decision)
		Continuous and periodic review
	How can you control inventory?
		Using the ABC system to prioritize inventories
		Measuring inventory
		Inventory information systems
		Common problems with inventory systems
	Summary answers to key questions
	Problems and applications
	Want to know more?
Resource planning and control
	Introduction
	Key questions
	What is resource planning and control?
	What is the difference between planning and control?
		Long-, medium- and short-term resource planning and control
	How do supply and demand affect planning and control?
		Uncertainty in supply and demand
		Dependent and independent demand
		Responding to demand
		P:D ratios
	What are the activities of planning and control?
		Loading
		Sequencing
		Scheduling
		Monitoring and controlling the operation
		Drum, buffer, rope
	What is enterprise resource planning (ERP)?
		How did ERP develop?
	Summary answers to key questions
	Problems and applications
	Want to know more?
Lean operations
	Introduction
	Key questions
	What is lean?
		Three perspectives of lean
		How lean operations consider flow
		How lean operations consider inventory
		How lean operations consider capacity utilization
		How lean operations consider the role of people
		How lean operations consider improvement
	How does lean eliminate waste?
		Causes of waste – muda, mura, muri
		Types of waste
		Looking for waste (and kaizen opportunities) – the ‘gemba walk’
		Eliminating waste through streamlined flow
		Eliminating waste through matching demand and supply exactly
		Eliminating waste through flexible processes
		Eliminating waste through minimizing variability
		Keeping things simple – the 5S method
	How does lean apply throughout the supply network?
	Summary answers to key questions
	Problems and applications
	Want to know more?
Operations improvement
	Introduction
	Key questions
	Why is improvement so important in operations management?
		Radical, or breakthrough, change
		Continuous, or incremental, improvement
		Exploitation or exploration
		The structure of improvement ideas
	Why is failure management also improvement?
		Assessing the potential causes and consequences of failure
		How can failure be prevented?
		How can operations mitigate the effects of failure?
		How can operations recover from the effects of failure?
	What are the key elements of operations improvement?
		Improvement cycles
		A process perspective
		End-to-end processes
		Evidence-based problem solving
		Customer-centricity
		Systems and procedures
		Reduce process variation
		Synchronized flow
		Emphasize education/training
		Perfection is the goal
		Waste identification
		Include everybody
		Develop internal customer–supplier relationships
	What are the broad approaches to improvement?
		Total quality management as an improvement approach
		Lean as an improvement approach
		Business process re-engineering (BPR)
		Six Sigma
		Differences and similarities
	What techniques can be used for improvement?
		Scatter diagrams
		Process maps (flow charts)
		Cause–effect diagrams
		Pareto diagrams
		Why–why analysis
		Benchmarking
	Summary answers to key questions
	Problems and applications
	Want to know more?
Quality management
	Introduction
	Key questions
	What is quality and why is it so important?
		The operation’s view of quality
		Customers’ view of quality
		Reconciling the operation’s and the customer’s views of quality
		How can quality problems be diagnosed?
	What steps lead towards conformance to specification?
		Step 1 – define the quality characteristics
		Step 2 – decide how to measure each characteristic
		Step 3 – set quality standards
		Step 4 – control quality against those standards
		Steps 5 and 6 – find and correct causes of poor quality and continue to make improvements
	What is total quality management (TQM)?
		TQM as an extension of previous practice
		The principles of TQM
		TQM means meeting the needs and expectations of customers
		TQM means covering all parts of the organization
		TQM means including every person in the organization
		TQM means all costs of quality are considered
		TQM means developing the systems and procedures that support quality and improvement
	Summary answers to key questions
	Problems and applications
	Want to know more?
Project management
	Introduction
	Key questions
	What is project management?
		What do projects have in common?
		What is project management exactly?
		Not all projects are the same
		The stages of project management
	What is a project’s ‘environment’?
		The role of stakeholders in projects
		Project definition
	How can projects be planned?
		Identify activities – the work breakdown structure
		Estimate times and resources
		Identify relationships and dependencies
		Identify schedule constraints
		Fix the schedule
		Network analysis
		Program evaluation and review technique (PERT)
	How can projects be controlled?
		Project monitoring
		Assessing project performance
		Intervening to change the project
		Managing matrix tensions
	Summary answers to key questions
	Problems and applications
	Want to know more?
Notes
Index
Back Cover